Nash equilibrium
A Nash equilibrium is a set of strategies in which no player can do better by changing their own strategy while the others keep theirs. It's the stable outcome of a game.
Named after John Nash, whose 1950 proof earned the 1994 Nobel prize. A Nash equilibrium isn't always the best outcome for everyone, as the prisoner's dilemma shows.
Related terms
- Game theory: Game theory is the study of strategic decisions, where each player's best choice depends on what the others do.
- Oligopoly: An oligopoly is a market dominated by a few large firms, each of which must consider how the others will react.
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