Nash equilibria always maximize total surplus in society.

Question

Quizplus · Accepted Answer

Nash equilibria do not necessarily maximize total surplus in society. Nash equilibria occur when no player has an incentive to change their strategy given the strategies of the other players. While Nash equilibria can lead to efficient outcomes, they can also lead to outcomes where there are inefficiencies and lower total surplus. Therefore, it is not always the case that Nash equilibria maximize total surplus.

Nash Equilibria Always Maximize Total Surplus in Society