Saddle point, Managerial Accounting

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Saddle Point

The saddle point in a payoff matrix is one which is the smallest value in its row and the largest value in its column. It is also termed as equilibrium point in the theory of games.

Saddle point also provides the value of such a game. In a game having a saddle point, the optimum strategy for both players is to play the row or column containing the saddle point.

Note:   
If in a game there is no saddle point, the players will resort to what is known as mixed strategies.


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