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Nash Equilibrium in Non-Cooperative Games

#economics #mathematics #strategy #equilibrium

Explain the concept of stability points in strategic interactions.

Define the Nash Equilibrium in the context of non-cooperative game theory. Provide a theoretical explanation of why rational actors often settle into these equilibrium states, even if the outcome is not globally optimal (e.g., the Prisoner's Dilemma). Discuss its limitations in predicting real-world behavior.