When the players are not expectation maximizers

  • Authors:
  • Amos Fiat;Christos Papadimitriou

  • Affiliations:
  • School of Computer Science, Tel Aviv University;University of California at Berkeley

  • Venue:
  • SAGT'10 Proceedings of the Third international conference on Algorithmic game theory
  • Year:
  • 2010

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Abstract

Much of Game Theory, including the Nash equilibrium concept, is based on the assumption that players are expectation maximizers. It is known that if players are risk averse, games may no longer have Nash equilibria ([11,6]. We show that 1. Under risk aversion (convex risk valuations), and for almost all games, there are no mixed Nash equilibria, and thus either there is a pure equilibrium or there are no equilibria at all, and, 2. For a variety of important valuations other than expectation, it is NP-complete to determine if games between such players have a Nash equilibrium.