Neither lorenzo nor neha has an incentive to further increase output, nor does either have an incentive to decrease output. this outcome is an example of
The fact that both Lorenzo and Neha have no incentive to
further increase output or to decrease it is an example of NASH EQUILIBRIUM. The
Nash Equilibrium is a solution concept of game theory where in the optimal
outcome of a game, none of the players has an incentive to diverge from his
chosen strategy having considered an opponent's choice.
