Chapter 65, Problem 3MCQ

To determine

To choose: The option that best describes the situation when each player selects the action that maximizes payoff, given the actions of others, and ignores the consequences of their actions on the payoffs received by others.

Answer to Problem 3MCQ

Correct option is C, i.e., Nash equilibrium.

Explanation of Solution

Nash equilibrium states that each player in a game selects an action that will maximize the payoff, given the actions of other players in the game. This is also known as non-cooperative equilibrium.

Therefore, the correct option is C; Nash equilibrium.