04.

Mixed Strategy Nash Equilibrium

Ryan Fang1
1 ryf1@psu.edu

Decision Making and Strategy in Economics

Econ 402 (Spring 2015)

Reading

Osborne: Chapter 4

1 Mixed Strategies

2 Mixed Strategy Nash Equilibrium

3 Best Responses

4 Dominance

5 Finding All Mixed Strategy Nash Equilibria

Matching Pennies Revisited

Matching pennies:

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

No pure strategy Nash equilibria.

But how would you play the game?

A Different Interpretation

Think about a penalty kick in a soccer game.

Player 1 is the goalie and has to choose the direction to

attempt the save, left or right.

Player 2 is the shooter and has to choose the direction to

kick the ball, left or right.

How should the shooter and the goalie play the game?

Mixed Strategies

Players can randomize their choice of actions.

A mixed strategy of a player specifies the probabilities with

which she is going to choose each of her actions.

Formally, a mixed strategy, i , of player i is a probability

distribution over her set of actions Ai .

We write i Ai , where Ai denotes the set of all

probability distributions over Ai .

For every a Ai , i (a) is the probability with which a is

played.

Probability Distributions

Given a finite set = {1 , 2 , . . . , N }, a probability

distribution over is simply a n-vector, i.e., a ordered list of

n numbers, (p1 , p2 , . . . , pN ) such that 0 pn 1 for all
P
n = 1, 2, . . . , N, and N
n=1 pn = 1.
is the set of all such n-vectors.

Example

In the Matching Pennies, player i s set of actions are H and

T.
A mixed strategy of player i , i , can specify that i chooses H

with probability
Thus, i (H) =

1
2
1
2

and T with probability 12 .

and i (T ) = 21 .

Example

Another mixed strategy of player i , i0 , can be defined as:

i0 (H) =

1
3

and i0 (T ) = 32 .

and i0 = 31 , 23 ,
where the order of the probabilities are understood.

Alternatively, we can write i =

1 1
2, 2

Moreover, player i can also assign probability 1 to action H.

(1, 0) is also a probability distribution over Ai .

In this case, we say that i plays a pure strategy H. Thus, a

pure strategy is just a special mixed strategy.

Example

As before, we can define a mixed strategy profile as a list of

mixed strategies chosen by the players.

For example, we can have: (1 , 2 ) =

1 1
2, 2

 

1
2

1 2
3, 3



Thus, player 1 plays H and T with probability while player

2 plays H with probability 31 and T with probability 23 .

Expected Payoff

Recall that, as part of a game, we have to specify the

players preferences over all possible action profiles.

So, how do we define the players preferences over mixed

strategy profiles?
We can define players preferences over lotteries.
A (mixed) strategy profile induces a lottery over the action

profiles.

Expected Payoff



1 1
2, 2

 



, 13 , 32 , and if they
randomize over their actions independently (which is always
assumed to be the case in our course), then:

If the players play (1 , 2 ) =

with
with
with
with

probability
probability
probability
probability

1
2
1
2
1
2
1
2

1
3
2
3
1
3
2
3

they
they
they
they

will
will
will
will

end
end
end
end

up
up
up
up

playing
playing
playing
playing

(H, H);
(H, T );
(T , H); and,
(T , T ).

Expected Payoff



1 1
2, 2

 



, 13 , 23
induces a lottery, which offers (the outcome induced by)
(H, H) with probability 16 , (H, T ) with probability 31 , (T , H)
with probability 61 , and (T , T ) with probability 13 .

Thus, the strategy profile (1 , 2 ) =

A famous theorem by mathematician John Von Neumann

and economist Oskar Morgenstern allows us to represent

players preferences over lotteries by their expected payoffs.
That is, we take the (Bernoulli) payoffs to player i in the

events (H, H), (H, T ), etc., and calculate the expected value
of these payoffs based on the probabilities that these events
will occur.

Example

If the players (Bernoulli) payoffs are given as in the following

table:

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

Then, if the players choose (1 , 2 ) =



1 1
2, 2

player 1s expected payoff is going to be

1 61 + (1) 31 + (1) 61 + 1 13 = 0.
Similarly, player 2s expected payoff is

(1)

1
6

+1

1
3

+1

1
6

+ (1)

1
3

= 0.

 

1 2
3, 3



Example

BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2


If the players choose (1 , 2 ) =

expected payoff is going to be 2

 



1 1
1 2
,
2, 2 , 3, 3
1
1
2
6 + 1 3 = 3.

