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A Pure Strategy

A pure strategy is the one that will lead to the best payoff or maximum profit. It is considered the best strategy that every player of the game should take. Suppose we have two organizations that are selling the same product. If both of them increase the price of the product, they would reap more profits. On the other hand, if only one of the organizations hikes the price of the product, it will run into losses. In this example, increasing the price is regarded as a pure strategy for both organizations.

Mixed Strategy

In a mixed strategy, the agents of the game adopt different strategies to earn the best possible return. A mixed strategy is often used in cricket where the bowler hurls the ball differently to puzzle the batsman. If the batsman is aware of the type of ball thrown by the hurler, he will make more runs. If both the bowler and the batsman use a pure strategy, either one of them may lose. It is for this reason that it will be in the best interest of the players to adopt mixed strategies

The Prisoner’s dilemma

The Prisoner’s dilemma is a contradictory concept that is used to analyze decisions. In this paradox, we have two players that only care about their self-interest but do not produce optimal results. Each of the players strives to make decisions that protect them at the expense of the other player. As a result, the two players are caught up in a worse condition than if they had collaborated and worked together in the process of decision making.

 Trees and Matrices

Trees and matrices are the two extensively used methods of game visualization. While both of these techniques are effective and often provide some insight, it is the type of game and the set rules that determine the appropriate model. The payoff matrix is the most common and basic technique used in game theory. This tool is usually used to analyze 2-player simultaneous games. A Tree on the other hand is a graph that has edges and nodes.

Frequently Asked Questions
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