In game theory, a plan detailing the action that a player will take at each decision node during the play of a game. A dominant strategy exists if one choice of action by a player is always best whatever actions are chosen by other players. A mixed strategy uses a randomizing device, such as tossing a coin, to choose between two or more actions: this has the advantage of making it impossible for other players to predict the randomizing player's choice of action, as the latter does not know what it will be until after the randomizing device has been used. An open loop strategy is one where the rules to be followed are laid down at the start and do not change; a closed loop strategy includes ‘feedback’, that is, rules about changing the rules in the light of experience. See also punishment strategy.
Subjects: Economics — Mathematics.