Answered: Define behaving strategically

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 8QP

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Define behaving strategically

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Step 1

A strategy is an action plan for playing the game. A method may be a simple action plan or an elaborate action plan that may depend on the player's earlier action or reaction.

Step 2

A game is an abstract model of a strategic situation in which players make a strategic decision. Behaving strategically implies that participants consider the impact of each other actions, reactions, and counteraction.
While acting strategically, each participant believes that rivals are rational and decide to maximize their payoff. This fact shall be taken into consideration when a participant agrees to choose a particular strategy.

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