Reactive strategies: an inch of memory, a mile of equilibria

DOI10.3390/G12020042MaRDI QIDQ2052537zbMATH OpenOpenAlexFDO

Authors A. P. Baklanov

Publication date 26 November 2021

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g12020042

zbMATH Keywords

1-memory or memory-one strategiesinfinitely repeated gamesNash equilibrium

Mathematics Subject Classification ID

2-person games (91A05) Noncooperative games (91A10) Multistage and repeated games (91A20)

Review text

Summary: We explore how an incremental change in complexity of strategies (``an inch of memory) in repeated interactions influences the sets of Nash equilibrium (NE) strategy and payoff profiles. For this, we introduce the two most basic setups of repeated games, where players are allowed to use only reactive strategies for which a probability of players' actions depends only on the opponent's preceding move. The first game is trivial and inherits equilibria of the stage game since players have only unconditional (memory-less) reactive strategies (RSs); in the second one, players also have conditional stochastic RSs. This extension of the strategy sets can be understood as a result of evolution or learning that increases the complexity of strategies. For the game with conditional RSs, we characterize all possible NE profiles in stochastic RSs and find all possible symmetric games admitting these equilibria. By setting the unconditional benchmark as the least symmetric equilibrium payoff profile in memory-less RSs, we demonstrate that for most classes of symmetric stage games, infinitely many equilibria in conditional stochastic RSs (``a mile of equilibria) Pareto dominate the benchmark. Since there is no folk theorem for RSs, Pareto improvement over the benchmark is the best one can gain with an inch of memory.

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Cites work

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Cited in

(2)

• Memory-two strategies forming symmetric mutual reinforcement learning equilibrium in repeated prisoners' dilemma game
• Reactive learning strategies for iterated games

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