<p>Nash Equilibrium (N.E) is a general solution concept in Game Theory. N.E is a state of game when any player does not want to deviate from the strategy she is playing because she cannot do so profitably. So, no players wants to deviate from the strategy that they are playing given that others don't change their strategy. Thus, it is a mutually enforcing kind of strategy profile. </p>

<p>'Pareto optimality' is an efficiency concept. So no state will be Pareto Optimal if, at least one of the players can get more payoff without decreasing the payoff of any other player. There are many many examples of Nash Equilibria which are not pareto optimal. The most famous example could be the N.E in prisoner's dilemma. </p>

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2016-12-06T18:00:57.813Z
2016-12-06T18:00:57.813Z
Sub-Optimal
<p>What is the difference between Nash equilibrium and Pareto Efficiency. Can you give me an example where Nash equilibrium is not Pareto Optimal?</p>

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2022-05-05T15:03:51.030Z
You can refer to this answer: https://qr.ae/pvsIqj
Amit
<game-theory>
Nash Equilibrium and Pareto efficiency
HARSHA VARDHAN
# Nash Equilibrium and Pareto efficiency

(Asked by: username_0 on 2016-12-06)

What is the difference between Nash equilibrium and Pareto Efficiency. Can you give me an example where Nash equilibrium is not Pareto Optimal?

**Tags:** game-theory
> **Comments:**
> **username_1**: You can refer to this answer: https://qr.ae/pvsIqj  

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## 1 answers

### Answer by username_2 on 2016-12-06. Score: 16 | Accepted answer

Nash Equilibrium (N.E) is a general solution concept in Game Theory. N.E is a state of game when any player does not want to deviate from the strategy she is playing because she cannot do so profitably. So, no players wants to deviate from the strategy that they are playing given that others don't change their strategy. Thus, it is a mutually enforcing kind of strategy profile.

'Pareto optimality' is an efficiency concept. So no state will be Pareto Optimal if, at least one of the players can get more payoff without decreasing the payoff of any other player. There are many many examples of Nash Equilibria which are not pareto optimal. The most famous example could be the N.E in prisoner's dilemma.


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