Risk dominance
Of two equilibria, the risk dominant one is the equilibrium a player would choose if they thought the other side equally likely to do either thing, which in a stag hunt can point to the outcome both players like less.
Often misread asExpecting the risk dominant and payoff dominant equilibria to be the same one, so the selection question is treated as settled whichever way you look at it.
How to see it
The safe equilibrium, not the good one
Set aside which equilibrium pays more and ask which one you would pick if you had no idea what the other person would do and treated both of their options as equally likely. Whichever wins that test is risk dominant. It is the cautious choice rather than the attractive one.
The checkThey very often point in opposite directions, and that conflict is the whole reason equilibrium selection is a subject at all.
Try itIn a stag hunt where joint stag pays four each, hare pays three whatever the other does, and hunting stag alone pays nothing, work out each action's expected payoff against a coin flip. Hare gives three and stag gives two, so hare is risk dominant while stag pays more. That is the conflict in one example.
Games that show it
Know these first
Easily confused with
Sources
- Harsanyi, J. C. & Selten, R. (1988). MIT Press. Source of risk dominance.