Lesson
The theory โ Nash Equilibrium in a Two-by-Two Game
A Nash equilibrium is a pair of strategies, one for each player, where neither can do better by changing alone. It is a statement about unilateral moves only: it does not say the outcome is good, fair, or the best either player could hope for. A mixed strategy is a probability over the two moves, and a mixed equilibrium is the case where each player is deliberately unpredictable โ which they can only be at one exact frequency.
What each symbol means
p- how often the row player chooses their top row
q- how often the column player chooses their left column
- Assumes
- That both players know the whole payoff matrix, choose at the same moment, and cannot promise each other anything. Every one of those can be relaxed and each relaxation is a different branch of game theory โ sequential games, incomplete information, cooperative games โ with different answers to the same eight numbers.
Problem solved in full
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What does mixing actually buy you? The tool prints the equilibrium frequencies, and it is easy to read them as a way of exploiting the other player. They are not. Work out what the row player earns when the column player abandons the equilibrium entirely, in each of two games.
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Take the penalty kick. Write the kicker's expected scoring chance as a function of both mixes, with p for shooting left and q for the keeper diving left.
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Collect the q terms. The kicker's chance depends on the keeper only through the bracket multiplying q, and at p = 20/55 that bracket is exactly zero.
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So at his equilibrium mix the kicker scores 79.09% whatever the keeper does โ dive left every time, dive right every time, flip a coin, it makes no difference. That is a guarantee, and it is what he is buying.
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Now the same calculation for Chicken, where the two payoff matrices are not tied together.
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At p = 1/3 the bracket is 4, not 0. The row player's payoff still depends entirely on the other driver: 0.33 if they never swerve, 4.33 if they always do.
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The reason is that a penalty kick is constant-sum: every point the kicker gains is one the keeper loses, so making the keeper indifferent and making your own payoff safe are the same act. Chicken's two matrices are independent, its cells sum to 6, 6, 6 and 0, and the two come apart.
Answer
In a constant-sum game the equilibrium mix is a guarantee. The kicker's 79.09% holds against every keeper, including one who has read this page, which is von Neumann's minimax theorem and the reason professional footballers became a research subject: Ignacio Palacios-Huerta estimated the scoring chances from league penalty kicks, worked out the minimax frequencies they imply, and could not reject the hypothesis that the players were using them. Chicken has no such guarantee. The row player who mixes 1/3 earns anywhere from 0.33 to 4.33 depending on a driver they do not control, and 1.67 is merely what arrives if that driver plays their part too. Constant-sum is enough for the guarantee but it is not what the guarantee requires โ set the row player's payoffs to 4, 0, 0, 4 against the column player's 7, 2, 3, 8 and the cells sum to 11, 2, 3 and 12 while the row player is still pinned at exactly 2.00 whatever the column player does. What the guarantee actually needs is for the mix that makes your opponent indifferent to be the same mix that cancels their influence on you, and constant-sum forces those two to coincide.
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Learning path
The best reply, and what happens when nobody computes one
References (3)
- Two pages, and the reason every game on this tool has an equilibrium at all: J. F. Nash, "Equilibrium points in n-person games." Proceedings of the National Academy of Sciences 36(1), 1950, pp. 48โ49.
- Where insight block 3's "one or three, never two" comes from: R. Wilson, "Computing Equilibria of N-Person Games." SIAM Journal on Applied Mathematics 21(1), 1971, pp. 80โ87.
- The empirical test the worked problem ends on โ whether people actually mix at the equilibrium frequencies: I. Palacios-Huerta, "Professionals Play Minimax." Review of Economic Studies 70(2), 2003, pp. 395โ415.