English

Strengthening Nash Equilibria

Computer Science and Game Theory 2023-12-27 v2

Abstract

Nash equilibrium is often heralded as a guiding principle for rational decision-making in strategic interactions. However, it is well-known that Nash equilibrium sometimes fails as a reliable predictor of outcomes, with two of the most notable issues being the fact that it is not resilient to collusion and that there may be multiple Nash equilibria in a single game. In this paper, we show that a mechanism designer can get around these two issues for free by expanding the action sets of the original game. More precisely, given a normal-form or Bayesian game Γ\Gamma and a Nash equilibrium σ\vec{\sigma} in Γ\Gamma, a mechanism designer can construct a new game Γσ\Gamma^{\vec{\sigma}} by expanding the action set of each player and defining appropriate utilities in the action profiles that were not already in the original game. We show that the designer can construct Γσ\Gamma^{\vec{\sigma}} in such a way that (a) σ\vec{\sigma} is a semi-strong Nash equilibrium of Γσ\Gamma^{\vec{\sigma}}, and (b) σ\vec{\sigma} Pareto-dominates or quasi Pareto-dominates all other Nash equilibria of Γσ\Gamma^{\vec{\sigma}}.

Keywords

Cite

@article{arxiv.2312.14745,
  title  = {Strengthening Nash Equilibria},
  author = {Ivan Geffner and Moshe Tennenholtz},
  journal= {arXiv preprint arXiv:2312.14745},
  year   = {2023}
}

Comments

29 pages

R2 v1 2026-06-28T13:59:57.215Z