A Nash equilibrium occurs when
A)there is a clear strategy for each player independent of the other player's actions.
B)each player takes the best possible action given the other player's action.
C)each player complies with the collusive agreement.
D)you cooperate until the other player cheats, and then you cheat forever.
E)none of the above.

Question

Quizplus · Accepted Answer

A Nash equilibrium occurs when each player takes the best possible action given the other player's action. It is a situation where neither player has an incentive to change their strategy, given the strategy of the other player. This results in a stable outcome, even though neither player is necessarily maximizing their individual payoff.

A Nash Equilibrium Occurs When