Monday 29 October 2012

Nash Equilibrium

The Nash Equilibrium demonstrates the most probable situation involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players without communication. To put simply, it just meant that there is an equilibrium (most probable) decision where people will fall into using the every man for himself concept.

Sadly, often the equilibrium does not portray a win-win situation for all players involved. Usually any particular player would not obtain the highest gains in this situation. If the players collaborate, they would instead obtain higher gains by collaborating not to go against each other for instance.

However, this is not utopia. If only players could collaborate and stick to their promise so they achieve a better equilibrium and not go against each other to switch strategy for personal gains. There will be players who will go against this collaboration which is a sad part of humanity, therefore the first equilibrium of every man for himself will exist.

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