Structure theorems for game trees.
Kohlberg and Mertens [Kohlberg, E. & Mertens, J. (1986) Econometrica 54, 1003-1039] proved that the graph of the Nash equilibrium correspondence is homeomorphic to its domain when the domain is the space of payoffs in normal-form games. A counterexample disproves the analog for the equilibrium outcome correspondence over the space of payoffs in extensive-form games, but we prove an analog when the space of behavior strategies is perturbed so that every path in the game tree has nonzero probability. Without such perturbations, the graph is the closure of the union of a finite collection of its subsets, each diffeomorphic to a corresponding path-connected open subset of the space of payoffs. As an application, we construct an algorithm for computing equilibria of an extensive-form game with a perturbed strategy space, and thus approximate equilibria of the unperturbed game.
Govindan
Srihari
S
Economics Department, University of Western Ontario, London, ON, Canada N6A 5C2.
Wilson
Robert
R