ABSTRACT
If a person’s information is not perfect—if information sets encompass two or more decision nodes—then backward reduction works only if that (and every other) player has an unambiguous best choice at each such set. Aside from establishing a seemingly paradoxical result, mixed strategies are important because they offer a mathematical solution to games without pure strategy Nash equilibria. Despite this seemingly straightforward answer, the value of the concept of a mixed strategy depends on the care we exercise in modeling a situation. If the strategic form accurately reflects the strategic environment, then mixed strategies are merely a mechanism for choosing a pure strategy in such a way that opponents cannot take advantage of their knowledge. If our strategic form is but a crude approximation to reality, then the notion of mixed strategies may make little or no sense.
