Changes

In [[game theory]], the '''Nash equilibrium''' (named after [[John Nash]]) is a state in which no participant would gain anything by only changing his own decision after learning of the other participants' decisions. The implied assumption is that no other participant will change his decision. A problem can have more than one Nash equilibrium.

The '''Nash equilibrium''' is the expected behavior by many participants faced with making similar decisions.  The "equilibrium" occurs when no participant would gain anything by only changing his own decision after learning of the other participants' decisions. The implied assumption is that no other participant will change his decision. A problem can have more than one Nash equilibrium.

 

 

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.

==Application==

==Application==

The Nash equlibrium is used to describe situations when several people or companies have benefits that depend on the decisions of rival. The Nash equilibrium predicts the choices those people or companies will make to maximize their individual benefits.

The Nash equilibrium is used to describe situations when several people or companies have benefits that depend on the decisions of rival. The Nash equilibrium predicts the choices those people or companies will make to maximize their individual benefits.

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 while 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 equals the [[marginal cost]], or P=MC.

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 while 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 equals the [[marginal cost]], or P=MC.