Game Theory Payoff Matrix – AP Microeconomics

Key Concepts

Game Theory models strategic interaction where one's payoff depends on the choices of others. Core to Oligopoly markets.

Definitions

Dominant Strategy: A strategy that yields a higher payoff regardless of what the other player does.

Best Response: The optimal choice given a specific choice by the opponent.

Nash Equilibrium: A state where no player can benefit by changing strategies while the other keeps theirs unchanged.

Tags

Game TheoryOligopolyNash EquilibriumDominant Strategy

FIRM A

FIRM B

	Strategy 1	Strategy 2
Strategy 1	0,0	0,0
Strategy 2	0,0	0,0

Game Scenario

Analysis Engine

Logical Deduction

Firm A dominates...?

Firm B dominates...?

Nash Equilibrium: ?