Thus, to find Nash equilibria in Γ
N
=[N, {null(S
i
)}, {u
i
}], we use the conditions: for
each player i,
(1) he is indi?erent among all strategies in S
+
i
, and
(2) any strategy in S
+
i
is at least as good as any strategy in S
0
i
.
Example 3.7. (Meeting in an Airport). Mr.Wang and Ms.Yang are to meet in an
airport.However,theydonotknowwhethertheyaretomeetatdoorAordoorB.The
payo?s are specified in the following normal form game:
Ms. Yang
A (σ
y
) B (1?σ
y
)
Mr. Wang: A (σ
w
) 20, 20 0, 0
B (1?σ
w
) 0, 0 10, 10
Find the Nash equilibria.
Proposition 3.2. If a strategy profile (s
?
i
,σ
?
?i
) is a NE in game [N, {S
i
,null(S
?i
)}, {u
i
}],
it must be a NE in [N, {?(S
i
),null(S
?i
)}, {u
i
}].
Hence, if a pure strategy is a NE strategy from the pure-strategy set, it must be a NE
strategy from the mixed-strategy set.
Example 3.8. Given the following normal-form game,
P2
L
2
(σ
12
) R
2
(σ
22
)
P1: L
1
(σ
11
) 2, 3 -2, 2
R
1
(σ
21
) -2, 3 4, 5
find the Nash equilibria.
Proposition 3.3. (Existence). If S
i
,i=1,...,n, are finite sets, there exists a NE in
Γ
N
=[N, {null(S
i
)}, {u
i
}].
3—5
Proposition 3.4. (Existence). A NE exists in Γ
N
=[N, {S
i
}, {u
i
}] if, for all i =
1,...,n,
(a) S
i
is nonempty, convex, and compact subset of some Euclidean space R
m
.
(b) u
i
(s
1
,...,s
n
) is continuous in (s
1
,...,s
n
) andquasiconcaveineachs
i
.
2.2. Dominant-Strategy Equilibrium
Definition 3.8. Astrategys
i
∈S
i
for player i is strictly dominated in game Γ
N
=
[N,{S
i
},{u
i
}] if there exists another strategy s
0
i
∈ S
i
such that u
i
(s
0
i
,s
?i
) >u
i
(s
i
,s
?i
)
for all s
?i
∈S
?i
. In this case, we say that strategy s
0
i
strictly dominates strategy s
i
. A
strategy s
i
is a strictly dominant strategy for player i in game Γ
N
=[N,{S
i
},{u
i
}] if
it strictly dominates every other strategy in S
i
. Astrategys
i
∈S
i
for player i is weakly
dominated if there exists another strategy s
0
i
∈S
i
such that u
i
(s
0
i
,s
?i
) ≥ u
i
(s
i
,s
?i
) for
all s
?i
∈S
?i
and with strict inequality for some s
?i
.
Definition 3.9. Astrategyσ
i
∈null(S
i
) for player i is strictly dominated in game
Γ
N
=[N,{null(S
i
)},{u
i
}] if there exists another strategy σ
0
i
∈null(S
i
) such that
u
i
(σ
0
i
,σ
?i
) >u
i
(σ
i
,σ
?i
) for all σ
?i
∈
T
j6=i
null(S
j
). In this case, we say that strategy
σ
0
i
strictly dominates strategy σ
i
. Astrategyσ
i
is a strictly dominant strategy for
player i in game Γ
N
=[N,{null(S
i
)},{u
i
}] if it strictly dominates every other strategy in
null(S
i
). Weak dominance is similarly defined.
Proposition 3.5. Player i’s strategy σ
0
i
∈null(S
i
) strictly dominates σ
i
in Γ
N
=
[N,{null(S
i
)},{u
i
}] i? u
i
(σ
0
i
,s
?i
) >u
i
(σ
i
,s
?i
) for all s
?i
∈S
?i
.
Thus, to determine dominance of σ
0
i
over σ
i
, we need only compare them against the
pure strategies of player i’s opponents.
Proposition 3.6. For player i, if a pure strategy ˉs
i
is strictly dominated by a mixed
strategy that assigns zero probability to ˉs
i
, then every mixed strategy that assigns a
positive probability to ˉs
i
is strictly dominated by a mixed strategy that assigns zero
probability to ˉs
i
.
Thus, when trying to find Nash equilibria, we can iteratively eliminate strictly domi-
nated strategies. The order of elimination doesn’t matter.
3—6
Example 3.9. Find all the pure-strategy Nash equilibria in the following game:
P2
L
2
M
2
R
2
P1: L
1
2, 3 -2, 2 5, 2
M
1
-2, 3 4, 5 2, 3
R
1
1, 4 -3, -1 8, 1
3—7