ECON 201:

Games and Strategies

Simultaneous Move Games with Mixed Strategies
• Until now, the strategy of each agent corresponded to a single
action. Such strategies in simultaneous-move games are called
pure strategies.

• Example: Prisoners’ dilemma Cooperate

Defect
No equilibrium: no pair of actions best
response to each other

Hingis
DC CC
50, 50 80, 20

DC
Seles

90, 10 20, 80
CC

Tennis Game
• pure strategy in a simultaneous-move game = action
also = expectation of
other’s action

Player 1’s expectation of others’ actions is uncertain.

Thus,
Player 1’s best response is uncertain.

• We want to model this uncertainty.

• To handle these issues, we will introduce:

• 1. Mixed Strategies
• 2. Mixed Strategy Nash Equilibrium
What is a mixed strategy?
• It specifies that a pure strategy be chosen randomly
that is,
• it assigns probabilities to the agent's pure strategies.

• Choose a mixed strategy = choose a probability (of playing) for

each pure strategy

• A mixed strategy is a probability distribution of pure strategies

Intuition for a mixed strategy
• A population of agents (say, tennis players)

• Interpretation 1:
• Some percentage p of them plays DL all the time
• The remaining percentage (1-p) of them play CC all the time

• Interpretation 2:
• Each agent sometimes plays DL ( p percent of the time )
• and sometimes plays CC ( (1-p) percent of the time )
• Example: (chicken game between Mercedes and BMW drivers)
• Some Mercedes drivers always Swerve, and some always go
straight
• Example:(tennis game) sometimes DL, sometimes CC
• Example: (the chicken game) I throw a coin. If heads, I swerve;
if tails, I go straight.
• So a mixed strategy is two probability numbers:
• 1/2 for Swerve (in general p for Swerve)
• 1/2 for Straight (in general 1-p for Straight)
• Every pure strategy is a degenerate mixed strategy
• It simply says that this pure strategy be chosen 100% of the
time.
• That is, you assign the probability number 1 to that pure
strategy and
• the probability number 0 to all other strategies.
A (strategic) game with mixed strategies
is
1. A set of players N

2. For each player i in N, a set of his strategies:?

3. For each player i in N, his payoff function:?

Defining mixed strategies
• Si the set of pure strategies of player i

• ∏(𝑆𝑖) the set probability distributions on 𝑆𝑖

= the set of mixed strategies of player i

• Πi in Π(𝑆𝑖) is a typical mixed strategy for i

• πi(si) the probability of pIayer i playing pure strategy si

• πi : Si à[0,1] is a function such that the sum of Π𝑖(𝑆𝑖) numbers is 1

' 𝜋𝑖 𝑠𝑖 = 1
!! ∈#$
Defining payoffs of mixed strategies

• ui ( . ) player i’s payoffs from pure strategies

• Example: ui( si , s-i )
• Ui( . ) player i’s payoffs from mixed strategies
• Example: Ui( πi , π-i )
• Important assumption:
• Ui( πi , π-i ) is the expected payoff of i from lottery ( πi , π-i )
• it is a weighted average of ui( si , s-i ) values where
• the weight of ui( si , s-i ) is π1 (s1 ). π2 (s2 ). … πn (sn )
• Example:
• Say you will get payoff X1 with probability p1
X2 with probability p2
……….
Xn with probability pn

• Then your expected payoff is the weighted averages from its

constituent pure strategies:
p1 X1 + p2 X2 +…. + pn Xn
Agent i’s expected payoff from the mixed
strategy profile: ( π1 ,…, πn )

• 𝑈𝑖( π1 ,…, πn )= 𝛴 𝑢𝑖 𝑠1, … , 𝑠𝑛 𝜋1(𝑠1) , … , 𝜋𝑛(𝑠𝑛)

(s1,s2,…sn)
∈ 𝑆1 𝑋 𝑆𝑛

The probability of
the pure strategy
Agent i’s payoff from
profile (s1,…,sn)
The summation is over all the pure strategy being played
strategy profiles profile (s1,…,sn)
πSeles(DL) = 0.75 πSeles(CC) = 0.25

πHingis(DL) = 0.65 πHingis(CC) = 0.35

Hingis
DL CC

50, 50 80, 20
DL
Seles

CC 90, 10 20, 80

USeles=

UHingis=
• A (strategic) game with mixed strategies is
1.A set of players N
2.For each player i in N,
• a set of his pure strategies: Si
• and from that a set of his mixed strategies: Π(Si )
3.For each player i in N,
• his payoff function on pure strategies: ui ( . )
• and from that his payoff function on mixed strategies: Ui( . )
• Payoffs are no more ordinal

• With pure strategies, two games are equivalent if in them players’

ranking of outcomes are identical
• Ex: prisoner’s dilemma and students doing a joint project

• This is no more true when mixed strategies are allowed

• Because, the players’ ranking of lotteries might be different in the two
games.
Example:
Consider the lottery which gives 0.25 probability to each cell

L C L C

T 2, 1 1, 0 T 8, 1 1, 0

B 1, 0 -2, 1 B 1,0 -2, 1

Nash equilibrium in mixed strategies:
Specify a mixed strategy for each agent
that is, choose a mixed-strategy profile
with the property that
each agent’s mixed strategy is a
best response
to her opponents’ strategies.
Intuition for mixed strategy Nash
equilibrium

• It is a steady state of society in which the frequency of each action is

fixed (with pure strategies it was a fixed action instead)
Seles vs. Hingis: no pure strategy Nash eq.
What would be the expectation in reality?
Extending the game
• Allow mixed strategies πH for Hingis:
• play DL with probability q and
• play CC with probability (1-q)
• If Seles plays DL, her expected payoff is
USeles ( DL , πH ) = 50 q + 80 (1-q)
• If Seles plays CC, her expected payoff is
USeles ( CC , πH ) = 90 q + 20 (1-q)
Extending the game table for the column
player: An infinite number of new columns
Given a q-choice for Hingis, what will Seles choose?

