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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 their 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 used to describe situations when several people or companies (usually known as players) have benefits (usually known as payoffs) that depend on the decisions of other players. The Nash equilibrium predicts the choices players will make to maximize their payoff.

The Nash equilibrium is used to describe situations when several people or companies (usually known as players) have benefits (usually known as payoffs) that depend on the decisions of other players. The Nash equilibrium predicts the choices players will make to maximize their payoff.

In [[economics]], the Nash equilibrium describes pricing decisions by an [[oligopoly]].  The set of selling prices will be such that no seller can benefit by changing his price if the other sellers keep their prices unchanged.  If the cost structures are the same for each seller in an oligopoly, then the Nash equilibrium is where the price may equal the [[marginal cost]], or P=MC. Whether or not this is true depends on whether it is assumed that the sellers choose the price they want to sell at, market forces determine the quantity sold [Bertrand oligopoly) or if sellers choose the quantity to sell and find the price on the market (Cournot oligopoly).

In [[economics]], the Nash equilibrium describes pricing decisions by an [[oligopoly]].  The set of selling prices will be such that no seller can benefit by changing his price if the other sellers keep their prices unchanged.  If the cost structures are the same for each seller in an oligopoly, then the Nash equilibrium is where the price may equal the [[marginal cost]], or P=MC. Whether or not this is true depends on whether it is assumed that the sellers choose the price they want to sell at, market forces determine the quantity sold (Bertrand oligopoly) or if sellers choose the quantity to sell and find the price on the market (Cournot oligopoly).

==Nash equilibrium and intuition==

==Nash equilibrium and intuition==