What is a Nash Equilibrium?

A Nash equilibrium is a common solution concept used in game theory for non-cooperative (i.e. players cannot work together or communicate), 2+ player games where given all other players' strategy choices, each player can do no better by changing his own strategy. 

Suppose there are two players, A and B, that can choose to play either strategy X or strategy Y.  Player A and Player B both playing strategy X (i.e. A,B: {X,X}) is a Nash Equilibrium if and only if neither player can increase her payoff by deviating to playing Y holding constant the other player's strategy at X.  Note, there can be multiple Nash Equilibria in a game.

RC
Answered by Raees C. Economics tutor

3015 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What would be the impact on the multipler effect given an increase in income tax?


Evaluate whether higher government spending will always increase inflation.


What are the assumptions of perfect competition?


What are the different types of price discrimination?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences