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(10) Game Theory: Inside Oligopoly
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Terms in this set (12)
simultaneous-move game
Game in which each player makes decisions without knowledge of the other players' decisions
sequential-move game
Game in which one player makes a move after observing the other player's move
strategy
In game theory, a decision rule that describes the actions a player will take at each decision point
normal-form game
A representation of a game indicating the players, their possible strategies, and the payoffs resulting from alternative strategies
dominant strategy
A strategy that results in the highest payoff to a player regardless of the opponent's action
secure strategy
A strategy that guarantees the highest payoff given the worst possible scenario
Nash equilibrium
A condition describing a set of strategies in which no player can improve her payoff by unilaterally changing her own strategy, given the other players' strategies
mixed (randomized) strategy
A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his or her action
infinitely repeated game
A game that is played over and over again forever and in which players receive payoffs during each play of the game
trigger strategy
A strategy that is contingent on the past play of a game and in which some particular past action "triggers" a different action by a player
extensive-form game
A representation of a game that summarizes the players, the information available to them at each stage, the strategies available to them, the sequence of moves, and the payoffs resulting from alternative strategies
subgame perfect equilibrium
A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve his own payoff at any stage of the game by changing strategies
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