Concepts- Pure & Mixed NE Flashcards
(5 cards)
1
Q
Convention
A
Social/cultural clue that aids in determination of Nash equilibria
E.g. Framing of Chicken Game - 1. Australian Road (drive on the left) therefore, will turn right 2. American Road (drive on the right) therefore, will turn left
2
Q
Payoff Dominance
A
Focal point determined by the payoff structure
3
Q
Risk Dominant NE
A
The NE that is more likely to be chosen as it minimises potential loss/avoids risk, making it the safer option/equilibrium
- e.g. Stag Hunt Game
4
Q
Self Fulfilling Prophecy
A
Occurs when players beliefs about others strategies influence them to choose strategies that confirm and reinforce those very beliefs, thereby maintaining the equilibrium
5
Q
Salience
A
a visual focal point or aka salience- e.g. Meeting Game
