Dominant strategy

In some games, a player can choose a strategy that "dominates" all other strategies in his strategy set: Regardless of what he expects his opponents to do, this strategy always yields a better payoff than any other of his strategies. An example of a game where each player has a dominant strategy is a second-price auction with independent valuations of the bidders: Here bidding one's true valuation is always a best response, regardless of one's opponents' bids.

Strictly dominated strategy: A strategy is strictly dominated, if there is a second strategy, such that the second strategy yields a strictly higher payoff than the first one, for every possible combination of strategies of the opponents. Rational Game Theory expects that strictly dominated strategies are never played. If for every player one strategy strictly dominates all other strategies of this player, game theorists expect the combination of these strictly dominant strategies to be the outcome of the game. Unfortunately, typically there are no strictly dominant strategies. Hence weaker equilibrium concepts have to be used to predict play in such games.

Entry by: Karsten Fieseler

December 1, 1997
Direct questions and comments to: Glossary master