A Beautiful Mind

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In duopoly, and oligopoly in general, the process that leads to equilibrium may take on a special form referred to as the Nash equilibrium, named for mathematician John Nash, who was profiled in the film, A Beautiful Mind. The Nash equilibrium occurs when an economic decision-maker has nothing to gain by changing its own strategy without collusion. The film won the Academy Award for best picture in 2001 and it chronicles the life of John Nash who is noted for his pioneering work on general equilibrium theory. This scene is a great way to discuss self-interest and contrast it with the social optimum. Nash’s work has augmented Adam Smith’s “invisible hand” theory by extending how self-interest is modeled. This is must viewing even though the scene itself contains flawed economics.