. This is easiest in a two-strategy

. This is easiest in a two-strategy
situation; when there are many possible strategies, dominant strategies have
to be found by a process of eliminating dominated strategies, as shown in the
subsection on Nash bargaining. To start with, let us take the PD situation in
Table 9.2, involving Coke and Pepsi. The reader may have wondered why we
said earlier that the equilibrium in the PD situation was for both players to
‘defect’, with the result being that their combined payoff was less than the
optimal combined payoff; both players end up worse than they could be if they
‘co-operated’.