Inefficiency of Nash Equilibria

Cooperation and self-interest: Pareto-inefficiency of Nash equilibria in finite random games.

The relative merits of cooperation and self-interest in an ensemble of strategic interactions can be investigated by using finite random games. In finite random games, finitely many players have finite numbers of actions and independently and identically distributed (iid) random payoffs with continuous distribution functions. In each realization, players are shown the values of all payoffs and ...

Universality of Nash Equilibria

Nash and Correlated Equilibria

In this document we will look at useful facts and definitions about Nash and correlated equilibria for two person games. More specifically we’ll give a brief definition of both equilibria, and then we’ll point out the relation between them. We will next introduce a numerical approach aimed at calculating Nash Equilibria of a symmetric game we wish to explore in CME 334. A motivation for this ap...

Coalitional Nash Equilibria

Let G be an N -player game in strategic form and C be a set of permissible coalition of players (exogenously given). A strategy profile σ is a coalitional-equilibrium if no permissible coalition in C has a unilateral deviation that profits to all its members. At the two extremes: when C contains only singleton players, σ reduces to a Nash equilibrium and when C consists on all coalitions of pla...

Potential functions and the inefficiency of equilibria

We survey one area of the emerging field of algorithmic game theory: the use of approximation measures to quantify the inefficiency of game-theoretic equilibria. Potential functions, which enable the application of optimization theory to the study of equilibria, have been a versatile and powerful tool in this area. We use potential functions to bound the inefficiency of equilibria in three dive...