On the other hand, player 2s expected payoff is

1
6

+2

1
3

= 65 .

player 1s

Expected Payoff

In general, given 1 A1 and 2 A2 , where both A1

and A2 are finite, player i s expected payoff is:

Ui (1 , 2 ) =

a1 A1 a2 A2

1 (a1 ) 2 (a2 ) ui (a1 , a2 )

1 Mixed Strategies

2 Mixed Strategy Nash Equilibrium

3 Best Responses

4 Dominance

5 Finding All Mixed Strategy Nash Equilibria

Expected Payoff Maximization

We say that a players preference over lotteries is represented

by her expected payoffs if she prefers one lottery to another

if and only if her expected payoff from the first lottery is
higher than that from the second lottery.
Recall that we always assume that the players are rational,

which means they always choose the best option available to

them. Thus, when choosing between lotteries (or mixed
strategies), they always choose those that maximize their
expected payoffs.

Mixed Strategy Nash Equilibrium

As before, we can think of Nash equilibrium in mixed

strategies as a (stochastic) steady state, where no player has

any incentive to deviate.
Formally, a strategy profile is a Nash equilibrium in mixed

strategies (or mixed strategy Nash equilibrium) if and only if,

for each player i , we have:

Ui i , i
Ui i , i

for all i Ai

Again, i can be a pure strategy for every i . In which case,

is called a pure strategy Nash equilibrium. Thus, a PSNE

is just a special MSNE.

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1

 
1 1
2, 2

1 2
3, 3



a mixed strategy Nash

equilibrium?
No. Why?
Because by deviating to (0, 1), player 1 can strictly increase

her expected payoff.


1
Check: U1
,

 2

U1 (0, 1) ,

1 2
3, 3

 

1
2 ,

1 2
3, 3



= 0, and

= (1)

1
3

+1

2
3

= 13 .

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1

 
1 1
2, 2

1 2
3, 3



a mixed strategy Nash

equilibrium?
No. Why?
Because by deviating to (0, 1), player 1 can strictly increase

her expected payoff.


1
Check: U1
,

 2

U1 (0, 1) ,

1 2
3, 3

 

1
2 ,

1 2
3, 3



= 0, and

= (1)

1
3

+1

2
3

= 13 .

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1

 
1 1
2, 2

1 2
3, 3



a mixed strategy Nash

equilibrium?
No. Why?
Because by deviating to (0, 1), player 1 can strictly increase

her expected payoff.


1
Check: U1
,

 2

U1 (0, 1) ,

1 2
3, 3

 

1
2 ,

1 2
3, 3



= 0, and

= (1)

1
3

+1

2
3

= 13 .

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1

 
1 1
2, 2

1 2
3, 3



a mixed strategy Nash

equilibrium?
No. Why?
Because by deviating to (0, 1), player 1 can strictly increase

her expected payoff.


1
Check: U1
,

 2

U1 (0, 1) ,

1 2
3, 3

 

1
2 ,

1 2
3, 3



= 0, and

= (1)

1
3

+1

2
3

= 13 .

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1
 

1 1
2, 2

1 1
2, 2



a mixed strategy Nash

equilibrium?
Yes. Why?
Because, given that her opponent plays

1 1
2, 2

, a players
payoff is always 0 no matter what mixed strategy she
chooses.

Later on, we will show that this is in fact the unique mixed

strategy Nash equilibrium.

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1
 

1 1
2, 2

1 1
2, 2



a mixed strategy Nash

equilibrium?
Yes. Why?
Because, given that her opponent plays

1 1
2, 2

, a players
payoff is always 0 no matter what mixed strategy she
chooses.

Later on, we will show that this is in fact the unique mixed

strategy Nash equilibrium.

Example
Lets return to Matching Pennies:

Head
Tail

Is (1 , 2 ) =

Head Tail
1,-1 -1,1
-1,1 1,-1
 

1 1
2, 2

1 1
2, 2



a mixed strategy Nash

equilibrium?
Yes. Why?
Because, given that her opponent plays

1 1
2, 2

, a players
payoff is always 0 no matter what mixed strategy she
chooses.

Later on, we will show that this is in fact the unique mixed

strategy Nash equilibrium.

Existence of NE

Recall that we established previously that there are no pure

strategy Nash equilibria of the Matching Pennies game.

Now, by allowing the players play randomized strategies, we

have existence of Nash equilibria.

In fact, Nash proved that so long as the players action sets

are finite, there always is at least one Nash equilibrium in

mixed strategies.

