### Game Theory 101: Iterated Elimination of Strictly Dominated Strategies

Game Theory 101: The Complete Textbook on Amazon: http://www.amazon.com/gp/product/B005L7ANWC/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=B005L7ANWC&linkCode=as2&tag=gamthe101-20The prisoner's dilemma had an obvious solution because each player had one strategy that was always the best regardless of what the other players do. Most games don't have solutions that are that simple, however. What if one player's best strategy depends entirely on which strategy the other player chose?This video covers iterated elimination of strictly dominated strategies. If one strategy is always worse than another for a player, that means the other player should infer that the first player would never choose that poor strategy. But this has interesting implications. It is possible to keep removing strategies from a game based on this information, until you eventually arrive at a single solution. We go over an example in this video.As a general rule, if you ever see a strictly dominated strategy, you should always eliminate it immediately. Although there may be more strictly dominated strategies that you could eliminate first, those other strictly dominated strategies will still be strictly dominated in the reduced game. Therefore, you lose nothing by immediately eliminating a strategy.

Length:
07:11