A higher discount rate lowers the value of costs and benefits further into the future. A lower discount rate favors costs and benefits that occur closer to the present. Dominant Strategy A strategy is dominant if it does better than all other strategies in at least one circumstance and as well as every other strategy in all circumstances. Strategy A strategy is dominated if it does worse than another strategy in at least one circumstance and no better than that strategy in all circumstances. Usually associated with a competitive free market in which supply meets demand.
Efficiency is usually an argument for private enterprise and against government intervention.
Also, see Pareto Efficiency . EMV Expected Monetary Value. Equilibrium An outcome is in equilibrium if, given that outcome, no party regrets its choice of strategy. Usually an argument for government intervention and a sign of a market failure. We strive for equity and efficiency in markets and society, but often have to give up some of one for more of the other.