More Examples

The Prisoners Dilemma:

Quiet Fink
Quiet
2,2
0,3
Fink
3,0
1,1
The unique Nash equilibrium in mixed strategies is where

both players choose F with probability 1.

In particular, there are no Nash equilibria in which the players

strictly mix (i.e., play every action with strictly positive

probabilities).

More Examples

The Coordination Game:

Up Down

Up
2,2
0,0
Down 0,0
1,1
A mixed
Nash equilibrium is where both players play

 strategy

i =

1 2
3, 3

In this equilibrium, both players expected payoffs are equal

to 23 .
Recall that (U, U) and (D, D) are also Nash equilibria. In

these equilibria, both players expected payoffs are 2 and 1,

which are strictly higher.

More Examples

BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2


A mixed
 strategy Nash equilibrium

 is where player 1 plays
2 1
3, 3

and player 2 plays

1 2
3, 3

. In equilibrium, both

players expected payoffs are equal to 23 .

1 Mixed Strategies

2 Mixed Strategy Nash Equilibrium

3 Best Responses

4 Dominance

5 Finding All Mixed Strategy Nash Equilibria

Expected Payoff

Suppose that player 1 plays the mixed strategy (p, 1 p) and

player 2 plays the mixed strategy (q, 1 q).

C (prob. q) D (prob. 1-q)

A (prob. p)
a,b
c,d
B (prob. 1-p)
e,f
g,h

Expected Payoff

We can calculate the probability for each of the four possible

action profiles to be played.

C (prob. q)

A (prob. p)
a,b (pq)
B (prob. 1-p) e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

U1 ((p, 1 p) , (q, 1 q)) =

a (pq) + c [p (1 q)] + e [(1 p) q] + g [(1 p) (1 q)]

U2 ((p, 1 p) , (q, 1 q)) =

b (pq) + d [p (1 q)] + f [(1 p) q] + h [(1 p) (1 q)]

Example

Suppose that player 1 plays the mixed strategy (p, 1 p) and

player 2 plays the mixed strategy (q, 1 q).

C (prob. 31 ) D (prob. 32 )
A (prob. 1 )
2,2
0,3
2
1
B (prob. 2 )
3,0
1,1

Example

We can calculate the probability for each of the four possible

action profiles to be played.

C (prob. 13 )

A (prob.
B (prob.

1
4)
3
4)

2,2
3,0

D (prob.


1
1
3 = 12
3
1
1
4 3 = 4

4

0,3
1,1

4
3
4

2
3
2
3

2
3) 
= 16

= 12

Example

C (prob.

A (prob.
B (prob.

1
4)
3
4)

2,2
3,0

1
3)

D (prob.


1
1
3 = 12
3
1
1
4 3 = 4

4

0,3
1,1

1
U1 = 2 12
+ 0 16 + 3 14 + 1 12
1
U2 = 2 12
+ 3 16 + 0 14 + 1 12

4
3
4

2
3
2
3

2
3) 
= 16

= 12

Mixed Strategy Nash Equilibrium

As before, we can define Nash equilibrium in mixed strategies

using best responses.

Formally, a strategy profile is a Nash equilibrium in mixed

strategies (or mixed strategy Nash equilibrium) if and only if

for every i .
i is a best response to i

Matching Pennies Revisited

Head

Head
Tail

 
1
3

Tail

1,-1
-1,1

Is (1 , 2 ) =



 
2
3

-1,1
1,-1
1 1
2, 2

 

1 2
3, 3



a mixed strategy Nash

equilibrium?
No. Because by deviating to (0, 1), player 1 can
 strictly


increase her expected payoff from 0 to 13 . So,

best response to

1 2
3, 3

1 1
2, 2

is not a

Matching Pennies Revisited

Head

 
1
3

Tail

 
2
3

Head (p)
1,-1
-1,1
Tail (1 p)
-1,1
1,-1
In fact, let p be the probability that player 1 chooses H. Her
expected payoff given her opponents mixed strategy is:
1
2
1
2
p + (1)
p + (1)
(1 p) + 1
(1 p)
3
3
3
3
1 2
p
3 3


1
=

which is strictly decreasing in p! Thus, her payoff is

maximized by setting p = 0. In other words, her unique best
response is to play T with probability 1.

