Subgame

Abstract: The Generalized Nash Equilibrium Problem is an important model that has its roots in the economic sciences but is being fruitfully used in many different fields. In this survey paper we aim at discussing its main properties and solution algorithms, pointing out what could be useful topics for future research in the field.

Abstract: Lab experiments have gone to extremes to isolate and repress other-regarding behavior in extensive-form bargaining games, with limited success. Consider, for example, Elizabeth Hoffman et al.’s (1996; hereafter HMS) Anonymous Dictator game. This game controls self-interested strategic behavior by giving a person complete control over the distribution of wealth, and complete anonymity from all others including the experimenter. While theory predicts people with complete control and complete anonymity will offer up nothing to others, in fact they still share the wealth in about 40 percent of the observed bargains. Such other-regarding choice is another example in which individual behavior differs from that predicted by subgame perfection, and supports the call for a new “behavioral game theory” (Colin F. Camerer, 1997). Herein we extend the work of HMS to reveal a setting in which 95 percent of dictators follow game-theoretic predictions. In contrast to previous studies, our design has people bargain over earned wealth rather than unearned wealth granted by the experimenter. We argue that just as rewards must be salient (Kyung Hwan Baik et al., 1999), the assets in a bargain must be legitimate to produce rational behavior. Our results support this conjecture. Dictators bargaining over earned wealth were more selfinterested than observed in previous studies; and when they had complete anonymity, selfless behavior is essentially eliminated.

Abstract: Game theoretic reasoning has been widely applied in economics in recent years. Undoubtedly, the most commonly used tool has been the strategic equilibrium of Nash (Ann Math 54:286–295, 1951), or one or another of its so-called “refinements.” Though much effort has gone into developing these refinements, relatively little attention has been paid to a more basic question: Why consider Nash equilibrium in the first place?

Abstract: 1 Introduction.- 1.1 Informal Description of Games and Game Theory.- 1.2 Dynamic Programming.- 1.3 Subgame Perfect Equilibria.- 1.4 Sequential Equilibria and Perfect Equilibria.- 1.5 Perfect, Proper and Persistent Equilibria.- 1.6 Essential Equilibria and Regular Equilibria.- Notes.- 2 Games in Normal Form.- 2.1 Preliminaries.- 2.2 Perfect Equilibria.- 2.3 Proper Equilibria.- 2.4 Essential Equilibria.- 2.5 Regular Equilibria.- 2.6 An "Almost all" Theorem.- Notes.- 3 Matrix and Bimatrix Games.- 3.1 Preliminaries.- 3.2 Perfect Equilibria.- 3.3 Regular Equilibria.- 3.4 Characterizations of Regular Equilibria.- 3.5 Matrix Games.- Notes.- 4 Control Costs.- 4.1 Introduction.- 4.2 Games with Control Costs.- 4.3 Approachable Equilibria.- 4.4 Proper Equilibria.- 4.5 Perfect Equilibria.- 4.6 Regular Equilibria.- Notes.- 5 Incomplete Information.- 5.1 Introduction.- 5.2 Disturbed Games.- 5.3 Firm Equilibria.- 5.4 Perfect Equilibria.- 5.5 Weakly Proper Equilibria.- 5.6 Strictly Proper Equilibria and Regular Equilibria.- 5.7 Proofs of the Theorems of Sect. 5.5.- Notes.- 6 Extensive Form Games.- 6.1 Definitions.- 6.2 Equilibria and Subgame Perfectness.- 6.3 Sequential Equilibria.- 6.4 Perfect Equilibria.- 6.5 Proper Equilibria.- 6.6 Control Costs.- 6.7 Incomplete Information.- Notes.- 7 Bargaining and Fair Division.- 7.1 Introduction.- 7.2 Divide and Choose.- 7.3 Auction Methods.- 7.4 Bargaining Problems and Bargaining Solutions.- 7.5 The Nash Negotiation Game.- 7.6 The Rubinstein/Binmore Model.- 7.7 The Crawford/Moulin Model.- 7.8 Bargaining Games with Variable Threat Point.- Notes.- 8 Repeated Games.- 8.1 Introduction.- 8.2 Preliminaries.- 8.3 Infinitely Repeated Games Without Discounting.- 8.4 Infinitely Repeated Games with Discounting: Nash Equilibria.- 8.5 Infinitely Repeated Games with Discounting: Subgame Perfect Equilibria.- 8.6 Finitely Repeated Games: Nash Equilibria.- 8.7 Finitely Repeated Games: Subgame Perfect Equilibria.- 8.8 Renegotiation-Proof Equilibria.- Notes.- 9 Evolutionary Game Theory.- 9.1 Introduction.- 9.2 Evolutionarily Stable Strategies.- 9.3 Strategic Stability of ESS.- 9.4 Population Dynamics.- 9.5 Asymmetric Contests: Examples and the Model.- 9.6 Asymmetric Contests: Results.- 9.7 Contests in Extensive Form: Definitions.- 9.8 Contests in Extensive Form: Results.- Notes.- 10 Strategic Stability and Applications.- 10.1 Equivalence of Games.- 10.2 Requirements for Strategic Stability.- 10.3 Stable Equilibria.- 10.4 Signalling Games: Introduction.- 10.5 Signalling Games: Dominance, Intuitive Arguments and Stability.- 10.6 Spence's Job Market Signalling Model.- 10.7 The Chain Store Paradox.- 10.8 Repeated Games.- Notes.- References.- Survey Diagrams.