Dominant Strategy in Game Theory: Definition, Examples and How to Find It

Game Theory

Game Theory · StrategyDominant Strategy in Game TheoryThe clearest solution concept in game theory — when one strategy is always best, regardless of what anyone else does.In most strategic situations, the best thing to do depends heavily on what your opponent does....

Zero-Sum vs Non-Zero-Sum Games: Key Differences with Examples

Game Theory

Game Theory · Core ConceptsZero-Sum vs Non-Zero-Sum GamesOne of the most fundamental distinctions in game theory — and one that determines whether cooperation is even possible between rational players.When two people negotiate a salary, does one person’s gain...

The Prisoner’s Dilemma Explained: The Classic Game Theory Problem

Game Theory

Game Theory · Classic ProblemsThe Prisoner’s DilemmaWhy two perfectly rational individuals can end up worse off by acting in their own self-interest — the most famous problem in all of game theory.Imagine you and a friend are arrested for a crime. The police...

Matrix Algebra for Economists: Operations, Determinants, Cramer’s Rule and Leontief Input-Output Analysis

Mathematical Economics, Microeconomics

Matrix Algebra for Economists: Operations, Determinants, Cramer’s Rule and Leontief Input-Output AnalysisAn economy is a web of industries feeding into one another — steel needs coal, coal needs steel, both need electricity. Wassily Leontief won a Nobel Prize...

Elasticity Mathematics: Point vs Arc Elasticity, Cross-Price Elasticity and the Lerner Index

Mathematical Economics, Microeconomics

Elasticity Mathematics: Point vs Arc Elasticity, Cross-Price Elasticity and the Lerner IndexElastic and inelastic get thrown around loosely, but elasticity is a precise number with a precise formula — and which formula you use changes the answer. Get the mathematics...

Nash Equilibrium Explained: Definition, Examples and Real-World Applications

Game Theory

Game Theory · Nash EquilibriumNash Equilibrium ExplainedThe single most important concept in game theory — what happens when every player is doing the best they can given what everyone else is doing.In 1950, a 22-year-old PhD student at Princeton submitted a 27-page...

Market Failures, Externalities, and Public Goods: Why Markets Get It Wrong

Microeconomics, Public Economics

Market Failures, Externalities, and Public Goods Markets are amazing — but sometimes they get it spectacularly wrong Markets don’t always work perfectly In your textbook, markets sound like a beautiful, self-correcting machine. Supply meets demand, price...

Partial Derivatives in Economics: Marginal Products, Multivariable Optimisation and the Chain Rule

Mathematical Economics, Microeconomics

Partial Derivatives in Economics: Marginal Products, Multivariable Optimisation and the Chain RuleA firm chooses labour and capital. A consumer eats many goods. Demand depends on price, income and substitutes at once. The ordinary derivative handles one variable;...

The Cobb-Douglas Production Function: Returns to Scale, Elasticity and Cost Minimisation

Mathematical Economics, Microeconomics

The Cobb-Douglas Production Function: Returns to Scale, Elasticity and Cost MinimisationIn 1927 a future US senator and a mathematician noticed that labour’s share of American income had barely moved in decades. The equation they wrote to explain it — output...

Game Theory and Nash Equilibrium: Strategic Decision-Making in Economics

Game Theory, Microeconomics

Game Theory and Nash Equilibrium When your best move depends on what everyone else does This isn’t just about games You’ve probably played a game where your move depends entirely on what your opponent does. Chess, poker, even rock-paper-scissors. But...