Nash Equilibrium In Game Theory

1655 Words7 Pages
ash equilibrium named after the person (John Forbes Nash) who proposed it. Nash Equilibrium gives a stable condition of strategies in game theory. If each player is playing with its strategy and the combination in which no player can get additional benefit by changing its strategy while other players’ strategies remain same. The combination of these strategies and corresponding payoffs are Nash equilibrium.
The Nash equilibrium in the payoff conditions of table 2 is determined and different combinations in this regard are shown in table 3.

In table 3 it is visible that the best strategy for SC1 is D, best strategy for SC2 is also D and best strategy for MC is also D. The outcome is similar as in case of Prisoner’s Dilemma. The best strategy for each player is Don’t cooperate, irrespective to the strategies of other players. So if all the players go for “D” then no one will get any payoff as shown in table3. On the other side the best option for all players is when all of them cooperate. If everyone goes to play safe then all of them will play “D”. If there is situation that every one is sure