What You Need to Know

Key Concept Diagram

A game has players, strategies, and payoffs

In a zero-sum game, one player's gain equals the other's loss

A Nash equilibrium is a strategy combination where no player can improve by changing strategy alone

The prisoner's dilemma shows how individual rational choices can lead to collectively poor outcomes

Dominant strategies are choices that are best regardless of the opponent's action

Key Vocabulary

Nash equilibrium

A set of strategies where no player benefits from unilaterally changing their choice

Zero-sum game

A game where the total payoff is constant — one player's gain is another's loss

Prisoner's dilemma

A classic game theory scenario showing conflict between individual and group rationality

Dominant strategy

A strategy that gives the best outcome for a player regardless of the other player's choice

Knowledge Check

Select the correct answer for each question. Click "Check Answer" to see if you are right.

Question 1

In a zero-sum game between two players, if player A gains 5 points, player B:

Loses 5 points Gains 10 points Also gains 5 points Gains 0 points

Question 2

A Nash equilibrium is:

The strategy that maximises total payoffs A point where no player can improve by changing strategy alone The strategy where all players cooperate The worst outcome for all players

Question 3

In the prisoner's dilemma, both prisoners confessing is:

The socially optimal outcome Not an equilibrium A Nash equilibrium The cooperative outcome

Introduction to Game Theory