Matching Pennies Revisited

Head
Tail

Head
1,-1
-1,1

Is (1 , 2 ) =



Tail
-1,1
1,-1
1 1
2, 2

 

1 1
2, 2



a mixed strategy Nash

equilibrium?
Yes. Because, given that her opponent plays

1 1
2, 2

,a
players payoff is always 0 no matter what mixed strategy she
chooses.



In other words, given that her opponent plays

mixed strategy of a player is a best response.

1 1
2, 2

, any

Best Responses

It turns out that it is always the case that a players best

response to her opponents strategies is either a single pure

strategy or a continuum of mixed strategies.
To see why, lets go back to the expected payoff calculations.

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

U1 ((p, 1 p) , (q, 1 q)) =

a (pq) + c [p (1 q)] + e [(1 p) q] + g [(1 p) (1 q)]

U2 ((p, 1 p) , (q, 1 q)) =

b (pq) + d [p (1 q)] + f [(1 p) q] + h [(1 p) (1 q)]

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

U1 ((p, 1 p) , (q, 1 q)) =

a (pq) + c [p (1 q)] + e [(1 p) q] + g [(1 p) (1 q)]

We can rewrite this as: U1 ((p, 1 p) , (q, 1 q)) =

p [a (q) + c (1 q)] + (1 p) [eq + g(1 q)]

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

We can rewrite this as: U1 ((p, 1 p) , (q, 1 q)) =

p [a (q) + c (1 q)] + (1 p) [eq + g(1 q)]

But [a (q) + c (1 q)] is simply player 1s expected payoff if

she chooses the pure strategy A given player 2s mixed

strategy (q, 1 q).
Similarly [eq + g(1 q)] is her expected payoff if she

chooses the pure strategy B.

Expected Payoff

Thus, writing U1 (A, (q, 1 q)) = a (q) + c (1 q) and

U1 (B, (q, 1 q)) = eq + g(1 q), we have:

U1 ((p, 1 p) , (q, 1 q))
= pU1 (A, (q, 1 q)) + (1 p) U1 (B, (q, 1 q))
In other words, player 1s expected payoff from playing

(p, 1 p) is simply a weighted average of her expected

payoffs from playing pure strategies A and B.

Expected Payoff

U1 ((p, 1 p) , (q, 1 q))

= pU1 (A, (q, 1 q)) + (1 p) U1 (B, (q, 1 q))
How do you maximize a weighted average?
By putting more weight on values that are higher you can

increase a weighted average.

So, if there is a value that is higher than all the other ones,

you should put all the weights on that value.

Expected Payoff

U1 ((p, 1 p) , (q, 1 q))

= pU1 (A, (q, 1 q)) + (1 p) U1 (B, (q, 1 q))
How do you maximize a weighted average?
By putting more weight on values that are higher you can

increase a weighted average.

So, if there is a value that is higher than all the other ones,

you should put all the weights on that value.

Best Responses

U1 ((p, 1 p) , (q, 1 q))

= pU1 (A, (q, 1 q)) + (1 p) U1 (B, (q, 1 q))
Thus, when U1 (A, (q, 1 q)) > U1 (B, (q, 1 q)),

U1 ((p, 1 p) , (q, 1 q)) is maximized by setting p = 1.

That is, player 1s unique best response is the pure strategy
A.
Similarly, when U1 (A, (q, 1 q)) < U1 (B, (q, 1 q)), player

1s unique best response is the pure strategy B.

Best Responses

U1 ((p, 1 p) , (q, 1 q))

= pU1 (A, (q, 1 q)) + (1 p) U1 (B, (q, 1 q))
However, when U1 (A, (q, 1 q)) = U1 (B, (q, 1 q)),

U1 ((p, 1 p) , (q, 1 q)) = U1 (A, (q, 1 q)) regardless of

the value of p. Therefore, any mixed strategy is a best
response!
The same logic applies to player 2.

Matching Pennies Revisited

Lets return to the matching pennies game.

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

Suppose that player 2 plays the mixed strategy (q, 1 q).

What is U1 (H, (q, 1 q)) and U1 (T , (q, 1 q))?

U1 (H, (q, 1 q)) = 1 q + (1) (1 q) = 2q 1
U1 (T , (q, 1 q)) = (1) q + 1 (1 q) = 1 2q

Matching Pennies Revisited

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

U1 (H, (q, 1 q)) = 1 q + (1) (1 q) = 2q 1

U1 (T , (q, 1 q)) = (1) q + 1 (1 q) = 1 2q
Thus, when q < 12 , we have

U1 (H, (q, 1 q)) < U1 (T , (q, 1 q)) and player 1s unique

best response is the pure strategy T .

