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.

Trembling Hand Perfect Equilibrium
In game theory, an equilibrium state that takes into consideration ... 
ZeroSum Game
A situation in which one personâ€™s gain is equivalent to anotherâ€™s ... 
General Equilibrium Theory
General equilibrium theory studies supply and demand fundamentals ... 
Competitive Equilibriums
An equilibrium condition where the interaction of profitmaximizing ... 
Radner Equilibrium
A theory suggesting that if economic decision makers have unlimited ... 
Paradox of Rationality
The irony that rational decisionmaking in game theory situations ...

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. 
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. 
Economics
5 Nobel PrizeWinning Economic Theories You Should Know About
Here are 5 prizewinning economic theories that youâ€™ll want to be familiar with. 
Personal Finance
Pro Sports Unions: Do They Help Or Hurt?
Unions have helped athletes land multimillion dollar contracts, but how do they affect the fans? 
Personal Finance
Are Big Budget Video Games Dead?
More people seem to be gaming on tablets and smartphones over consoles, which means this could be the end of big budget console games. 
Savings
The Money Behind The NFL Players' Lawsuit
In this article, we look at the NFL players' antitrust lawsuit, and the possible financial ramifications. 
Stock Analysis
5 Video Game Stocks to Power up your Portfolio
Learn about some of the biggest players in this multibillion dollar industry! 
Personal Finance
The BestSelling Video Games Of All Time
Video games are selling better than ever before, but how can investors get in on the action? 
Retirement
Signs It's Time To Retire
Your house is paid off and you're ready to travel and pursue other interests, but can you do it? 
Stock Analysis
Get Your Game On (ERTS)
Game maker Electronic Arts should benefit from a pickup in PS3 game console sales later this year.

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 >> 
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 >> 
Do production possibility frontiers have multiple possible equilibria?
Explore when production possibility frontiers can have multiple equilibria. Learn how backwardbending curves such as labor ... Read Answer >> 
How is standard deviation used to determine risk?
Understand the basics of calculation and interpretation of standard deviation and how it is used to measure risk in the investment ... Read Answer >> 
What does standard deviation measure in a portfolio?
Dig deeper into the investment uses of, and mathematical principles behind, standard deviation as a measurement of portfolio ... Read Answer >>