Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
In Nash Equilibrium, players have no incentive to unilaterally change their strategy.
B
Nash Equilibrium guarantees that all players are maximizing their payoffs simultaneously.
C
A player can improve their outcome by changing their strategy only if other players change theirs.
D
Nash Equilibrium can exist even when players have dominant strategies.
E
The presence of Nash Equilibrium ensures that all players will always receive the highest possible payoff.
Understanding the Answer
Let's break down why this is correct
Answer
Nash Equilibrium is a situation in game theory where no player can benefit by changing their strategy if the other players keep their strategies the same. This means that each player's choice is optimal, given what the others are doing. For example, imagine two businesses deciding on their prices; if both choose a price where neither can increase their profit by changing their price alone, they are in Nash Equilibrium. This concept shows how individuals or groups can reach a stable outcome, even if it is not the best possible for everyone involved. In summary, at Nash Equilibrium, players are making the best decisions they can, considering the choices of others.
Detailed Explanation
Other options are incorrect because Some think players can change their strategy without affecting others; People might believe that Nash Equilibrium means everyone is winning at the same time.
Key Concepts
Nash Equilibrium
Game Theory
Competitive Strategy
Topic
Nash Equilibrium in Game Theory
Difficulty
hard level question
Cognitive Level
understand
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