Game theory 101
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Calculating Payoffs in Mixed Strategy Nash Equilibria

This lesson shows how to calculate payoffs for mixed strategy Nash equilibria.

Takeaway points:

To calculate payoffs in mixed strategy Nash equilibria, do the following:
1. Solve for the mixed strategy Nash equilibrium. Write the probabilities of playing each strategy next to those strategies.
2. For each cell, multiply the probability player 1 plays his corresponding strategy by the probability player 2 plays her corresponding strategy. Write this in the cell.
3. Choose which player whose payoff you want to calculate. Multiply each probability in each cell by his or her payoff in that cell.
4. Sum these numbers together. This is the expected payoff in the mixed strategy Nash equilibrium for that player.

Next lesson: Mixed Strategies and Strict Dominance.
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