The Nash
Equilibrium
John F. Nash (1951) defined the
most widely-used equilibrium concept. A set
of strategies is
called a
Nash Equilibrium if,
holding the strategies of all other firms constant,
no firm can obtain a higher payoff (profit)
by choosing a different strategy. Thus, in a
Nash equilibrium, no firm wants to
change its strategy.
In the Cournot
& Stackelberg
models, firms'
strategies concern setting
quantities.
In the Bertrand
model, firms set
prices.
The Nash equilibrium concept is
useful when strategies include setting advertising,
or other variables in addition to output or
price.
Sources
:
Modern Industrial Organization, 2nd edition, Dennis .W. Carlton , Jeffrey .M. Peroloff, Addfison-Wesley, 1994
Economie Industrielle ( traduction de la 2ème édition par Fabrice Mazerolle), Dennis .W. Carlton , Jeffrey .M. Peroloff, de Boeck Université, 1998
Gaining and Soustaining Competitive Advantage, Jay. B. Barney, Addison-Wesley, 1997
Contemporary Strategic Analysis, Robert M. Grant, 3th edition, Blackwell, 1998
Strategic Management, Raphael Amit, Professor at Wharton University of Pennsylvania, US
Cours de Microéconomie,
Bernard Jaquier, Ecole Hôtelière
de Lausanne, 2003
Page publisher : Bernard Jaquier, Professor in Economics and Finance, Ecole Hôtelière de Lausanne, Switzerland, 2010
