Nash equilibrium

A definition of equilibrium, devised by John Nash, an American mathematician, in the late 1940s, that has become one of the most powerful ideas in economics. Every agent chooses their optimal strategy, taking the strategies of everyone else as given. Nash equilibrium is thus the best everyone can do, but need not be the best for society. The idea won Nash a share of the Nobel prize for economics in 1994. For more, see our Schools Brief.