Nash Equilibrium is a fundamental concept in game theory where each player's strategy is optimal given the strategies of all other players, meaning no player can benefit by unilaterally changing their strategy. It is used to predict the outcome of strategic interactions in competitive environments, assuming that all players are rational and have complete knowledge of the game structure.

Nash Equilibrium

Game theory is a mathematical framework used for analyzing strategic interactions where the outcome for each participant depends on the actions of all involved. It provides insights into competitive and cooperative behaviors in economics, politics, and beyond, helping to predict and explain decision-making processes in complex scenarios.

game theory

Players' strategy

An optimal strategy is a decision-making plan that maximizes expected outcomes or minimizes potential losses in a given scenario, often under constraints. It requires analyzing all possible actions, outcomes, and probabilities to ensure the best possible result is achieved in competitive or uncertain environments.

Optimal Strategy

Unilateral change

Strategic interactions occur when the outcome for each participant depends not only on their own actions but also on the actions of others, requiring anticipation and adaptation to others' strategies. These interactions are central to game theory and are crucial in economics, political science, and any field where decision-making entities influence each other.

strategic interactions

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