Game Theory: Dominant Strategies & Nash Equilibrium

This video covers the following learning objectives:

✅ Define game theory and its relevance to strategic decision-making.
✅ Identify players, strategies, and payoffs within a game-theoretic framework.
✅ Explain and recognize a dominant strategy, where a player’s best choice does not depend on other players’ actions.
✅ Understand how dominant strategies can lead to suboptimal outcomes for all players (e.g., Prisoner’s Dilemma).
✅ Define and interpret Nash Equilibrium, where no player benefits from changing their strategy alone.
✅ Apply game theory to real-world examples such as pricing wars, advertising battles, and oligopolistic market behavior.
✅ Demonstrate understanding through Excel-based payoff matrices and strategic analysis.
✅ Connect game theory concepts to exam-relevant scenarios across CFA, CSC, CFP, and FRM programs.