When there is an Equilibrium (or a Nash Equilibrium),we expect that:
A) once the firms get there,no one will change their strategy.
B) firms will tend to select a randomized strategy.
C) neither firm will care what it does.
D) this is always a dominated strategy.

Question

Quizplus · Accepted Answer

An equilibrium means that each firm is choosing the best strategy given the other firm's choice. Therefore, neither firm has an incentive to change their strategy, otherwise they would end up worse off. Therefore, we expect that once the firms reach an equilibrium, they will not change their strategy.

When There Is an Equilibrium (Or a Nash Equilibrium),we Expect