DC CC q-mix
50 80 50q+80(1-q)
DC
Seles

90 20 90q+20(1-q)
CC
Seles’ best responses to different q choices
of Hingis:
• Against q s.t. q < 0.6 Seles plays DL
• Against q s.t. 0.6 < q Seles plays CC
• Against q = 0.6 Both pure strategies best response

If two pure strategies are the best

responses, then any mixture is also the best
response.
Fix q = 0.6
Then USeles ( DL , πH ) = USeles ( CC , πH ) = 62

Fix a mixed strategy πS for Seles:

play DL with probability p and
play CC with probability (1-p)

Seles’ expected payoff from (πS , πH ) is

USeles (πS , πH ) = pq USeles (DL , DL ) + p(1-q) USeles(DL , CC )

+ (1-p)q USeles( CC , DL ) + (1-p)(1-q) USeles( CC , CC )
= p USeles( DL , πH ) + (1-p) USeles( CC , πH )
= p 62 + (1-p) 62 = 62
Seles’ best responses to different q choices
of Hingis:
• Against q s.t. q < 0.6 Seles plays p = 1

• Against q s.t. 0.6 < q Seles plays p = 0

• Against q = 0.6 Seles plays any p in [0,1]

The best response curve of Seles:
What will Hingis do?
• Fix a mixed strategy πS for Seles:
play DL with probability p and
play CC with probability (1-p)
• If Hingis plays DL, her expected payoff is:
UHingis ( πS , DL ) = 100 – [50 p + 90 (1-p)] = 100 - USeles (πS , DL )
• If Hingis plays CC, her expected payoff is:
UHingis ( πS , CC ) = 100 – [80 p + 20 (1-p)] = 100 - USeles (πS , CC )
Extending the game table for the row player:
An infinite number of new rows

Hingis

DC CC
50, 50 80, 20
DC

90, 10 20, 80
Seles

CC

50p + 10(1 – p) 20p + 80(1 – p)

P-mix

Given a p-choice for Seles, what will Hingis choose?

• Hingis’ best responses to different p choices of Seles:
Against p s.t. p < 0.7 Hingis plays CC

Against p s.t. 0.7 < p Hingis plays DL

Against p = 0.7 Both pure strategies best response

( => all mixed strategies best response )
• Hingis’ best responses to different p choices of Seles:
Against p s.t. p < 0.7 Hingis plays q = 0

Against p s.t. 0.7 < p Hingis plays q = 1

Against p = 0.7 Hingis plays any q in [0,1]

• The mixed strategy Nash equilibrium is
( ( 0.7, 0.3 ), ( 0.6, 0.4 ) )
• and the payoff profile resulting from this equilibrium is
( 62, 100-62 )
• Note:
• At the equilibrium, Seles gets the same expected payoff from DL and
CC
USeles ( DL , πH ) = USeles ( CC , πH) = 62
• Similarly, Hingis gets the same payoff from DL and CC
UHingis ( πS , DL ) = UHingis ( πS , CC ) =100 -62
 Very Useful Proposition: Proof:

• If a player is playing a mixed • Suppose his expected payoff from

strategy as a best response A was larger than B (note that his
• and if he assigns positive current payoff is a weighted
probability to two of his actions average of these)
(say A , B) • Then he can transfer some
• then his expected payoffs from probability (i.e. weight) from B to A
these two actions are equal and increase his payoff
• But this means, his original
strategy was not the best
response, a contradiction. So, the
expected payoffs of A and B must
be equal.
Use this proposition to develop a faster way of finding the
equilibrium.

Dixit and Skeat call it the “leave the opponent indifferent” method
Hingis
DC CC
50, 50 80, 20 50q+80(1-q)
DC
Seles

90,10 20, 80 90q+20(1-q)

CC

50p+10(1-p) 20p+80(1-p)
Counter-intuitive mixture in the probabilities.

Hingis’ payoff dorm DC increased, will the q increase?

Hingis
DC CC
30, 70 80, 20 30q+80(1-q)
DC
Seles

90,10 20, 80 90q+20(1-q)

CC

70p+10(1-p) 20p+80(1-p)
 James
Swerve Straight q-mix
0, 0 -1, 1

Swerve 1, -1 -2, -2
Dean
Straight
p-mix
Observe 1:
• A pure strategy Nash equilibrium of a game in pure strategies,
• after mixed strategies are allowed,
• continues to be an equilibrium
• They are now mixed strategy equilibria where agents choose
very simple (degenerate) mixed strategies (i.e., play this action
with probability 1 and play everything else with probability 0)
Observe 2:

• A Nash equilibrium in mixed strategies where each agent plays

a pure strategy with probability one,

• after mixed strategies are dropped,

• continues to be an equilibrium in pure strategies.

A university is contemplating whether to build a new lab or a new theater
on campus. The science faculty would rather see a new lab built, and the
humanities faculty would prefer a new theater. However, the funding for
the project (whichever it may turn out to be) is contingent on unanimous
support from the faculty. If there is disagreement, neither project will go
forward, leaving each group with no new building and their worst payoff.
The meetings of the two separate faculty groups on which proposal to
support occur simultaneously, with payoffs given in the following table:

Humanities Faculty
Lab Theater q-mix
2,1 0, 0

Lab
Science Faculty
Theater
p-mix 0,0 1, 2