Nash Equilibrium

The key idea is the Nash equilibrium: a set of choices where no single player can do better by changing their move while everyone else stays put. Once you are there, you have no reason to budge.

Picture two gas stations on the same road. If both charge the same price, neither one gains by raising it (customers leave) or by cutting it (a price war shrinks both their profits). So the matching price holds. That stuck-but-stable point is the equilibrium.