Avoiding non-optimal management decisions by applying a three-person inspection game

Fandel, Günter; Trockel, Jan

doi:10.1016/j.ejor.2012.09.032

Cited by 14 publications

(2 citation statements)

References 36 publications

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“…Many applications can be found to illustrate how polymatrix games can be used. In the following, we illustrate our results Game Theory 9 on a three-player chain store competition game and a threeplayer inspection management game inspired from Fandel and Trockel [29]. Application 1.…”

Section: Applicationsmentioning

confidence: 99%

On Perfect Nash Equilibria of Polymatrix Games

Belhaiza

2014

Game Theory

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When confronted with multiple Nash equilibria, decision makers have to refine their choices. Among all known Nash equilibrium refinements, theperfectnessconcept is probably the most famous one. It is known that weakly dominated strategies of two-player games cannot be part of a perfect equilibrium. In general, thisundominanceproperty however does not extend ton-player games (E. E. C. van Damme, 1983). In this paper we show that polymatrix games, which form a particular class ofn-player games, verify the undominance property. Consequently, we prove that every perfect equilibrium of a polymatrix game is undominated and that every undominated equilibrium of a polymatrix game is perfect. This result is used to set a new characterization of perfect Nash equilibria for polymatrix games. We also prove that the set of perfect Nash equilibria of a polymatrix game is a finite union of convex polytopes. In addition, we introduce a linear programming formulation to identify perfect equilibria for polymatrix games. These results are illustrated on two small game applications. Computational experiments on randomly generated polymatrix games with different size and density are provided.

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Section: Applicationsmentioning

confidence: 99%

On Perfect Nash Equilibria of Polymatrix Games

Belhaiza

2014

Game Theory

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“…Already in 1979, Fandel conducted a game theoretic analysis to establish optimal decisions within companies. More recently, for example Fandel and Lorth (2009) turn to the corresponding efficiency analysis, and Fandel and Trockel (2013) discuss an interpersonal trust game in the form of an inspection game, where the individual decisions depend on the mutual behavior. This special issue attends in many ways to the research fields Günter Fandel committed himself to.…”

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confidence: 99%