Changes

In [[game theory]] a '''Nash equilibrium''' is a set of decisions by the players such that they maximize there own payoff, taking the other player's strategies as given. The "equilibrium" is the set of decisions such that no individual participant, acting alone, can gain anything by altering his decision. The equilibrium can be determined by examining each players "best responses". Each player will have a set of actions that yield him the best possible payoff for each of the potential actions of other players. If each player is playing their best response to the other players' actions, (all the actions are best responses to each other) it is an equlibrium. This is a similar concept to a chemical equilibrium or a steady-state solution in physics, whereby each individual maximizes his own gain based on the actions of other participants.

In [[game theory]] a '''Nash equilibrium''' is a set of decisions by the players such that they maximize there own payoff, taking the other player's strategies as given. The "equilibrium" is the set of decisions such that no individual participant, acting alone, can gain anything by altering his decision. The equilibrium can be determined by examining each players "best responses." Each player will have a set of actions that yield him the best possible payoff for each of the potential actions of other players. If each player is playing their best response to the other players' actions, (all the actions are best responses to each other) it is an equlibrium. This is a similar concept to a chemical equilibrium or a steady-state solution in physics, whereby each individual maximizes his own gain based on the actions of other participants.

The Nash equilibrium is named after John Nash, a mathematician.  It is a topic in [[game theory]], and its significance was recognized by award of the [[Nobel Prize]] in Economics.

The Nash equilibrium is named after [[John Nash]], a mathematician.  It is a topic in [[game theory]], and its significance was recognized by award of the [[Nobel Prize]] in Economics.

The Nash equilibrium is a modification to the strict self-interest predicted by [[Adam Smith]], because the Nash equilibrium takes into account the influence of competitors' decisions on the primary decision-maker. It also provides counter-examples to the idea that individuals working in their own self-interest work in the best interest of society as a whole.

The Nash equilibrium is a modification to the strict self-interest predicted by [[Adam Smith]], because the Nash equilibrium takes into account the influence of competitors' decisions on the primary decision-maker. It also provides counter-examples to the idea that individuals working in their own self-interest work in the best interest of society as a whole.