Asked by Chloe Myers on Apr 26, 2024
Verified
Which of the following best describes a Nash equilibrium?
A) An outcome from which one or both competitors can improve their position by adopting an alternative strategy.
B) The unstable outcome of a repeated game.
C) An outcome that is stable only because of credible threats.
D) An outcome that both competitors see as optimal,given the strategy of their rival.
Nash Equilibrium
A concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged, indicating an optimal strategy set for all players.
- Detail the theoretical framework of game theory and its applicability to oligopoly market conditions.
- Understand the concept of the Nash equilibrium and its role in game theory.
Verified Answer
OP
Osmey PardiasApr 28, 2024
Final Answer :
D
Explanation :
A Nash equilibrium is a situation in which both competitors have chosen their best strategies given the strategies of their rival. It is a self-reinforcing outcome because neither competitor has an incentive to change their strategy if the other competitor's strategy remains the same.
Learning Objectives
- Detail the theoretical framework of game theory and its applicability to oligopoly market conditions.
- Understand the concept of the Nash equilibrium and its role in game theory.