If you have ever been inside the food court of a shopping mall or any avenue, you will surely have noticed something curious: fast food chains such as McDonald's, Burger King, Mustard or KFC, are usually next to each other. At first glance, this seems contradictory, since they are direct competitors. So why are they located so close together? The answer lies in a key concept of game theory: the Nash equilibrium.
To understand it better, let's place ourselves on the Buenos Aires waterfront with two choripan vendors, Germán and Lucas, who are the only ones offering this product on the site. Initially, they set up their stalls at opposite ends of the waterfront. This allows them to attract customers from their respective areas, but leaves a pool of potential customers in the middle untapped.

Realizing this situation, Lucas decides to move his stall more towards the center to capture those "unattended" customers. So when Germán sees what his competitor has done, he also decides to move his stall to the center the next day.

This process continues until both salespeople position their stalls at such a point that neither has any incentive to move, since any change of position would cause them to lose customers. This situation is known as a Nash equilibrium, where both players (in this case, German and Lucas) have reached a point where, given the position of the other, neither can improve their situation by changing strategy (i.e. location).
The same principle applies to large fast food chains. When they decide to open a new branch, one of the main considerations is the location of their competitors. In the end, both stand to benefit by attracting more customers, and neither has an incentive to deviate, since any change in their location would cause them to lose business opportunities.
Therefore, the next time you see a McDonald's next to a Burger King, remember that this is not a coincidence, but the result of a strategy based on Nash equilibrium, where both competitors have reached the best possible position, given the location of the other, and neither of them has any reason to change.
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