Matching Pennies Revisited

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

U1 (H, (q, 1 q)) = 1 q + (1) (1 q) = 2q 1

U1 (T , (q, 1 q)) = (1) q + 1 (1 q) = 1 2q
When q > 12 , we have U1 (H, (q, 1 q)) > U1 (T , (q, 1 q))

and player 1s unique best response is the pure strategy H.

Matching Pennies Revisited

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

U1 (H, (q, 1 q)) = 1 q + (1) (1 q) = 2q 1

U1 (T , (q, 1 q)) = (1) q + 1 (1 q) = 1 2q
Finally, when q = 12 , we have

U1 (H, (q, 1 q)) = U1 (T , (q, 1 q)) and any mixed

strategy of player 1s is a best response.

Matching Pennies Revisited

We can summarize this information in a graph: see

blackboard.
(The graph is on P.112 of Osborne)

Matching Pennies Revisited

We can determine player 2s best responses in a similar

fashion.

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

Suppose that player 1 plays the mixed strategy (p, 1 p).

What is U2 ((p, 1 p) , H) and U2 ((p, 1 p) , T )?

U2 ((p, 1 p) , H) = (1) p + 1 (1 p) = 1 2p
U2 ((p, 1 p) , T ) = 1 p + (1) (1 p) = 2p 1

Matching Pennies Revisited

Head
Tail

Head
1,-1
-1,1

Tail
-1,1
1,-1

U2 ((p, 1 p) , H) = (1) p + 1 (1 p) = 1 2p
U2 ((p, 1 p) , T ) = 1 p + (1) (1 p) = 2p 1
Thus, player 2s best response is H if p < 12 , T if p > 21 , and

any mixed strategy if p = 12 .

Matching Pennies Revisited

We can draw the same graph for player 2s best response

function.
By graphing the best response functions of the two players,

we
 canfind
 theunique point where they intersect,
1 1
1 1
.
2, 2 , 2, 2
This is our Nash equilibrium.

BoS
BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2

Again, suppose that player 2 now plays (q, 1 q). What is

player 1s best response?

U1 (B, (q, 1 q)) = 2q, U1 (S, (q, 1 q)) = 1 q
When q < 31 , U1 (B, (q, 1 q)) < U1 (S, (q, 1 q)),

BR1 = S
When q > 13 , U1 (B, (q, 1 q)) > U1 (S, (q, 1 q)),

BR1 = B
When q = 13 , any mixed strategy is a best response.

BoS
BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2

Again, suppose that player 2 now plays (q, 1 q). What is

player 1s best response?

U1 (B, (q, 1 q)) = 2q, U1 (S, (q, 1 q)) = 1 q
When q < 31 , U1 (B, (q, 1 q)) < U1 (S, (q, 1 q)),

BR1 = S
When q > 13 , U1 (B, (q, 1 q)) > U1 (S, (q, 1 q)),

BR1 = B
When q = 13 , any mixed strategy is a best response.

BoS
BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2

Now suppose that player 1 plays (p, 1 p). What is player

2s best response?
U2 ((p, 1 p) , B) = p, U2 ((p, 1 p) , S) = 2 (1 p)
When p < 23 , U2 ((p, 1 p) , B) < U2 ((p, 1 p) , S),

BR2 = S
When p > 23 , U2 ((p, 1 p) , B) > U2 ((p, 1 p) , S),

BR2 = B
When p = 23 , any mixed strategy is a best response.

BoS
BoS:

Bach
Stravinsky

Bach
2,1
0,0

Stravinsky
0,0
1,2

Now suppose that player 1 plays (p, 1 p). What is player

2s best response?
U2 ((p, 1 p) , B) = p, U2 ((p, 1 p) , S) = 2 (1 p)
When p < 23 , U2 ((p, 1 p) , B) < U2 ((p, 1 p) , S),

BR2 = S
When p > 23 , U2 ((p, 1 p) , B) > U2 ((p, 1 p) , S),

BR2 = B
When p = 23 , any mixed strategy is a best response.

BoS

We can again summarize this information in a graph:

blackboard.
(The graph can be found on P.113 of Osborne)

We can also graph player 2s best response function.

We now find three points at which the two best response

functions

 intersect:
 ((1, 0) , (1, 0)), ((0, 1) , (0, 1)), and
1 2
3, 3

2 1
3, 3

These are our Nash equilibria.

