What is meant by the concept of a Nash equilibrium?
A) It is an outcome where the player has played his or her dominant strategy.
B) It is an outcome where both players have the incentive to change their strategy.
C) It is the outcome where neither player wishes to change his or her strategy unilaterally.
D) It is the same as a dominant strategy outcome.

Question

Quizplus · Accepted Answer

A Nash equilibrium is a situation in a game where each player is pursuing their best possible strategy given the strategies of the other players. In a Nash equilibrium, no player has an incentive to change their strategy unilaterally, because doing so would result in a worse outcome for them. Therefore, choice C is the correct answer. Choice A is incorrect, because a Nash equilibrium does not necessarily involve a player's dominant strategy. Choice B is incorrect, because if both players have an incentive to change their strategy, then they are not in a Nash equilibrium. Choice D is also incorrect, because a Nash equilibrium does not mean that there is a dominant strategy outcome.

What Is Meant by the Concept of a Nash Equilibrium