What is the 'Nash Equilibrium'
The Nash equilibrium is a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from his or her chosen strategy after considering an opponent's choice. Overall, an individual can receive no incremental benefit from changing actions, assuming other players remain constant in their strategies. A game may have multiple Nash equilibria or none at all.
BREAKING DOWN 'Nash Equilibrium'
This concept is named after its inventor John Nash and is incorporated in multiple disciplines (ranging from behavioral ecology to economics). If you want to test for a Nash equilibrium, simply reveal each person's strategy to all players. The Nash equilibrium exists if no players change their strategy, despite knowing the actions of their opponents. For example, let's examine a game between Tom and Sam. In this simple game both players can choose: A) received $1, or B) lose $1
Logically, both players choose strategy A and receive a payoff of $1. If you revealed Sam's strategy to Tom and vice versa, you will see that no player deviates from the original choice. Knowing the other player's move means little, and doesn't change behavior. The outcome A,A represents a Nash equilibrium.

John F. Nash Jr.
An American mathematician who won the 1994 Nobel Memorial Prize ... 
Trembling Hand Perfect Equilibrium
In game theory, an equilibrium state that takes into consideration ... 
ZeroSum Game
A situation in which one person’s gain is equivalent to another’s ... 
Reinhard Selten
An economist and mathematician who won the 1994 Nobel Memorial ... 
Centipede Game
An extensiveform game in game theory in which two players alternately ... 
General Equilibrium Theory
General equilibrium theory studies supply and demand fundamentals ...

Economics
The Nash Equilibrium
Nash Equilibrium is a key concept of game theory, which helps explain how people and groups approach complex decisions. Named after renowned mathematician John Nash, the idea of Nash Equilibrium ... 
Options & Futures
Game Theory: Beyond The Basics
Take your game theory knowledge to the next level by learning about simultaneous games and the Nash Equilibrium. 
Fundamental Analysis
The Basics Of Game Theory
Break down and examine the potential consequences of economic/financial scenarios. 
Economics
Advanced Game Theory Strategies For DecisionMaking
The importance of game theory to modern analysis and decisionmaking can be gauged by the fact that since 1970, as many as 12 leading economists and scientists have been awarded the Nobel Prize ... 
Investing Basics
Can Games Make You A Better Investor?
As investing is a great example of an activity that draws on a wide range of mental and emotional skills, it is worth exploring how to improve this skill set. 
Investing
How To Game The Video Game Industry
Investopedia explores the business, current developments, future trends of video games industry and how the overall industry makes money. 
Term
What Is Equilibrium?
Equilibrium is a state of balanced supply and demand. 
Investing
How The Video Game Industry Is Changing
Video game creation has become increasingly complex, and the cost of creating a game to run on one of the major consoles has risen with this greater complexity. 
Term
What Is Economic Equilibrium?
Economic equilibrium occurs when market supply is equal to market demand. 
Investing
You Love Video Games, But Do You Know How The Industry Works?
Traditionally, the video game industry was limited to consoles, such as Microsoft’s (MSFT) Xbox and Sony’s (SNE) PlayStation, but it now includes PC games, mobile games and, in the near future, ...

What is the difference between a dominant strategy solution and a Nash equilibrium ...
Dive into game theory and the Nash equilibrium, and learn why the Nash equilibrium assumptions about information are less ... Read Answer >> 
What does the Nash equilibrium predict?
Learn more about the famous Nash equilibrium, which is the revolutionary concept in game theory about the economics of human ... Read Answer >> 
How is game theory related to the Nash equilibrium?
Learn how Nash's equilibrium is an important concept in game theory, and understand how it applies to the common prisoner's ... Read Answer >> 
Why is Game Theory useful in business?
Game theory was once hailed as a revolutionary interdisciplinary phenomenon bringing together psychology, mathematics, philosophy ... Read Answer >> 
What is general equilibrium theory in macroeconomics?
Achieving equilibrium of prices in a single or multimarket setting involves a bidding process that is informed precisely ... Read Answer >> 
How has the popularity of online gaming affected the internet sector?
Discover how the increasingly popularity of online gaming has directly affected and fundamentally transformed the Internet ... Read Answer >>