Nash equilibrium is:
A)where one player maximizes his payoff and the other doesn't
B)when each player's strategy is the best response to the other player's strategy
C)where the outcome is always efficient
D)difficult to determine

Question

​Nash equilibrium is:
A)​where one player maximizes his payoff and the other doesn't
B)when each player's strategy is the best response to the other player's strategy
C)where the outcome is always efficient
D)​difficult to determine

Quizplus · Accepted Answer

Nash equilibrium is a situation where each player's strategy is the best response to the other player's strategy, meaning that no player can benefit by changing their strategy. It is a stable state in game theory, and is commonly used in economics to analyze the behavior of firms and consumers in different market situations. Choice A is not a correct definition of Nash equilibrium, as it suggests that only one player benefits. Choice C is incorrect, because Nash equilibrium does not always result in an efficient outcome. Choice D is partly correct, as calculating Nash equilibrium can be difficult in complex games, but it is still a well-defined concept in game theory.

​Nash Equilibrium Is

Nash Equilibrium Is