Finitely additive and epsilon Nash equilibria

We prove the existence of a mixed strategy Nash equilibrium in normal form games when the space of mixed strategies consists of finitely additive probability measures. It is then proved that from this result an existence result for epsilon equilibria with countably additive mixed strategies can be obtained. These results are applied to the classic Cournot game.     

Computation of equilibria and the price of anarchy in bottleneck congestion games

We study Nash and strong equilibria in weighted and unweighted bottleneck games. In such a game every (weighted) player chooses a subset of a given set of resources as her strategy. The cost of a resource depends on the total weight of players choosing it and the personal cost every player tries to minimize is the cost of the most expensive resource in her strategy, the bottleneck value. To derive efficient algorithms for finding equilibria in unweighted games, we generalize a transformation of a bottleneck game into a congestion game with exponential cost functions introduced by Caragiannis et al. (2005). For weighted routing games we show that Greedy methods give Nash equilibria in extension-parallel and series-parallel graphs. Furthermore, we show that the strong Price of Anarchy can be arbitrarily high for special cases and give tight bounds depending on the topology of the graph, the number and weights of the users and the degree of the polynomial latency functions. Additionally we investigate the existence of equilibria in generalized bottleneck games, where players aim to minimize not only the bottleneck value, but also the second most expensive resource in their strategy and so on.     

Non-cooperative stochastic dominance games

A non-cooperative stochastic dominance game is a non-cooperative game in which the only knowledge about the players' preferences and risk attitudes is presumed to be their preference orders on the set ofn-tuples of pure strategies. Stochastic dominance equilibria are defined in terms of mixed strategies for the players that are efficient in the stochastic dominance sense against the strategies of the other players. It is shown that the set of SD equilibria equals all Nash equilibria that can be obtained from combinations of utility functions that are consistent with the players' known preference orders. The latter part of the paper looks at antagonistic stochastic dominance games in which some combination of consistent utility functions is zero-sum over then-tuples of pure strategies.     

On Pareto equilibria in vector-valued extensive form games

In this paper we investigate the existence of Pareto equilibria in vector-valued extensive form games. In particular we show that every vector-valued extensive form game with perfect information has at least one subgame perfect Pareto equilibrium in pure strategies. If one tries to prove this and develop a vector-valued backward induction procedure in analogy to the real-valued one, one sees that different effects may occur which thus have to be taken into account: First, suppose the deciding player at a nonterminal node makes a choice such that the equilibrium payoff vector of the subgame he would enter is undominated under the equilibrium payoff vectors of the other subgames he might enter. Then this choice need not to lead to a Pareto equilibrium. Second, suppose at a nonterminal node a chance move may arise. The combination of the Pareto equilibria of the subgames to give a strategy combination of the entire game need not be a Pareto equilibrium of the entire game.     

Optimal strategic reasoning with McNaughton functions

The aim of the paper is to explore strategic reasoning in strategic games of two players with an uncountably infinite space of strategies the payoff of which is given by McNaughton functions—functions on the unit interval which are piecewise linear with integer coefficients. McNaughton functions are of a special interest for approximate reasoning as they correspond to formulas of infinitely valued Lukasiewicz logic. The paper is focused on existence and structure of Nash equilibria and algorithms for their computation. Although the existence of mixed strategy equilibria follows from a general theorem (Glicksberg, 1952) [5], nothing is known about their structure neither the theorem provides any method for computing them. The central problem of the article is to characterize the class of strategic games with McNaughton payoffs which have a finitely supported Nash equilibrium. We give a sufficient condition for finite equilibria and we propose an algorithm for recovering the corresponding equilibrium strategies. Our result easily generalizes to n-player strategic games which don't need to be strictly competitive with a payoff functions represented by piecewise linear functions with real coefficients. Our conjecture is that every game with McNaughton payoff allows for finitely supported equilibrium strategies, however we leave proving/disproving of this conjecture for future investigations.     

Separable and low-rank continuous games

In this paper, we study nonzero-sum separable games, which are continuous games whose payoffs take a sum-of-products form. Included in this subclass are all finite games and polynomial games. We investigate the structure of equilibria in separable games. We show that these games admit finitely supported Nash equilibria. Motivated by the bounds on the supports of mixed equilibria in two-player finite games in terms of the ranks of the payoff matrices, we define the notion of the rank of an n-player continuous game and use this to provide bounds on the cardinality of the support of equilibrium strategies. We present a general characterization theorem that states that a continuous game has finite rank if and only if it is separable. Using our rank results, we present an efficient algorithm for computing approximate equilibria of two-player separable games with fixed strategy spaces in time polynomial in the rank of the game. This research was funded in part by National Science Foundation grants DMI-0545910 and ECCS-0621922 and AFOSR MURI subaward 2003-07688-1.     

