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Nash Equilibrium

Nash Equilibrium is a fundamental concept in game theory, introduced by mathematician John Nash. It describes a situation in a strategic interaction where no player can unilaterally improve their outcome by changing their strategy, assuming the strategies of the other players remain unchanged. Key Features of Nash Equilibrium: Stability: At a Nash Equilibrium, all players are making the best decision they can, given the decisions of the others. No player has an incentive to deviate. Rationality: It assumes that players are rational and have complete knowledge of the game's structure and the strategies of other players. Mutual Best Response: Each player's strategy is the best response to the strategies chosen by all other players. Types of Nash Equilibria: Pure Strategy Nash Equilibrium: Each player chooses one specific strategy with certainty. Mixed Strategy Nash Equilibrium: Players randomize over strategies, assigning a probability to each one.
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   Author: Ruben Ispiryan


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