Question

1. In a dominant strategy equilibrium a player uses a strategy that maximizes his utility no matter what strategies other players use.  True or false?
2. In a nash equilibrium a player uses the strategy that maximizes his utility no matter what strategies other players uses. True or false?
3. Consider a game where there is a dominant strategy equilibrium. You would then argue that, in equilibrium

a-Each player gets the highest utility he can possibly get

b-Total surplus is not necessarily maximized

c-Total surplus is systematically maximized

Answer 1

Part i . This statement is true because a  dominant strategy equilibrium is reached when each player chooses their own dominant strategy that always provides greater utility to the player, no matter what the other player's strategy is

Part ii. This statement is false because Nash equilibrium is a concept within game theory where the optimal outcome of a game is where there is no incentive to deviate from their initial strategy. ... Overall, an individual can receive no incremental benefit from changing actions, assuming other players remain constant in their strategies.

Part III. I would argue in total surplus is systematically maximized because it is not measured systematically.