Explanation of Game Theory & the Nash Equilibrium Point; AP Microeconomics; Economics

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Study Questions:
1) In game theory, which player gets the pay-off at the right of each cell? Which gets the pay-off on the left of each cell?
2) Describe: dominant strategy, Nash Equilibrium. How does one find the Nash Equilibrium point?
3) What kind of market structure does game theory often emulate?
4) Make up your own three-by-three game where there is a dominant strategy for the player at the top, but not one for the player at the left. State what the Nash Equilibrium would be in this game.
5) Make up your own two-by-two game and state where the Nash equilibrium point would be.
6) It is stated that the concepts involved in game theory are relevant to other aspects of life also (for example it is used in tennis). Give an example of where the concepts of game theory are seen in life.


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