Which of the following best describes a Nash equilibrium? An outcome from which one or both competitors can improve their position by adopting an alternative strategy. The unstable outcome of a repeated game. An outcome that is stable only because of credible threats. An outcome that both competitors see as optimal, given the strategy of their rival.

Question

Jimmuy

Business

17 October, 11:57

Which of the following best describes a Nash equilibrium? An outcome from which one or both competitors can improve their position by adopting an alternative strategy. The unstable outcome of a repeated game. An outcome that is stable only because of credible threats. An outcome that both competitors see as optimal, given the strategy of their rival.

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Nia Cunningham · Answer 1

The question is reconstructed below:

Which of the following best describes a Nash equilibrium?

A. An outcome from which one or both competitors can improve their position by adopting an alternative strategy.

B. The unstable outcome of a repeated game.

C. An outcome that is stable only because of credible threats.

D. An outcome which both competitors see as optimal, given the strategy of their rival.

Answer:

D. An outcome which both competitors see as optimal, given the strategy of their rival.

Explanation:

Although Nash equilibrium is a game theory, it has been widely applied in economics. It states that a competitor can achieve his desired outcome by sticking to his original strategy. Both competitors' strategies are optimal when considering the decisions of each other.