Questions tagged [nash-equilibrium]

A basic solution concept in game theory that requires each player to select their best response to the strategies chosen by others.

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Identifying Nash equilibria in extensive form game

Is there a systematic way of identifying all (pure strategy) Nash equilibria (not just the subgame perfect ones) in an extensive form game? In the following Entrant v Resident example, there are three ...
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1answer
362 views

Definition of Bayesian Nash equilibrium

I have a basic doubt on the definition of Bayesian Nash equilibrium. Consider the following game: 1) $N$ players. 2) Each player $i$ has a type, assigned by nature and denoted by $\epsilon_i$. ...
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Example of a game with no Nash equilibria but at least one correlated equilibrium

In this answer there is the offhand remark Of course, a game with no Nash equilibria may have a correlated equilibrium, but I'm not aware of any simple examples where this is the case. Can ...
5
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2answers
522 views

Does the concept of Nash-equilibrium conflict with the concept of market equilibrium in the lemon market

Consider a version of Akerlof's Lemon market with two types of sellers. One type sells Quality cars the other type sells Lemons. Buyers' reservation prices are $r_{B,Q}$ for a Quality car and $r_{B,L}$...
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2answers
652 views

Pareto optimality and Externalities

Let's consider 5 farmers, each of them has 2 cows to put into the field. So every farmers can put 0,1 or 2 cows. I denote the three stategies by $q_i$, i=0,1,2. Now, the payoffs ( i.e. the amout of ...
2
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1answer
332 views

How to demonstrate that a game always have a subgame-perfect equilibrium in pure strategies?

If I have an specific extensive game, with only a finite set of strategies, how can I demonstrate that the game always have a subgame-perfect equilibrium in pure strategies? My first intuition was to ...
13
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2answers
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Rosen's Diagonal Strict Concavity condition

Consider a game with $n$ players, with strategy space $S \subset \mathbb{R}$, where $S$ is bounded set, and player's $i$ payoff function $\pi_i:S^n \rightarrow \mathbb{R}$. Rosen's condition (J. B. ...
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How infinite Nash equilibria are possible in a game?

I was studying games when one of the players seems to be indifferent between two or more pure strategies because he gets the same payoff with each strategy. We say that there are infinite Nash ...
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1answer
124 views

Are symmetric equilibria continuous with respect to the payoff matrix?

Assume a two player symmetric game where the payoff for the row player is given by: $$ A = \left( \begin{array}{cc} a_{1,1} & a_{1,2} &\cdots & a_{1,n}\\ a_{2,1} & a_{2,2} &\cdots &...
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Fehr & Schmidt, ultimatum game, inequaltiy aversion, perfect subgame Nash equilibrium

I am preparing for an exam. I have found an old exam but I have no solutions for it, so I tried to solve it, but I dont know if I did it correctly and need therefore your help. The problem looks as ...