Medical Arms Race and Game Theory in Economics

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1) Explain what a “dominant strategy” is in game theory. 

(2) Using Box 14-1, replace the entry in the first row, second column with (125, -50). Does A have a dominant strategy? Does B? What is the solution to this game? 

(3) Why is the medical arms race less a problem today than it once was? 

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1. dominant strategy is  that dominates all the other strategies .t earns a player a larger payoff than the other.

2.   [125     -50  ] 

A has a dominant strategy

Solution of the game  125, -50

3. this is due to the development of the new medical race which has been brought up by research and policy.




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