# Nash Equilibrium

*Macro & Economy — Finicade finance glossary*

A Nash equilibrium is a set of strategies where nobody can do better by changing their own move alone. It is not necessarily the best outcome available — the prisoner's dilemma's equilibrium is worse for both players than cooperating. That gap between stable and good is exactly why bank runs, price wars and arms races persist: each participant is behaving rationally given everyone else.

**Also known as:** Nash, equilibrium strategy

**Related terms:** [Game Theory](https://finicade.com/glossary/game-theory), [Bank Run](https://finicade.com/glossary/bank-run), [Market Efficiency](https://finicade.com/glossary/market-efficiency), [Supply and Demand](https://finicade.com/glossary/supply-and-demand), [Moral Hazard](https://finicade.com/glossary/moral-hazard)

Source: https://finicade.com/glossary/nash-equilibrium