Generalized correlated equilibrium for two-person games in extensive form with perfect information

A correlation scheme (leading to a special equilibrium called “soft” correlated equilibrium) is applied for two-person finite games in extensive form with perfect information. Randomization by an umpire takes place over the leaves of the game tree. At every decision point players have the choice either to follow the recommendation of the umpire blindly or freely choose any other action except the one suggested. This scheme can lead to Pareto-improved outcomes of other correlated equilibria. Computational issues of maximizing a linear function over the set of soft correlated equilibria are considered and a linear-time algorithm in terms of the number of edges in the game tree is given for a special procedure called “subgame perfect optimization”.     

On the asymptotic convergence to mixed equilibria in 2×2 asymmetric games

We analyse the stability properties of mixed equilibria in 2×2 asymmetric games under evolutionary dynamics. With the standard replicator dynamics these equilibria are stable but not asymptotically stable. We modified the replicator dynamics by introducing players of two types: myopies — like in the standard replicator dynamics — and best responders. The behaviour of the latter is described by a continuos time version of the best reply dynamics. Asymptotic convergence under theModified Replicator Dynamics is proved by identifying a strictly decreasing Ljapunov function. We argue that the finding has important implications to justify the use of economic models with mixed strategy equilibria.     

Equilibrium strategies for multiple interdictors on a common network

In this work, we introduce multi-interdictor games, which model interactions among multiple interdictors with differing objectives operating on a common network. As a starting point, we focus on shortest path multi-interdictor (SPMI) games, where multiple interdictors try to increase the shortest path lengths of their own adversaries attempting to traverse a common network. We first establish results regarding the existence of equilibria for SPMI games under both discrete and continuous interdiction strategies. To compute such an equilibrium, we present a reformulation of the SPMI game, which leads to a generalized Nash equilibrium problem (GNEP) with non-shared constraints. While such a problem is computationally challenging in general, we show that under continuous interdiction actions, an SPMI game can be formulated as a linear complementarity problem and solved by Lemke’s algorithm. In addition, we present decentralized heuristic algorithms based on best response dynamics for games under both continuous and discrete interdiction strategies. Finally, we establish theoretical lower bounds on the worst-case efficiency loss of equilibria in SPMI games, with such loss caused by the lack of coordination among noncooperative interdictors, and use the decentralized algorithms to numerically study the average-case efficiency loss.     

Semidefinite programming for min–max problems and games

We consider two min–max problems (1) minimizing the supremum of finitely many rational functions over a compact basic semi-algebraic set and (2) solving a 2-player zero-sum polynomial game in randomized strategies with compact basic semi-algebraic sets of pure strategies. In both problems the optimal value can be approximated by solving a hierarchy of semidefinite relaxations, in the spirit of the moment approach developed in Lasserre (SIAM J Optim 11:796–817, 2001; Math Program B 112:65–92, 2008). This provides a unified approach and a class of algorithms to compute Nash equilibria and min–max strategies of several static and dynamic games. Each semidefinite relaxation can be solved in time which is polynomial in its input size and practice on a sample of experiments reveals that few relaxations are needed for a good approximation (and sometimes even for finite convergence), a behavior similar to what was observed in polynomial optimization.     

A relation between perfect equilibria in extensive form games and proper equilibria in normal form games

The concept of quasi-perfect equilibria for games in extensive form is introduced. It is shown that a proper equilibrium of a normal form game induces a quasi-perfect equilibrium in every extensive form game having this normal form.     

Nondominated equilibrium solutions of a multiobjective two-person nonzero-sum game in extensive form and corresponding mathematical programming problem

In most of studies on multiobjective noncooperative games, games are represented in normal form and a solution concept of Pareto equilibrium solutions which is an extension of Nash equilibrium solutions has been focused on. However, for analyzing economic situations and modeling real world applications, we often see cases where the extensive form representation of games is more appropriate than the normal form representation. In this paper, in a multiobjective two-person nonzero-sum game in extensive form, we employ the sequence form of strategy representation to define a nondominated equilibrium solution which is an extension of a Pareto equilibrium solution, and provide a necessary and sufficient condition that a pair of realization plans, which are strategies of players in sequence form, is a nondominated equilibrium solution. Using the necessary and sufficient condition, we formulate a mathematical programming problem yielding nondominated equilibrium solutions. Finally, giving a numerical example, we demonstrate that nondominated equilibrium solutions can be obtained by solving the formulated mathematical programming problem.     

Structure of extreme correlated equilibria: a zero-sum example and its implications

We exhibit the rich structure of the set of correlated equilibria by analyzing the simplest of polynomial games: the mixed extension of matching pennies. We show that while the correlated equilibrium set is convex and compact, the structure of its extreme points can be quite complicated. In finite games the ratio of extreme correlated to extreme Nash equilibria can be greater than exponential in the size of the strategy spaces. In polynomial games there can exist extreme correlated equilibria which are not finitely supported; we construct a large family of examples using techniques from ergodic theory. We show that in general the set of correlated equilibrium distributions of a polynomial game cannot be described by conditions on finitely many moments (means, covariances, etc.), in marked contrast to the set of Nash equilibria which is always expressible in terms of finitely many moments.     

Best response dynamics for role games

In a role game, players can condition their strategies on their player position in the base game. If the base game is strategically equivalent to a zero-sum game, the set of Nash equilibria of the role game is globally asymptotically stable under the best response dynamics. If the base game is 2 ×2, then in the cyclic case the set of role game equilibria is a continuum. We identify a single equilibrium in this continuum that attracts all best response paths outside the continuum. Received: June 2001     

情绪影响下选时博弈模型及其最优策略

依据Quiggin的秩依期望效用理论研究经典选时博弈问题。通过引入可以刻画局中人在博弈中情绪状态的非线性决策权重函数,将RDEU有限策略博弈扩展到连续博弈,构建了RDEU选时博弈模型。基于Riccati微分方程的解法,求出博弈模型中局中人的最优策略。最后,通过数值仿真,分析了不同情绪状态对局中人博弈决策行为的影响。研究发现,情绪对混合策略意义下的局中人最优策略有着显著的影响,在乐观情绪状态下,局中人对混合策略极易产生自信和较高的信任倾向,表现出"风险爱好者"行为;在悲观情绪状态下,局中人往往对混合策略缺乏自信和信任,表现出“风险厌恶者”行为。     

Volume discount pricing strategy in the VMI supply chain with price sensitive demand

This paper develops a volume discount scheme to coordinate Vendor Managed Inventory (VMI) supply chains with multiple heterogeneous retailers, in which the supply chain is modelled as a Stackelberg game with price sensitive demand. The paper proposes a method to construct a volume discount price scheme and shows that, any volume discount can be represented as a piecewise constant function of demand. We provide the game formulations of VMI supply chains and develop algorithms to solve this type of game problems, including finding the optimal volume discount scheme. Through a numerical study comparing the results of applying a volume discount strategy with the profits from a single wholesale price strategy, we show that the volume discount pricing strategies can be used to improve profits for all participants in the VMI supply chain in comparison with single price strategies.     

Bounded rationality, strategy simplification, and equilibrium

It is frequently suggested that predictions made by game theory could be improved by considering computational restrictions when modeling agents. Under the supposition that players in a game may desire to balance maximization of payoff with minimization of strategy complexity, Rubinstein and co-authors studied forms of Nash equilibrium where strategies are maximally simplified in that no strategy can be further simplified without sacrificing payoff. Inspired by this line of work, we introduce a notion of equilibrium whereby strategies are also maximally simplified, but with respect to a simplification procedure that is more careful in that a player will not simplify if the simplification incents other players to deviate. We study such equilibria in two-player machine games in which players choose finite automata that succinctly represent strategies for repeated games; in this context, we present techniques for establishing that an outcome is at equilibrium and present results on the structure of equilibria.     

Coordination games on graphs

We introduce natural strategic games on graphs, which capture the idea of coordination in a local setting. We study the existence of equilibria that are resilient to coalitional deviations of unbounded and bounded size (i.e., strong equilibria and k-equilibria respectively). We show that pure Nash equilibria and 2-equilibria exist, and give an example in which no 3-equilibrium exists. Moreover, we prove that strong equilibria exist for various special cases. We also study the price of anarchy (PoA) and price of stability (PoS) for these solution concepts. We show that the PoS for strong equilibria is 1 in almost all of the special cases for which we have proven strong equilibria to exist. The PoA for pure Nash equilbria turns out to be unbounded, even when we fix the graph on which the coordination game is to be played. For the PoA for k-equilibria, we show that the price of anarchy is between \(2(n-1)/(k-1) - 1\) and \(2(n-1)/(k-1)\). The latter upper bound is tight for \(k=n\) (i.e., strong equilibria). Finally, we consider the problems of computing strong equilibria and of determining whether a joint strategy is a k-equilibrium or strong equilibrium. We prove that, given a coordination game, a joint strategy s, and a number k as input, it is co-NP complete to determine whether s is a k-equilibrium. On the positive side, we give polynomial time algorithms to compute strong equilibria for various special cases.     

Strategically supported cooperation in dynamic games with coalition structures

The problem of strategic stability of long-range cooperative agreements in dynamic games with coalition structures is investigated. Based on imputation distribution procedures, a general theoretical framework of the differential game with a coalition structure is proposed. A few assumptions about the deviation instant for a coalition are made concerning the behavior of a group of many individuals in certain dynamic environments.From these, the time-consistent cooperative agreement can be strategically supported by ε-Nash or strong ε-Nash equilibria. While in games in the extensive form with perfect information, it is somewhat surprising that without the assumptions of deviation instant for a coalition, Nash or strong Nash equilibria can be constructed.