Suppose Manuel and Poornima are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Manuel chooses Right and Poornima chooses Right, Manuel will receive a payoff of 3 and Poornima will receive a payoff of 7. Poornima
Left Right
Manuel Left 4,4 3,3
Right 5,4 4,3
The only dominant strategy in this game is for (Manuel/Poornima) to choose (left/right).
The outcome reflecting the unique Nash equilibrium in this game is as follows: Manuel chooses (left/right) and Poornima chooses (left/right).

/Poornima to choose right

Manuel to choose left

LEFT

right

Explanation:

Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.

Dominant strategy is the best option for a player regardless of what the other player is playing.

Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.

If  Poornima chooses left, her payoffs are 4 or 3. If she chooses right they are 5 or 4

If  Manuel chooses left, her payoffs are 4 or 4. If she chooses right they are 3 or 3

It is Poornima that has a dominant strategy and it is to choose right because the payoffs of the right are greater than that of the left

For Manuel, the dominant strategy is to choose left

the Nash equilibrium is left for Manuel and right for Poornima

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