Beyond Nash Equilibrium: Solution Concepts for the 21st Century

Joseph Y. Halpern

In Krzysztof R. Apt, Erich Grädel: Lectures in Game Theory for Computer Scientists, 2011.

http://arxiv.org/pdf/0806.2139

Used by the Cassting project

Nash equilibrium is the most commonly-used notion of equilibrium for non-zero-sum games. However, it suffers from numerous problems. Some are well known in the game theory community; for example, the Nash equilibrium of repeated prisoner’s dilemma is neither normatively nor descriptively reasonable. However, new problems arise when considering Nash equilibrium from a computer science perspective: for example, Nash equilibrium is not robust (it does not tolerate “faulty” or “unexpected” behavior), it does not deal with coalitions, it does not take computation cost into account, and it does not deal with cases where players are not aware of all aspects of the game. Solution concepts that try to address these shortcomings of Nash equilibrium are discussed.