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Nash Equilibrium is based on its creator’s name called Jon Nash who was an American mathematician. It is considered to be one of the most important concepts of game theory. It attempts to determine the logic of the player’s actions which are taken to secure the best outcomes for the result.
Nash Equilibrium is based on the optimum outcome of a game and where there is no incentive to derive from the initial strategy of playing. It is the concept of the whole game theory where the players have to base their moves depending on the opponent’s choices and behaviour.
It is the solution to any game where two or more players have any strategy to formulate the whole outcome. There are no incentives to gain depending on the players and their opponent’s choices and moves. Each player is considered to be optimal while considering their individual moves. Every player is set to win because they get the outcome they desire for.
Economists are subjected to predict the future with the help of the past. One of the most important tools they can use to dispose of their thoughts is with the use of the theory of Nash Equilibrium. Here are some of the reasons why this theory of Nash Equilibrium matters the most.
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