1 Mixed Strategies

2 Mixed Strategy Nash Equilibrium

3 Best Responses

4 Dominance

5 Finding All Mixed Strategy Nash Equilibria

Dominance Allowing for Mixed Strategies

Recall that the analysis of a game can be simplified by first

eliminating all strictly dominated actions.

We argued before that a strictly dominated action can never

be played in a Nash equilibrium.

Dominance Allowing for Mixed Strategies

Recall the definition for a strictly dominated action we had

earlier:
The action ai is strictly dominated, if there exists ai0 , such

that:
ui ai0 , ai > ui (ai , ai ) for all ai j6=i Aj .

According to this definition, ai0 strictly dominates ai if it gives

a strictly higher payoff to player i regardless of what pure

strategy profile the opponents play.
To what extend does this definition need to be adapted to
take into account of mixed strategies?

Dominance Allowing for Mixed Strategies

A natural extension should probably look like this:

The action ai is strictly dominated, if there exists i Ai

such that:
Ui (i , i ) > Ui (ai , i ) for all i j6=i Aj .

That is, we allow for mixed strategies when:

considering potential dominant strategies
considering the opponents strategy profiles

Dominance Allowing for Mixed Strategies

But is this strictly necessary?

The answer is: not really.
What we need is the following:
The action ai is strictly dominated if there exists a mixed

strategy i such that:

Ui (i , ai ) > Ui (ai , ai ) for all ai j6=i Aj .

Thus, all we need in addition to our old definition is to allow

for mixes strategies when we consider potential dominant

strategies. Why?

Example

Prisoners Dilemma:
Quiet Fink
Quiet
2,2
0,3
Fink
3,0
1,1
u1 (F , Q) = 3 > 2 = u1 (Q, Q);

u1 (F , F ) = 1 > 0 = u1 (Q, F ).
Thus, F strictly dominates Q for player 1 according to the

old definition.
However, can you find any mixed strategy 2 of player 2 such

that U1 (F , 2 ) fails to be strictly higher than U1 (Q, 2 )?

Example

Prisoners Dilemma:
Quiet Fink
Quiet
2,2
0,3
Fink
3,0
1,1
u1 (F , Q) = 3 > 2 = u1 (Q, Q);

u1 (F , F ) = 1 > 0 = u1 (Q, F ).
Thus, F strictly dominates Q for player 1 according to the

old definition.
However, can you find any mixed strategy 2 of player 2 such

that U1 (F , 2 ) fails to be strictly higher than U1 (Q, 2 )?

No. Why?

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

U1 ((p, 1 p) , (q, 1 q)) =

a (pq) + c [p (1 q)] + e [(1 p) q] + g [(1 p) (1 q)]

U2 ((p, 1 p) , (q, 1 q)) =

b (pq) + d [p (1 q)] + f [(1 p) q] + h [(1 p) (1 q)]

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

U1 ((p, 1 p) , (q, 1 q)) =

a (pq) + c [p (1 q)] + e [(1 p) q] + g [(1 p) (1 q)]

We can rewrite this as: U1 ((p, 1 p) , (q, 1 q)) =

q [a (p) + e (1 p)] + (1 q) [cp + g(1 p)]

Expected Payoff

A (prob. p)
B (prob. 1-p)

C (prob. q)
a,b (pq)
e,f ((1 p) q)

D (prob. 1-q)
c,d (p (1 q))
g,h ((1 p) (1 q))

We can rewrite this as: U1 ((p, 1 p) , (q, 1 q)) =

q [a (p) + e (1 p)] + (1 q) [cp + g(1 p)]

[a (p) + e (1 p)] is player 1s expected payoff if she chooses

the mixed strategy (p, 1 p) and player 2 plays the pure

strategy C .
Similarly [cp + g(1 p)] is her expected payoff if player 2

chooses the pure strategy D.

Expected Payoff

Thus, writing U1 ((p, 1 p) , C ) = a (p) + e (1 p) and

U1 ((p, 1 p) , D) = cp + g(1 p), we have:

U1 ((p, 1 p) , (q, 1 q))
= qU1 ((p, 1 p) , C ) + (1 q) U1 ((p, 1 p) , D)
In other words, player 1s expected payoff when player 2

chooses (q, 1 q) is simply a weighted average of her

expected payoffs when 2 plays pure strategies C and D.

