When all players are choosing their best strategies on the assumption that their opponents are doing likewise, the outcome is called:
A)a Stackelberg equilibrium.
B)a Nash equilibrium.
C)a Cournot equilibrium.
D)a Bertrand equilibrium.

Question

Quizplus · Accepted Answer

The situation described in the question is a classic example of a Nash equilibrium. In a Nash equilibrium, no player can increase their payoff by unilaterally changing their strategy, assuming that all other players are also playing their best strategies. Therefore, all players are effectively "stuck" in their current strategy choices, and the outcome is stable. The other answer choices (A, C, and D) describe different types of equilibrium outcomes in game theory, but they do not fit the scenario described in the question.

When All Players Are Choosing Their Best Strategies on the Assumption