12.2 Nash Equilibrium

A Nash equilibrium occurs if ________.

each player chooses strategies that are mutual best responses.

A Nash equilibrium is:

reached when each player chooses the best strategy for himself, given the other strategies chosen by the other players in the group.

A situation in which each firm chooses the best strategy given the strategies chosen by other firms is called a:

Nash equilibrium.

A dominant strategy is:

a strategy that is the best for a firm no matter what strategies other firms use.

Which of the following is true of a Nash equilibrium? No player can improve his payoff by changing his strategy once in Nash equilibrium. A game can have only one Nash equilibrium. A Nash equilibrium occurs if each player earns a zero payoff irrespective of the strategy he chooses. A Nash equilibrium cannot occur if each player is aware of the strategies of other players.

No player can improve his payoff by changing his strategy once in Nash equilibrium.