What Is the Nash Equilibrium?

By Kristi Waterworth – Updated Apr 16, 2025 at 11:51 PM EST

Key Points

Nash equilibrium helps predict other investors' moves; no net gain by altering your long-term strategy.
A dominant strategy excels regardless of others' actions, aiding investment decisions.
Using game theory, investors gauge market dynamics and strategize on stock or bond investments.

When you're investing in the stock market, it's important to remember that you're not the only one doing so. You're always in a sea of other investors, and that can create a lot of difficult decisions. The Nash equilibrium can be a helpful concept for investors to understand.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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