Home » Eng Finance » M » Mixed strategy

Mixed strategy

The use of a random mixture of strategies in a game. The choice between two or more strategies on any particular occasion depends on using some randomizing device, such as tossing a coin or rolling a die. An agent using a mixed strategy does not know what their own actions will be on any particular occasion until the randomizing device has been used, but they do know the probability with which different actions will be chosen. The benefit of adopting a mixed strategy is to make it impossible for any opponent to predict player’s actions with certainty, however well they understand the player’s psychology.

Reference: Oxford Press Dictonary of Economics, 5th edt.