The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Nash Equilibrium

  • David M. Kreps
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_963

Abstract

The concept of a Nash equilibrium plays a central role in noncooperative game theory. Due in its current formalization to John Nash (1950, 1951), it goes back at least to Cournot (1838). This entry begins with the formal definition of a Nash equilibrium and with some of the mathematical properties of equilibria. Then we ask: To what question is ‘Nash equilibrium’ the answer? The answer that we suggest motivates further questions of equilibrium selection, which we consider in two veins: the informal notions, such as Schelling’s (1960) focal points; and the formal theories for refining or perfecting Nash equilibria, due largely to Selten (1965, 1975). We conclude with a brief discussion of two related issues: Harsanyi’s (1967–8) notion of a game of incomplete information and Aumann’s (1973) correlated equilibria.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • David M. Kreps
    • 1
  1. 1.