Ex post Nash equilibrium in linear Bayesian games for decision making in multi-environments (Q1712152)
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English | Ex post Nash equilibrium in linear Bayesian games for decision making in multi-environments |
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Ex post Nash equilibrium in linear Bayesian games for decision making in multi-environments (English)
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21 January 2019
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Summary: We show that a Bayesian game where the type space of each agent is a bounded set of \(m\)-dimensional vectors with non-negative components and the utility of each agent depends linearly on its own type only is equivalent to a simultaneous competition in \(m\) basic games which is called a uniform multigame. The type space of each agent can be normalised to be given by the \((m-1)\)-dimensional simplex. This class of \(m\)-dimensional Bayesian games, via their equivalence with uniform multigames, can model decision making in multi-environments in a variety of circumstances, including decision making in multi-markets and decision making when there are both material and social utilities for agents as in the prisoner's dilemma and the trust game. We show that, if a uniform multigame in which the action set of each agent consists of one Nash equilibrium inducing action per basic game has a pure ex post Nash equilibrium on the boundary of its type profile space, then it has a pure ex post Nash equilibrium on the whole type profile space. We then develop an algorithm, linear in the number of types of the agents in such a multigame, which tests if a pure ex post Nash equilibrium on the vertices of the type profile space can be extended to a pure ex post Nash equilibrium on the boundary of its type profile space in which case we obtain a pure ex post Nash equilibrium for the multigame.
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multidimensional Bayesian game
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multigame
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type space partition
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prisoner's dilemma
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trust game
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