Strict Dominance

Now suppose that x1 > x2 and y1 > y2 , then, for any

q [0, 1], we must have:

[qx1 + (1 q) y1 ] [qx2 + (1 q) y2 ]
= q (x1 x2 ) + (1 q) (y1 y2 )
> 0
Thus, if a strategy (mixed or pure) yields strictly higher

payoffs to a player than another strategy regardless of her

opponents pure strategy profiles, then it must be the case
that, the former yields strictly higher payoffs than the latter
regardless of her opponents mixed strategy profiles.

Example

Consider the following payoff function of player 1:

T
M
B
Are

L
3,
1,
0,
there

R
0,
2,
5,
any dominated strategies for player 1?

Example

Consider the following payoff function of player 1:

L R
T 3, 0,
M 1, 2,
B 0, 5,
T is NOT strictly dominated by M or B.
M is NOT strictly dominated by T or B.
B is NOT strictly dominated by T or M.

Example

Consider the following payoff function of player 1:

T
M
B
Can

L
3,
1,
0,
M be

R
0,
2,
5,
played in any mixed strategy Nash equilibrium?

Example

Consider the following payoff function of player 1:

L R
T 3, 0,

M 1, 2,
B 0, 5,
Can M be played in any mixed strategy Nash equilibrium? No.


M is strictly dominated by the mixed strategy = 21 , 0, 12 .

Example

Consider the following payoff function of player 1:

T
M
B
M is

L R
3, 0,
1, 2,
0, 5,
strictly dominated by the mixed strategy =

1
1
2 , 0, 2

U1 (, L) = 12 3 + 12 0 = 1.5, U1 (M, L) = 1; and,

U1 (, R) = 21 0 + 21 5 = 2.5, U1 (M, R) = 2.

Example

M is strictly dominated by the mixed strategy =

1
1
2 , 0, 2

U1 (, L) = 21 3 + 12 0 = 1.5, U1 (M, L) = 1; and,

U1 (, R) = 12 0 + 12 5 = 2.5, U1 (M, R) = 2.

By the argument we gave above, yields a strictly higher

payoff to player 1 than M does, regardless what mixed

strategy profile her opponents play. Therefore, M can never
be a best response to any mixed strategy profile of 1s
opponents, and, hence, can never be part of a Nash
equilibrium.

Dominance by Mixed Strategies

Thus, even though an action is not strictly dominated by any

other actions, it is still possible for it to be strictly

dominated by a mixed strategy.
When we allow for mixed strategies, there are more chances

for an action to be dominated.

Dominated Mixed Strategies

Any mixed strategy that assigns positive probability to a

strictly dominated action is strictly dominated. Why?

Therefore, a strictly dominated action can never be part of

any mixed strategies used in a Nash equilibrium.

We will not lose any mixed strategy Nash equilibrium if we

eliminated all strictly dominated actions.

1 Mixed Strategies

2 Mixed Strategy Nash Equilibrium

3 Best Responses

4 Dominance

5 Finding All Mixed Strategy Nash Equilibria

Finding all Nash Equilibria

Find all mixed strategy Nash equilibria of the following game:

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

An Algorithm

For each player i , choose a subset Si of her set of actions, Ai .

Check whether there exists a mixed strategy Nash

equilibrium such that each strategy i assigns positive

probability to all members of Si and only members of Si .
(That is, Si is the support of i .)
Repeat the analysis for every collection of subsets of the

players sets of actions.

Characterizing Mixed Strategy Nash Equilibria

A mixed strategy profile is a MSNE if and only if, for each

player i :

the expected payoff, given i

, associated with every action

that is chosen with positive probability by i is the same; and,

the expected payoff, given i

, associated with every action

that is chosen with zero probability by i is no higher than

the expected payoff to any action that is chosen with positive
probability.

Example

Find all mixed strategy Nash equilibria of the following game:

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

First, find all pure strategy Nash equilibria (i.e., first look at

Si s that are singleton sets).

No PSNE.

Example

L
R
T 2,2 2,3

M 0,3 3,2
B 3,1 0,2
Now, are there any MSNE where player 1 randomizes over T
and M and player 2 randomizes over L and R?
Let (p, 1 p) be the probabilities with which 1 chooses T

and M, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Let (p, 1 p) be the probabilities with which 1 chooses T

and M, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?
If (p, q) is a NE, we must have that: given p, 2 is indifferent
between L and R, and, given q, 1 is indifferent between T
and M.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

If (p, q) is a NE, we must have that: given p, 2 is indifferent

between L and R, and, given q, 1 is indifferent between T

and M.
That is, 2p + 3 (1 p) = 3p + 2 (1 p) and
2q + 2 (1 q) = 0q + 3 (1 q)


Solving the set of equations, we find that (p, q) = 12 , 31
satisfy the conditions.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Solving the set of equations, we find that (p, q) =

1 1
2, 3

satisfy the conditions.

