Be the first to watch our newest videos via Investopedia Video: http://www.investopedia.com/video/ Game theory in general looks at how individuals or groups make choices that will, in turn, affect other parties' choices. Nash Equilibrium refers to a condition in which every participant has optimized its outcome, based on the other players' expected decision. In summary, game theorists look at decisions, not in isolation, but as part of a system of interactions. For more on Game Theory and Nash Equilibrium, check out; Game Theory: Beyond The Basics http://www.investopedia.com/articles/financial-theory/09/game-theory-beyond-basics.asp 5 Nobel Prize-Winning Economic Theories You Should Know About http://www.investopedia.com/articles/economics/12/nobel-prize-winning-economic-theories.asp Explaining The World Through Macroeconomic Analysis http://www.investopedia.com/articles/02/120402.asp