Finding all Nash equilibria of a finite game using polynomial algebra Open Access Symposium

First Online: 20 February 2009 Received: 01 December 2006 Accepted: 28 January 2009 DOI :
10.1007/s00199-009-0447-z

Cite this article as: Datta, R.S. Econ Theory (2010) 42: 55. doi:10.1007/s00199-009-0447-z
Abstract The set of Nash equilibria of a finite game is the set of nonnegative solutions to a system of polynomial equations. In this survey article, we describe how to construct certain special games and explain how to find all the complex roots of the corresponding polynomial systems, including all the Nash equilibria. We then explain how to find all the complex roots of the polynomial systems for arbitrary generic games, by polyhedral homotopy continuation starting from the solutions to the specially constructed games. We describe the use of Gröbner bases to solve these polynomial systems and to learn geometric information about how the solution set varies with the payoff functions. Finally, we review the use of the Gambit software package to find all Nash equilibria of a finite game.

Keywords Nash equilibrium Normal form game Algebraic variety Our earlier paper (Datta 2003c) contains much of the material which is surveyed more expansively here. We would like to express our gratitude to the following for generously taking the time to personally discuss with us the use of their software packages: Andrew McLennan and Ted Turocy (Gambit McKelvey et al. 2006), Gert-Martin Greuel (Singular Greuel et al. 2001), and Jan Verschelde (PHC Verschelde 1999). We would also like to thank Gabriela Jeronimo for sending us a preprint of her paper with Daniel Perrucci and Juan Sabia, and Andrew McLennan for suggesting she do so. We would like to thank Richard Fateman and Bernd Sturmfels for supervising the research leading up to that paper, during which the author was partially supported by NSF grant DMS 0138323. We would also like to acknowledge our debt to Bernd Sturmfels, especially for teaching us about the application of polynomial algebra to Nash equilibria, in the lectures leading to Sturmfels (2002).

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