Cooperative Nash Equilibrium

A Cooperative Nash Equilibrium occurs when multiple parties, acting in their mutual best interest, choose to cooperate rather than compete, and no one can improve their outcome by changing their strategy unilaterally. In this state, all parties find an arrangement that benefits everyone involved, and everyone sticks to their plan because deviating wouldn't lead to better results. Think of it like a group of businesses collaborating to set prices; once they agree on fair prices, no single business gains by breaking the agreement on their own. This balance ensures stability and optimal collective outcomes.