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EconomicsNash Equilibrium
A state where no player can gain by changing strategy alone.
In game theory, a Nash equilibrium is a set of strategies where each player's choice is optimal given the others'. The Prisoner's Dilemma shows equilibria can be collectively bad. It models oligopoly pricing, bidding, and market competition.
Formula / theory
No player i can improve by deviating: uᵢ(sᵢ*, s₋ᵢ*) ≥ uᵢ(sᵢ, s₋ᵢ*) ∀ sᵢ