Erika B. answered • 12/16/19

State University Instructor Specializing in Econ & Stats

A Nash Equilibrium is Pareto Optimal if *neither player can be made better off without making the other worse off. *

For example, if the Nash Equilibrium of a game involves payoffs (0,0) but there is another node with payoffs (1,-20), then (0,0) is Pareto Optimal, because even though I may improve my own outcome by getting 1 instead of 0, you then must lose utility.

Lenny D.

12/16/19