Quick Definition

Nash Equilibrium is a concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged.

Formula

Examples

• 1Two companies deciding on pricing strategies where neither can gain by solely changing their own prices.
• 2Negotiations between unions and management where neither side can improve their position without changing the agreement.
• 3A bidding war in an auction where each bidder has reached a point where increasing their bid does not guarantee a win.
• 4Market competition where companies reach a stable state in pricing, product offerings, or marketing strategies that no single company can benefit from altering unilaterally.

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