SMU SOE Seminar (Feb 8, 2017): Two-person Pairwise Solvable Games

A game is solvable if the set of Nash equilibria is nonempty and interchangeable. A pairwise solvable game is a two-person symmetric game in which any restricted game generated by a pair of strategies is solvable. We show that the set of equilibria in a pairwise solvable game is interchangeable. Under a quasiconcavity condition, we derive a complete order-theoretic characterization and some topological sufficient conditions for the existence of equilibria, and show that if the game is finite, then an iterated elimination of weakly dominated strategies leads precisely to the set of Nash equilibria, which means that such a game is both solvable and dominance solvable. All results are applicable to symmetric contests, such as the rent-seeking game and the rank-order tournament, which are shown to be pairwise solvable. Some applications to evolutionary equilibria are also given.

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