 A polynomial-time method to compute all Nash equilibria solutions of a general two-person inspection gameYael Deutsch European Journal of Operational Research, 2021, vol. 288, issue 3, 1036-1052 Abstract: We consider a two-person nonzero-sum simultaneous inspection game that takes place at multiple sites. The inspector has a limited inspection resource. She needs to decide which sites to inspect, and with how much effort, while adhering also to local restrictions on the permitted inspections levels at the sites. The inspectee has several employees who work on his behalf. He needs to decide how to distribute them across the sites, and how they should act there. Computation of Nash equilibria is challenging for this sort of games. Still, we develop a linear-time algorithm that determines all Nash equilibria solutions of the game, and provide explicit (easily computable) expressions for all possible Nash equilibria. We then derive some managerial insights by applying the algorithm to several examples, and examining the Nash equilibria, including an outcome that an increase in the inspection resource may induce the inspectee to cooperate more at sites without increasing the inspection levels at them. Keywords: Game theory; Inspection game; Nash equilibria; Resource allocation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:288:y:2021:i:3:p:1036-1052 DOI: 10.1016/j.ejor.2020.06.032 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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