Competitive equilibrium and Nash equilibrium:
A)are such that competitive equilibria are a subset of Nash equilibria.
B)are such that Nash equilibria are a subset of competitive equilibria.
C)are not related.
D)are inconsistent with each other.

Question

Quizplus · Accepted Answer

Competitive equilibrium is a type of Nash equilibrium that is reached when each player in a game chooses their optimal strategy, given the strategies of the other players, such that no player can benefit by changing their strategy unilaterally. Therefore, all competitive equilibria are also Nash equilibria, but not all Nash equilibria are competitive equilibria.

Competitive Equilibrium and Nash Equilibrium