[This is part of the series: The Complete Guide To Economics 101.]
What is a dominant strategy?
In game theory, a Dominant Strategy is a strategy that is best – regardless of the decisions made by others.
Look at another instance of prisoners’ dilemma.
Cain and Able are caught and interrogated for a crime.
They both have the option to confess, or be quiet.
Here are their options:
Able Confesses Able Remains Quiet
Cain Confesses Able gets 10 years Able gets 25 years
Cain gets 10 years Cain goes free
Cain Remains Quiet Able goes free Able gets 2 years
Cain gets 25 years Cain gets 2 years
Here, confessing is the dominant strategy.
10 years in prison is better than 25 years – and being let go is better than 2 years.