Overview
Nash Equilibrium is a fundamental concept in game theory that describes a stable state in strategic interactions where players' choices are optimal given the choices of others. It highlights the importance of understanding how individual strategies can lead to collective outcomes, influencing variou...
Key Terms
Example: Game theory helps analyze competitive situations in economics.
Example: Choosing to cooperate or compete is a strategic decision.
Example: In a business game, profits are the payoffs.
Example: Always pricing lower than competitors can be a dominant strategy.
Example: If competitors lower prices, the best response may be to match them.
Example: In a market, equilibrium occurs when supply equals demand.
Related Topics
Game Theory Applications
Explores how game theory is applied in various fields like economics and political science.
intermediateCooperative Game Theory
Focuses on how players can benefit from cooperation and forming coalitions.
advancedEvolutionary Game Theory
Studies strategic interactions in biological contexts, such as animal behavior.
advancedKey Concepts
Game TheoryStrategyPayoffEquilibrium