Which of the following statements is true about the Nash equilibrium?
A)It is the solution concept used in games that are played forever.
B)It reduces the possibility of compromise.
C)It is the solution concept used to predict the outcome of competitive interaction.
D)It is a set of moves in a game that simultaneously minimize each firm's payoff.

Question

Quizplus · Accepted Answer

The Nash equilibrium is a solution concept used to predict the outcome of competitive interaction, where each player's strategy is optimal given the strategies of the other players. It does not necessarily reduce the possibility of compromise, and it is not the solution concept used in games that are played forever. Option D is also incorrect as the Nash equilibrium is a set of strategies, not moves, and it maximizes each firm's payoff, rather than minimizing it.

Which of the Following Statements Is True About the Nash