nash equilibrium

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Word: Nash Equilibrium

Part of Speech: Noun

Definition: In simple terms, a Nash Equilibrium is a situation in a game or a decision-making scenario where each player (or participant) has chosen a strategy, and no player can benefit by changing their strategy while the other players keep theirs the same. This creates a stable state where everyone is satisfied with their choices.

Usage Instructions:

• The term is mainly used in the context of game theory, which studies how people make decisions in competitive situations.
• You might encounter this term in economics, political science, and social sciences when discussing strategies among individuals or groups.

Example:

Imagine two companies, A and B, deciding whether to lower their prices. If both companies choose not to change their prices, this could be a Nash Equilibrium. If Company A decides to lower its price while Company B keeps its price the same, Company A might gain more customers. However, if Company B also lowers its price in response, they might return to the original situation. Therefore, if both companies stick to their original prices, neither benefits from changing their strategy.

Advanced Usage:

In advanced discussions, Nash Equilibrium can be applied to various fields, such as: - Economics: Analyzing market strategies. - Biology: Understanding animal behaviors in competitive environments. - Political Science: Evaluating strategies in voting or conflict situations.

Word Variants:

• Nash Equilibria (plural): Refers to multiple stable states in different scenarios.
• Nash (adjective): Pertaining to John Nash, the mathematician who developed this concept.

Different Meanings:

While "Nash Equilibrium" specifically refers to a concept in game theory, the word "equilibrium" alone can mean a state of balance in different contexts, such as in physics (balance of forces) or chemistry (balance of reactions).

Synonyms:

• Stable strategy
• Optimal strategy (in some contexts)

Related Terms:

• Game Theory: The study of strategic interactions between players.
• Dominant Strategy: A strategy that is best for a player regardless of what others do.

Idioms and Phrasal Verbs:

There are no specific idioms or phrasal verbs directly related to "Nash Equilibrium," but understanding the concept of "strategizing" or "playing your cards right" can be useful in discussions about decision-making.

Academic

Noun

1. (game theory) a stable state of a system that involves several interacting participants in which no participant can gain by a change of strategy as long as all the other participants remain unchanged

Synonyms

• nash equilibrium