1
3 , player 1s expected payoff from playing both
T and M is 2, and her expected payoff from playing B is 1.
So, we have a MSNE!




1 1
1 2
The MSNE is
2, 2, 0 , 3, 3 .
When q =

Example

L
R
T 2,2 2,3

M 0,3 3,2
B 3,1 0,2
Now, are there any MSNE where player 1 randomizes over M
and B and player 2 randomizes over L and R?
Let (p, 1 p) be the probabilities with which 1 chooses M

and B, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Let (p, 1 p) be the probabilities with which 1 chooses M

and B, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?
If (p, q) is a NE, we must have that: given p, 2 is indifferent
between L and R, and, given q, 1 is indifferent between M
and B.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

If (p, q) is a NE, we must have that: given p, 2 is indifferent

between L and R, and, given q, 1 is indifferent between M

and B.
That is, 3p + 1 (1 p) = 2p + 2 (1 p) and
0q + 3 (1 q) = 3q + 0 (1 q)


Solving the set of equations, we find that (p, q) = 12 , 21
satisfy the conditions.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Solving the set of equations, we find that (p, q) =

1 1
2, 2

satisfy the conditions.

1
2 , player 1s expected payoff from playing both M
and B is 1.5, and her expected payoff from playing T is 2.
So, this is not a MSNE after all.

When q =

Example

L
R
T 2,2 2,3

M 0,3 3,2
B 3,1 0,2
Now, are there any MSNE where player 1 randomizes over T
and B and player 2 randomizes over L and R?
Let (p, 1 p) be the probabilities with which 1 chooses T

and B, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Let (p, 1 p) be the probabilities with which 1 chooses T

and B, and (q, 1 q) be the probabilities with which 2

chooses L and R.
Can there be any pair (p, q) that is a MSNE?
If (p, q) is a NE, we must have that: given p, 2 is indifferent
between L and R, and, given q, 1 is indifferent between T
and B.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

If (p, q) is a NE, we must have that: given p, 2 is indifferent

between L and R, and, given q, 1 is indifferent between M

and B.
That is, 2p + 1 (1 p) = 3p + 2 (1 p) and
2q + 2 (1 q) = 3q + 0 (1 q)
But there cannot be any p [0, 1] that can solve the first
equation! Because, when player 1 never chooses M, R strictly
dominates L for player 2!

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

But there cannot be any p [0, 1] that can solve the first

equation! Because, when player 1 never chooses M, R strictly

dominates L for player 2!
Thus, we cannot have a MSNE in which 1 randomizes
between T and B and 2 randomizes between L and R.

Example

L
R
T 2,2 2,3

M 0,3 3,2
B 3,1 0,2
Finally, are there any MSNE where player 1 randomizes over
T , M, and B and player 2 randomizes over L and R?
Let (p, q, 1 p q) be the probabilities with which 1 chooses

T , M, and B, and (r , 1 r ) be the probabilities with which 2

chooses L and R.
Can there be any vector (p, q, r ) that is a MSNE?

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

Let (p, q, 1 p q) be the probabilities with which 1 chooses

T , M, and B, and (r , 1 r ) be the probabilities with which 2

chooses L and R.
Can there be any vector (p, q, r ) that is a MSNE?
If (p, q, r ) is a NE, we must have that: given p and q, 2 is
indifferent between L and R, and, given r , 1 is indifferent
between T , M, and B.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

If (p, q, r ) is a NE, we must have that: given p and q, 2 is

indifferent between L and R, and, given r , 1 is indifferent

between T , M, and B.
That is, 2p + 3q + 1 (1 p q) = 3p + 2q + 2 (1 p q)
and 2r + 2 (1 r ) = 0r + 3 (1 r ) = 3r + 0 (1 r )
We cant find a vector (p, q, r ) such that these equations are
all satisfied. Therefore, there cannot be any MSNE here.

Example

T
M
B

L
2,2
0,3
3,1

R
2,3
3,2
0,2

In the end,
we conclude

that the unique MSNE of this game

is

1 1
2, 2, 0

1 2
3, 3

Example

Find all mixed strategy Nash equilibria of the following game:

T
M
B

L
4,2
2,3
1,1

R
2,3
2,2
3,2