The Nash Equilibrium…

This is really him, he looks kind like Russel Crowe in his younger years.

Last night I was up late trying to figure out ways to make myself not be broke (plus I had way too much Mtn. Dew) and in studying what I did wrong at my last company so I could improve on my contributions at the next project. Anyway, I came across the Nash Equilibrium, a concept developed by John Forbes Nash, yeah I think it’s the same guy Russel Crow played in a Beautiful Mind.

Here it is basically…

“A Nash Equilibrium is reached among a group of “players” (or whatever) when no player can benefit from changing strategies if every other player sticks to their current strategy.”

In the article I was reading it was referencing this in terms of creating your board of directors when your formulating a company. Specifically in regards to dealing with investors and keep the formation of the board fair.

Something that has really hit home for me is the checks and balances that are needed, and how much the Nash EQ is what I should be striving for.

I never really understood how you could create something and be the “CEO” and then have that taken away from you. Now I know…corporations came up with an “Owners” classification system so that they could fairly measure who owns how much of what % of a given investment. Often before this came into place, people of power and birthright would bully other people out of ownership, those common owners would have no legal standing in which to fight back.

Of course this whole process has now been mystified and told to the general public that it’s “complex” and “you need a degree, from Harvard” to understand.

Elements within the structure can be complex, but guess what. The internet doesn’t care. It’s billions of peoples knowledge at your fingertips and you can understand it. It’s actually straightforward, and the Nash Eq while a complex mathmatical representation is hard for me. The example given is not.

Conclusion:

….when everyone on earth has access to the data signal at all times, information…all information will be universal. Then the Nash Equilibrium will apply to all people: in that, now one group of people can’t benefit from changing their strategy when everyone has the same information and is making unified decisions that adopt a unified strategy (ie the same strategy).

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