Nash equilibrium reconsidered and an option for maximin

In this paper we will discuss some peculiarities of Nash equilibrium which are at odds with its standard applications: (a) the underlying dynamic interpretation, (b) the incentive independency if equilibria are mixed, and (c) the unprofitability if equilibrium and maximin are mixed and the game is 2-by-2. Maximin is proposed as an alternative solution concept in relevant situations.Institute of Economics, University of Hamburg, Von-Melle-Park 5, D-2000 Hamburg 13, Germany. This is a substantially revised version of the paper Anti-Nash and an Option for Maximin (Institute of Economics, University of Aarhus, Memo 1989-16), which the author presented at the Fourth Annual Congress of the European Economic Association, Augsburg, September 2–4, 1989.