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The concept of a mixed-strategy equilibrium was introduced by John von Neumann and Oskar Morgenstern in their 1944 book The Theory of Games and Economic Behavior, but their analysis was restricted to the special case of zero-sum games. They showed that a mixed-strategy Nash equilibrium will exist for any zero-sum game with a finite set of ...
Unlike the pure Nash equilibria, the mixed equilibrium is not an evolutionarily stable strategy (ESS). The mixed Nash equilibrium is also Pareto dominated by the two pure Nash equilibria (since the players will fail to coordinate with non-zero probability), a quandary that led Robert Aumann to propose the refinement of a correlated equilibrium.
While Nash proved that every finite game has a Nash equilibrium, not all have pure strategy Nash equilibria. For an example of a game that does not have a Nash equilibrium in pure strategies, see Matching pennies. However, many games do have pure strategy Nash equilibria (e.g. the Coordination game, the Prisoner's dilemma, the Stag hunt ...
That is, if at any time period all the players play a Nash equilibrium, then they will do so for all subsequent rounds. (Fudenberg and Levine 1998, Proposition 2.1) In addition, if fictitious play converges to any distribution, those probabilities correspond to a Nash equilibrium of the underlying game.
In game theory, a symmetric equilibrium is an equilibrium where all players use the same strategy (possibly mixed) in the equilibrium. In the Prisoner's Dilemma game pictured to the right, the only Nash equilibrium is (D, D). Since both players use the same strategy, the equilibrium is symmetric. Symmetric equilibria have important properties.
Nash (1951) shows that every finite symmetric game has a symmetric mixed strategy Nash equilibrium. Cheng et al. (2004) show that every two-strategy symmetric game has a (not necessarily symmetric) pure strategy Nash equilibrium. Emmons et al. (2022) show that in every common-payoff game (a.k.a. team game) (that is, every game in which all ...
The mixed strategy Nash equilibrium is inefficient: the players will miscoordinate with probability 13/25, leaving each player with an expected return of 6/5 (less than the payoff of 2 from each's less favored pure strategy equilibrium). It remains unclear how expectations would form that would result in a particular equilibrium being played out.
In game theory, the purification theorem was contributed by Nobel laureate John Harsanyi in 1973. [1] The theorem justifies a puzzling aspect of mixed strategy Nash equilibria: each player is wholly indifferent between each of the actions he puts non-zero weight on, yet he mixes them so as to make every other player also indifferent.