Question

A Nash equilibrium occurs when: each player receives the same final payoff. each player believes it is doing the best it can given the behavior of rivals. there is no dominant strategy for any player. payoffs are independent of the actions taken by rivals.

Answer 1

Option B, “Each player believes it is doing the best it can given the behavior of rivals” , is the right answer.

Step-by-step explanation:

Option B is correct because Nash equilibrium is the situation where each player is earning the highest payoff and there is no intention to change their optimum strategy. However, if any player changes their strategy then they will get the lower payoff. Therefore, in the Nash equilibrium, each player knows his best moves and also knows the behavior of their competitor.