Definition
Plain language
A situation where nobody can do better by changing their own choice alone.
As stated in the literature
A strategy profile from which no single player has a profitable unilateral deviation; a frozen or persistent population state is not necessarily an equilibrium.
Also called: equilibria
Why it matters: It is the standard for judging whether a group of agents has genuinely settled on a stable arrangement, as opposed to merely getting stuck in a pattern nobody is happy with.
For example, if two shops on a street each hold steady prices because cutting prices would lose money and raising them would lose customers, that price pair is an equilibrium.
Heard on the show
“One small contaminator unravels the cooperative equilibrium for the whole group.”Episode 018 — Language Models Compute the Rational Move, Then Override It