Dominated Strategy

Definition

A dominated strategy is a choice that results in a worse outcome for a player, regardless of what the other players choose. This concept helps identify less optimal choices in strategic interactions, allowing players to eliminate inferior options when making decisions. Understanding dominated strategies is crucial as it streamlines the decision-making process by focusing on better alternatives and can lead to more efficient outcomes in game scenarios.

5 Must Know Facts For Your Next Test

1. A dominated strategy can lead to suboptimal outcomes in games, as players may persist in using these strategies even when better options are available.
2. In many games, players will eliminate dominated strategies in order to simplify their decision-making and improve their chances of achieving better payoffs.
3. Dominated strategies do not affect the equilibrium of a game; removing them does not change the remaining strategies' best responses.
4. A player can have multiple dominated strategies; identifying and eliminating them can enhance strategic clarity.
5. Recognizing dominated strategies is particularly useful in extensive games where players must consider multiple moves and potential outcomes.

Review Questions

• How does recognizing a dominated strategy help players in making decisions during a game?
  • Recognizing a dominated strategy helps players focus on more effective choices by allowing them to eliminate options that consistently yield worse outcomes. By doing this, players can streamline their decision-making process and concentrate on strategies that could potentially lead to better payoffs. This elimination process ultimately enhances strategic clarity and can lead to more favorable results.
• Discuss the relationship between dominated strategies and Nash Equilibrium in strategic games.
  • In strategic games, dominated strategies can be disregarded without affecting the Nash Equilibrium of the game. When players eliminate these inferior options, they may converge towards strategies that better align with achieving Nash Equilibria. Understanding how dominated strategies operate allows players to focus on more viable strategies that will ultimately contribute to finding stable outcomes where no player has an incentive to deviate unilaterally.
• Evaluate the implications of having multiple dominated strategies for a player's overall strategy in a game.
  • Having multiple dominated strategies complicates a player's overall strategy but also provides opportunities for refinement. By identifying all dominated options, a player can simplify their decision-making process and concentrate on superior alternatives. This evaluation process enhances strategic thinking and enables players to maximize their chances of achieving favorable outcomes while navigating the complexities of competition with other players.

Related terms

Dominant Strategy: A dominant strategy is a choice that yields a better outcome for a player, no matter what the other players decide. It essentially trumps all other strategies.

Nash Equilibrium: A Nash Equilibrium occurs when no player can benefit from unilaterally changing their strategy, given the strategies of all other players remain unchanged.

Strictly Dominated Strategy: A strictly dominated strategy is one where another strategy always provides a better outcome, regardless of what the other players do. This term emphasizes a stronger form of domination than just being dominated.