Question

Neither lorenzo nor neha has an incentive to further increase output, nor does either have an incentive to decrease output. this outcome is an example of

Answer 1

The fact that both Lorenzo and Neha have no incentive to further increase output or to decrease it is an example of NASH EQUILIBRIUM. The Nash Equilibrium is a solution concept of game theory where in the optimal outcome of a game, none of the players has an incentive to diverge from his chosen strategy having considered an opponent's choice.