Which of the following statements about Nash equilibrium is true?
A)Every finite game has more than one Nash equilibrium.
B)A pair of dominant strategies in a price-fixing game is always a Nash equilibrium.
C)A dominance solvable game does not have a Nash equilibrium.
D)Games with an infinite number of strategies have multiple Nash equilibria.

Question

Quizplus · Accepted Answer

In a price-fixing game, if both firms have a dominant strategy of agreeing to a high price, then this is a Nash equilibrium, as neither firm has an incentive to deviate from this strategy. However, this may not be the only Nash equilibrium in the game. Option A is false as there may be games with only one Nash equilibrium. Option C is false as a dominance solvable game may have a unique or multiple Nash equilibria. Option D is false as games with an infinite number of strategies may not have any Nash equilibrium.

Which of the Following Statements About Nash Equilibrium Is True