Game theory 101

game theory made easy

game theory made easy

Calculating Payoffs in Mixed Strategy Nash Equilibria

To calculate payoffs in mixed strategy Nash equilibria, do the following:

- Solve for the mixed strategy Nash equilibrium. Write the probabilities of playing each strategy next to those strategies.
- 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.
- Choose which player whose payoff you want to calculate. Multiply each probability in each cell by his or her payoff in that cell.
- 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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