nash equilibrium article
You may have seen the movie “A Beautiful Mind” and heard about John Nash, the Princeton mathematician who won the Nobel prize in economics for his work on mathematically describing what has now been termed “Nash Equilibrium,” which can be described as (excerpted from Wikipedia):
a solution concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his or her own strategy (i.e., by changing unilaterally). If each player has chosen a strategy and no player can benefit by changing his or her strategy while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute a Nash equilibrium. In other words, to be in a Nash equilibrium, each player must answer negatively to the question: “Knowing the strategies of the other players, and treating the strategies of the other players as set in stone, can I benefit by changing my strategy?”
Stated simply, Amy and Bill are in Nash equilibrium if Amy is making the best decision she can, taking into account Bill’s decision, and Bill is making the best decision he can, taking into account Amy’s decision. Likewise, many players are in Nash equilibrium if each one is making the best decision that they can, taking into account the decisions of the others.
If you have ever been curious to check it out, here’s the original paper by John Nash that described this Nobel-prize winning concept:
