Nash Equilibrium

 

If you’ve seen the movie “A Beautiful Mind,” you’ll probably recognize the name John Nash. He’s currently a professor at Princeton University who is best known for his contribution to Game Theory and various math-related fields.

I learned one of his best known theories called the Nash Equilibrium during a summer course at CTY in Nanjing. Nash Equilibrium is a keystone in Game Theory, a field of study that investigates various strategic situations from economics to worldwide politics. John Nash was awarded a Nobel Prize (which actually isnt the actual Nobel Prize but a prize given by the Bank of Sweden on economics that happens to have the word “Nobel” in its long name) for this concept and is, surprisingly, quite simple to understand.

It states that a Nash Equilibrium exists when none of the players in a game can better their outcome by changing their strategies alone. Basically it’s a situation where all the players are satisfied with their strategy. No player would want to change their strategy when they no they can’t make it better, right?

Now, something interesting about Nash Equilibrium and the nature of the players is that a Nash Equilibrium is not always the optimum situation for all the players. Many times players can co-ordinate to achieve a better outcome but ends up in a Nash Equilbrium, although it may not be the best option. How come? Well that’s what Game Theory explained to me when I was taking the course, and maybe I’ll be able to hold a short presentation in our school (since the MAT club expects me to hold one…) to explain just that.

Everyone’s inherently selfish and self-caring. That’s a hint…

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2 Responses to “Nash Equilibrium”

  1. Interesting. Sounds much like Prisoner’s Dilemma.

  2. Georgina Ed. Says:

    I seen this movie also at cty but in my pharmo/toxicology class.
    We focused on the main character’s mental problems.
    It’s interesting to hear about other aspects of the movie.

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