Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Economics
Nash Equilibrium
A situation where no player can improve their outcome by changing strategy if the other players keep theirs unchanged.
Named after John Nash (the mathematician from A Beautiful Mind). Many real-world markets settle into Nash equilibria. It helps predict stable outcomes in competition, auctions, and negotiations.
It's the point in a staring contest where neither person blinks because they know the other won't either.
Real world: Two gas stations on the same road both charge the same price. If one raises its price, it loses all customers. Neither can change price without hurting itself — that's a Nash equilibrium.
💡 Nash equilibrium is where everyone is doing the best they can given what everyone else is doing.