Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A situation where one player can unilaterally improve their payoff
B
A situation where all players choose their best strategy given the strategies of others
C
A situation where players cooperate to achieve the best outcome
D
A situation where all players are indifferent between their strategies
Understanding the Answer
Let's break down why this is correct
Answer
A Nash Equilibrium happens in a non-cooperative game when each player makes their best decision based on what they think the other players will do, and no one has an incentive to change their choice. This means that if all players stick to their current strategies, they are all making the best possible outcome for themselves, given the choices of others. For example, imagine two companies deciding on prices for their products. If Company A sets its price and Company B sets its price in a way that neither can increase their profit by changing their price, they are in a Nash Equilibrium. In this situation, both companies are satisfied with their decisions, and any change would lead to a worse result for at least one of them.
Detailed Explanation
In a Nash Equilibrium, each player picks the best choice they can, knowing what others will do. Other options are incorrect because This suggests a player can always improve their score alone; This implies players work together for the best result.
Key Concepts
Non-Cooperative Games
Topic
Nash Equilibrium Explained
Difficulty
easy level question
Cognitive Level
understand
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