Is Having a Unique Equilibrium Robust?

We investigate whether having a unique equilibrium (or a given number of equilibria) is robust to perturbation of the payoffs, both for Nash equilibrium and correlated equilibrium. We show that the set of n-player finite games with a unique correlated equilibrium is open, while this is not true of Nash equilibrium for n>2. The crucial lemma is that a unique correlated equilibrium is a quasi-strict Nash equilibrium. Related results are studied. For instance, we show that generic two-person zero-sum games have a unique correlated equilibrium and that, while the set of symmetric bimatrix games with a unique symmetric Nash equilibrium is not open, the set of symmetric bimatrix games with a unique and quasi-strict symmetric Nash equilibrium is

Reputation and commitment in two-person repeated games without discounting

Two-person repeated games with no discounting are considered where there is uncertainty about the type of the players. If there is a possibility that a player is an automaton committed to a particular pure or mixed stage-game action, then this provides a lower bound on the Nash equilibrium payoffs to a normal type of this player. The lower bound is the best available and is robust to the existence of other types. The results are extended to the case of two-sided uncertainty. This work extends Schmidt (1993) who analyzed the restricted class of conflicting interest games

Decision Problems for Nash Equilibria in Stochastic Games

We analyse the computational complexity of finding Nash equilibria in stochastic multiplayer games with $\omega$-regular objectives. While the existence of an equilibrium whose payoff falls into a certain interval may be undecidable, we single out several decidable restrictions of the problem. First, restricting the search space to stationary, or pure stationary, equilibria results in problems that are typically contained in PSPACE and NP, respectively. Second, we show that the existence of an equilibrium with a binary payoff (i.e. an equilibrium where each player either wins or loses with probability 1) is decidable. We also establish that the existence of a Nash equilibrium with a certain binary payoff entails the existence of an equilibrium with the same payoff in pure, finite-state strategies.Comment: 22 pages, revised versio

Pure Nash Equilibria and Best-Response Dynamics in Random Games

In finite games mixed Nash equilibria always exist, but pure equilibria may fail to exist. To assess the relevance of this nonexistence, we consider games where the payoffs are drawn at random. In particular, we focus on games where a large number of players can each choose one of two possible strategies, and the payoffs are i.i.d. with the possibility of ties. We provide asymptotic results about the random number of pure Nash equilibria, such as fast growth and a central limit theorem, with bounds for the approximation error. Moreover, by using a new link between percolation models and game theory, we describe in detail the geometry of Nash equilibria and show that, when the probability of ties is small, a best-response dynamics reaches a Nash equilibrium with a probability that quickly approaches one as the number of players grows. We show that a multitude of phase transitions depend only on a single parameter of the model, that is, the probability of having ties.Comment: 29 pages, 7 figure

One for all, all for one---von Neumann, Wald, Rawls, and Pareto

Applications of the maximin criterion extend beyond economics to statistics, computer science, politics, and operations research. However, the maximin criterion---be it von Neumann's, Wald's, or Rawls'---draws fierce criticism due to its extremely pessimistic stance. I propose a novel concept, dubbed the optimin criterion, which is based on (Pareto) optimizing the worst-case payoffs of tacit agreements. The optimin criterion generalizes and unifies results in various fields: It not only coincides with (i) Wald's statistical decision-making criterion when Nature is antagonistic, (ii) the core in cooperative games when the core is nonempty, though it exists even if the core is empty, but it also generalizes (iii) Nash equilibrium in $n$-person constant-sum games, (iv) stable matchings in matching models, and (v) competitive equilibrium in the Arrow-Debreu economy. Moreover, every Nash equilibrium satisfies the optimin criterion in an auxiliary game