A Program for Finding Nash Equilibria

Volume 1, Issue 4
Spring 1991

Game theory analyzes decisions in conflict situations and identifies what actions rational players might be expected to take when each player is aware of the opposing player's options. Equilibria are stable solutions for which neither player would change plans given knowledge of the other's plan. A Nash equilibrium is one in which each player's response is the best response to the play of the other player. Examples from the Prisoner's Dilemma and the Battle of the Sexes games illustrate the use of minimax, dominant and Nash equilibrium strategies in two-person simultaneous-play games. The package Nash.m, used to solve the games, and its performance characteristics are discussed.