A Nash equilibrium is defined as the outcome that:
A) results in equal payoffs to both players.
B) is unique and invariant to the strategy chosen by the other.
C) maximizes the sum of the players' payoffs.
D) results when both players lose by deviating from the equilibrium play.
E) maximizes each player's payoff against the strategy chosen by the other.

Question

Quizplus · Accepted Answer

A Nash equilibrium is a situation where each player's strategy is the best response to the other player's strategy. In other words, no player can improve their payoff by unilaterally changing their strategy. Therefore, a Nash equilibrium maximizes each player's payoff against the strategy chosen by the other. None of the other options necessarily result in a Nash equilibrium.

A Nash Equilibrium Is Defined as the Outcome That