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If a player does not have a dominant strategy, can the game still have a Nash equilibrium? In the Prisonerâs Dilemma, for example, each prisoner will be better off denying a crime, but both have incentives to confess to it â and together, will double their stays in jail. (Econ wonks would say that the outcome isnât Pareto efficient.) To understand the prisonerÊ¼s dilemma is interesting and also problematic, it is useful to introduce the notion of a Nash equilibrium (named after John Nash). 24 Game Theory, the Nash Equilibrium, and the Prisonerâs Dilemma Douglas E. Hill 85. Repeated Prisonerâs dilemma: In the game known as the Prisonerâs dilemma , the Nash equilibrium is Confess-Confess (defect-defect). Game theory models human interactions. In any case, no, there isn't always a Nash equilibrium. Implications Game Theory provides many insights into the behaviour of oligopolists. Nash Equilibrium for the prisoners dilemma when using mixed strategies. ... (-1,-6) & (-4, -4) \end{array}  which corresponds to the well-known prisonder's dilemma. The solution to the prisoner's dilemma game is a Nash equilibrium because no player can improve his or her payoff by changing strategy unilaterally. The Nash equilibriumâwhat I call the âstable outcomeââof the prisonerâs dilemma is that both players lose, even though it is entirely possible for them both to win if they had strategically cooperated. If player A would switch to lie while player B stays with telling the truth player A would get 10 years in prison, so he won't switch. There are a lot of different ways that humans can interact, so there are a lot of different models. Yes. Generally when you learn the prisoner's dilemma it's to demonstrate what a Nash equilibrium actually is - it's entirely possible to set it up so there isn't a Nash equilibrium at all, or indeed so there are 2. The prisoner's dilemma is not a repeated game. For example, in the Prisonerâs Dilemma game, confessing is a Nash equilibrium because it is the best outcome, taking into account the likely actions of others. The most famous example of Nash equilibrium is the prisoner's dilemma.In the prisoner's dilemma, two criminals are captured and interrogated separately. As weâll see, the Nash equilibrium might not be the best option for the group â or for any individual player. Roughly, a Nash equilibrium is a set of strategies for a given task which is such that, given what every other player is doing, no player would be better off by changing his strategy. https://www.khanacademy.org/.../v/prisoners-dilemma-and-nash-equilibrium Ask Question Asked 7 years, 8 months ago. The prisoner's dilemma has one Nash equilibrium, namely 7,7 which corresponds to both players telling the truth. correct. The same holds for player B. There is no reason that a dominant strategy must exist to have a Nash equilibrium. 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