Give brief definitions of the following concepts: Game theory, cooperative equilibrium, noneooperative equilibrium, dominant strategy, and Nash equilibrium, and price leadership. To do this, identify the definition for each term from the following list.
1 Actions taken by a firm to achieve a goal, such as maximizing profits.
2 The study of how people make decisions where attaining goals depends on interactions with others.
3 A table that shows the payoffs each firm earns from every combination of firm strategies.
4 An agreement among firms to charge the same price or otherwise not to compete.
5 A strategy that is the best for a firm, no matter what strategies other firms use.
6. A situation in which each firm chooses the best strategy given the strategies chosen by other firms.
7. A game outcome in which players seek to increase their mutual payoff.
8. A game outcome in which players pursue their own self-interest.
9. A situation in which no player can make himself better off by changing his decision at any decision node.
10. A situation where one firm announces a price change, which is matched by other firms in the industry.
a. Game theory:
b. Cooperative equilibrium:
c. Noncooperative equilibrium:
d. Dominant strategy:
e. Nash equilibrium:
f. Price leadership: