scholarly journals A Cooperative Dual to the Nash Equilibrium for Two-Person Prescriptive Games

2014 ◽  
Vol 2014 ◽  
pp. 1-4 ◽  
Author(s):  
H. W. Corley ◽  
Phantipa Kwain

An alternative to the Nash equilibrium (NE) is presented for two-person, one-shot prescriptive games in normal form, where the outcome is determined by an arbiter. The NE is the fundamental solution concept in noncooperative game theory. It is based on the assumption that players are completely selfish. However, NEs are often not played in practice, so we present a cooperative dual as an alternative solution concept by which an arbiter can assign the players' actions. In this dual equilibrium (DE), each player acts in the other's best interest. We formally define prescriptive games and the DE, then summarize the duality relationships between the NE and DE for two players. We also apply the DE to some prescriptive games and compare it to other outcomes.

1999 ◽  
Vol 37 (3) ◽  
pp. 1067-1082 ◽  
Author(s):  
Roger B Myerson

John Nash's formulation of noncooperative game theory was one of the great breakthroughs in the history of social science. Nash's work in this area is reviewed in its historical context to better understand how the fundamental ideas of noncooperative game theory were developed and how they changed the course of economic theory.


2010 ◽  
pp. 26-43 ◽  
Author(s):  
R. Myerson

John Nashs formulation of noncooperative game theory was one of the great breakthroughs in the history of social science. Nashs work in this area is reviewed in its historical context to better understand how the fundamental ideas of noncooperative game theory have been developed and how they have changed the course of economic theory. It is shown in particular how the scope of economics has changed from production and allocation of material goods to the study of rational competitive behavior in any institution of society.


Author(s):  
Peter Vanderschraaf

Problems of interaction, which give rise to justice, are structurally problems of game theory, the mathematical theory of interactive decisions. Five problems of interaction are introduced that are all intrinsically important and that help motivate important parts of the discussions in subsequent chapters: the Farmer’s Dilemma, impure coordination, the Stag Hunt, the free-rider problem, and the choice for a powerless party to acquiesce or resist. Elements of noncooperative game theory essential to analyzing problems of justice are reviewed, including especially games in the strategic and extensive forms, the Nash equilibrium, the Prisoner’s Dilemma, and games of incomplete information. Each of the five motivating problems is reformulated game-theoretically. These game-theoretic reformulations reveal precisely why the agents involved would have difficulty arriving at mutually satisfactory resolutions, and why “solutions” for these problems call for principles of justice to guide the agents’ conduct.


1992 ◽  
Vol 6 (4) ◽  
pp. 83-101 ◽  
Author(s):  
Adam Brandenburger

This paper describes an approach to noncooperative game theory that aims to capture considerations that exercise the minds of real-world strategists. The most commonly used tool of noncooperative game theory is the Nash equilibrium. This raises the question: Are there assumptions on what the players in a game think—including what they think other players think, and so on—that lead to consideration of Nash equilibrium? The paper provides answers to this, and related, questions. The approach of this paper involves analyzing the decision problem facing each player in a strategic (“interactive”) situation. In addition to grounding game theory in considerations that are of the essence in actual strategic situations, the approach has a number of other objectives: 1) to make game theory more immediately accessible to people who are trained in decision theory but who are not “game theorists” and 2) to make game theory easier to teach to students. Finally, the approach suggests new directions for research into the nature of strategic situations.


Author(s):  
João P. Hespanha

This chapter discusses the key principles of noncooperative game theory with the aid of several examples. To characterize a game, several items must be specified; for example, the players are the agents that make decisions. For a mathematical solution to a game, it is also important to make assumptions on the player's rationality, regarding questions such as: Will the players always pursue their best interests to fulfill their objectives? Will the players form coalitions? Will the players trust each other? The chapter proceeds by using the rope-pulling game to examine the motivation and implications of assuming a noncooperative vs. cooperative framework. It also considers the robust design problem and its formalization into a resistive circuit design game, a network routing game, and the Nash equilibrium before concluding with a practice exercise related to the network routing game, complete with solution.


Author(s):  
Herbert Gintis

This chapter deals with the basic concepts of game theory. It presents the formulations for the extensive form, normal form, and Nash equilibrium. It concludes with a brief discussion of correlated equilibrium, a solution concept that has been neglected in classical game theory but is a more natural solution concept than the Nash equilibrium. This is because the correlated equilibrium directly addresses the central weaknesses of the Nash equilibrium concept: its lack of a mechanism for choosing among various equally plausible alternatives, for coordinating the behaviors of players who are indifferent among several pure strategies, and for providing incentives for players to follow the suggested strategy even when they may have private payoffs that would lead self-regarding agents to do otherwise.


Author(s):  
V. I. Zhukovskiy ◽  
S. P. Samsonov ◽  
V. E. Romanova ◽  
L. V. Zhukovskaya ◽  
Yu. S. Mukhina

Publications on mathematical game theory with many (not less than 2) players one can conditionally distribute in four directions: noncooperative, hierarchical, cooperative and coalition games. The two last in its turn are divided in the games with side and nonside payments and respectively in the games with transferable and nontransferable payoffs. If the first ones are being actively investigated (St. Petersburg State Faculty of Applied Mathematics and Control Processes, St. Petersburg Economics and Mathematics Institute, Institute of Applied Mathematical Research of Karelian Research Centre RAS), then the games with nontransferable payoffs are not covered. Here we suggest to base on conception of objections and counterobjections. The initial investigations were published in two monographies of E.\;I.\;Vilkas, the Lithuanian mathematician (the pupil of N.\;N.\;Vorobjev, the professor of St. Petersburg University). For the differential games this conception was first applied by E.\;M.\;Waisbord in 1974, then it was continued by the first author of the present article combined with E.\;M.\;Waisbord in the book <<Introduction in the theory of differential games of n-persons and its application>> M.: Sovetskoye Radio, 1980, and in monography of Zhukovskiy <<Equilibrium of objections and counterobjections>>, M.: KRASAND, 2010. However before formulating tasks of coalition games, to which this article is devoted, we return to noncoalition variant of many persons game. Namely we consider noncooperation game in normal form, defined by ordered triple: $$G_N=\langle\mathbb{N}, \{X_i\}_{i \in \mathbb{N}}, \{f_i (x)\}_{i \in \mathbb{N}}\rangle.$$ Here $\mathbb{N}=\{1,2,\ldots , N\ge2\}$ "--- set of ordinal numbers of players, each of them (see later) chooses its strategy $x_i\in X_i\subseteq \mathbb{R}^{n_i}$ (where by the symbol $\R^k$, $k\ge 1$, as usual, is denoted $k$-dimensional real Euclidean space, its elements are ordered sets of $k$-dimensional numbers, as well Euclidean norm $\parallel \cdot \parallel$ is used); as a result situation $x=(x_1,x_2,\ldots,x_N)\in X=\prod \limits_{i\in \mathbb{N}}X_i\subseteq \mathbb{R}^{\sum \limits_{i\in \mathbb{N}}n_i}$ form in the game. Payoff functions $f_i (x)$ are defined on set $X$ of situations $x$ for each players: \begin{gather*} f_1(x)=\sum_{j=1}^{N}x_{j}^{'} D_{1j}x_{j}+2d_{11}^{'} x_1,\\ f_2(x)=\sum_{j=1}^{N}x_{j}^{'} D_{2j}x_{j}+2d_{22}^{'} x_2,\\ \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\\ f_N(x)=\sum_{j=1}^{N}x_{j}^{'} D_{Nj}x_{j}+2d_{NN}^{'} x_N. \end{gather*} In the opinion of luminaries of game theory to equilibrium as acceptable solution of differential game has to be inherent the property of stability: the deviation from it of individual player cannot increase the payoff of deviated player. The solution suggested in 1949 (at that time by the 21 years old postgraduate student of Prinston University John Forbs Nash (jun.) and later named Nash equilibrium "--- NE) meets entirely this requirement. The NE gained certainly <<the reigning position>> in economics, sociology, military sciences. In 1994 J.\;F.\;Nash was awarded Nobel Prize in economics (in a common effort with John Harsanyi and R.\;Selten) <<for fundamental analysis of equilibria in noncooperative game theory>>. Actually Nash developed the foundation of scientific method that played the great role in the development of world economy. If we open any scientific journal in economics, operation research, system analysis or game theory we certainly find publications concerned NE. However <<And in the sun there are the spots>>, situations sets of Nash equilibrium must be internally and externally unstable. Thus, in the simplest noncoalition game of 2 persons in the normal form $$ \langle\{1,2\},~\{X_i=[-1,1]\}_{i=1,2},~ \{f_i(x_1,x_2)=2x_1x_2-x_i^2\}_{i=1,2}\rangle$$ set os Nash equilibrium situations will be $$X^{e}=\{x^{e}=(x_1^{e},~x_2^{e})=(\alpha, \alpha)~|~\forall \alpha=const\in [-1,1]\},~f_i(x^e)=\alpha^2~(i\in 1,2).$$ For elements of this set (the segment of bisectrix of the first and the third quarter of coordinate angle), firstly, for $x^{(1)}=(0,0)\in X^{(e)}$ and $x^{(2)}=(1,1)\in X^{e}$ we have $f_i(x^{(1)})=0<f_i(x^{(2)})=1~(i=1,2)$ and therefore the set $X^e$ is internally unstable, secondly, $f_i(x^{(1)})=0<f_i(\frac{1}{4},\frac{1}{3})~(i=1,2)$ and therefore the set $X^e$ is externally unstable. The external just as the internal instability of set of Nash equilibrium is negative for its practical use. In the first case there exists situation which dominates NE (for all players), in the second case this situation is Nash equilibrium. Pareto maximality of Nash equilibrium situation would allow to avoid consequences of external and internal instability. However such coincidence is an exotic phenomenon. Thus to avoid trouble connected with external and internal instability then we add the requirement of Pareto maximality to the notion of equilibrium of objections and counterobjections offered below. However we first of all reduce generally accepted solution concepts "--- NE and BE for the game $G_N$. It is proved in the article that in mathematical model both NE and BE are absent but there exist equilibria of objections and conterobjections as well as sanctions and countersanctions and simultaneously Pareto maximality.


Author(s):  
João P. Hespanha

This book is aimed at students interested in using game theory as a design methodology for solving problems in engineering and computer science. The book shows that such design challenges can be analyzed through game theoretical perspectives that help to pinpoint each problem's essence: Who are the players? What are their goals? Will the solution to “the game” solve the original design problem? Using the fundamentals of game theory, the book explores these issues and more. The use of game theory in technology design is a recent development arising from the intrinsic limitations of classical optimization-based designs. In optimization, one attempts to find values for parameters that minimize suitably defined criteria—such as monetary cost, energy consumption, or heat generated. However, in most engineering applications, there is always some uncertainty as to how the selected parameters will affect the final objective. Through a sequential and easy-to-understand discussion, the book examines how to make sure that the selection leads to acceptable performance, even in the presence of uncertainty—the unforgiving variable that can wreck engineering designs. The book looks at such standard topics as zero-sum, non-zero-sum, and dynamic games and includes a MATLAB guide to coding. This book offers students a fresh way of approaching engineering and computer science applications.


2021 ◽  
Author(s):  
Michael Richter ◽  
Ariel Rubinstein

Abstract Each member of a group chooses a position and has preferences regarding his chosen position. The group’s harmony depends on the profile of chosen positions meeting a specific condition. We analyse a solution concept (Richter and Rubinstein, 2020) based on a permissible set of individual positions, which plays a role analogous to that of prices in competitive equilibrium. Given the permissible set, members choose their most preferred position. The set is tightened if the chosen positions are inharmonious and relaxed if the restrictions are unnecessary. This new equilibrium concept yields more attractive outcomes than does Nash equilibrium in the corresponding game.


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