Nash Equilibrium - Essay Example

Nash equilibrium has its implications both positive and negative. Positively, each player has the advantage of getting the expected payoff given what the opponent plays. Negatively, this strategy is not applicable in all cases. This is because there can be pure strategy normative expectations equilibria which are not Nash equilibria. The prisoner’s dilemma is an example of such a case scenario (Julian & Wolfgang, 2000).Nash equilibrium may not be Nash equilibrium at all in the event that one would like to have a little bit of extra credit.

This is based on the fact that it places one in compromising scenarios in which it leaves the player with no option other than not opting for not being part of the whole process. In a bar, the goods and services on sale are not returnable and so once consumed it is as good as gone. This will constantly leave the owner of the bar at a loss since there is no positive payoff in the sense that he will always stand a chance of losing in all the possible outcomes (Julian & Wolfgang, 2000).