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What is a Nash equilibrium in a two player game?

  • A.The strategy that guarantees a win for the first player
  • B.The point at which both players have equal expected payoffs
  • C.A pair of strategies from which neither gains by deviating alone
  • D.The pair of strategies giving both of the players their highest payoff

Answer: C

At equilibrium each strategy is a best response to the other, so no unilateral change helps. In a zero sum game it coincides with the minimax value. It need not be the outcome both players would prefer, as the prisoner's dilemma shows, and it need not be a win or be symmetric. A solution concept defined by stability rather than by optimality is what game theory offers where a single objective does not exist.

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