Build a 2×2 payoff matrix, identify players, strategies, and strategy profiles — then find the Nash equilibrium step by step using best replies.
The decision-makers. Here: Individual A (row) and Individual B (column).
Actions available to each player: Refrain or Steal.
An ordered pair — one strategy per player, e.g. (Steal, Refrain).
The utility each player receives for a given strategy profile. A's payoff is listed first.
The strategy giving the highest payoff given the other player's choice. Marked with ★A or ★B.
A profile where both players are playing a best reply. No one wants to deviate.
| Individual B | |||
|---|---|---|---|
| Refrain | Steal | ||
| Individual A | Refrain | ||
| Steal | |||
Source
Hindmoor, A., & Taylor, B. (2015). Rational Choice (2nd ed.). Palgrave Macmillan.
Chapter 2: James M. Buchanan and Constitutional Political Economy, pp. 20–47.