Subgame perfection in positive recursive games with perfect information

Subgame perfection in positive recursive games with perfect information

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Article ID: iaor20102616
Volume: 35
Issue: 1
Start Page Number: 193
End Page Number: 207
Publication Date: Feb 2010
Journal: Mathematics of Operations Research
Authors: , , ,
Keywords: information
Abstract:

We consider a class of n-player stochastic games with the following properties: (1) in every state, the transitions are controlled by one player; (2) the payoffs are equal to zero in every nonabsorbing state; (3) the payoffs are nonnegative in every absorbing state. We propose a new iterative method to analyze these games. With respect to the expected average reward, we prove the existence of a subgame-perfect ϵ-equilibrium in pure strategies for every ϵ > 0. Moreover, if all transitions are deterministic, we obtain a subgame-perfect 0-equilibrium in pure strategies.

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