ABSTRACT
Orthodox game theory identifies rational solutions to interpersonal and strategically interdependent decision problems, games, using the notion of individualistic best-response reasoning. When each player’s chosen strategy in a game is a best response to the strategies chosen by other players, they are said to be in a Nash equilibrium – a point at which no player can benefit by unilaterally changing his or her strategy. Consider the Hi-Lo and the Prisoner’s Dilemma two-player games illustrated in Figures 23.1 and 23.2. The strategies available to one of the two players are identified by rows and those available to the other by columns. The numbers in each cell represent payoffs to the row and the column players respectively in each of the four possible outcomes in these games.
