Glossary of game theory terms.

Best Reply Dynamic

The best reply dynamic is often termed the Cournot adjustment model or Cournot learning after Augustin Cournot who first proposed it in the context of a duopoly model. Each of two players select strategies sequentially. In each period, a firm selects the action that is its best response to the action chosen by the competing firm in the previous period. Cournot noted that this process converges to the Nash equilibrium in some duopoly games in which firms sequentially select output. The best reply dynamic can be seen as an extreme form of fictitious play in which each firm assumes that its competitor is using the same strategy in every period which is equivalent to the one most recently used.

updated: 15 August 2005