Subgame Perfect Nash Equilibrium: A Learning Approach Via Costs to Move

Francesco Caruso (francesco.caruso@unina.it), Maria Carmela Ceparano and Jacqueline Morgan
Additional contact information
Francesco Caruso: Università di Napoli Federico II

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: In one-leader one-follower two-stage games, also called Stackelberg games, multiplicity of Subgame Perfect Nash Equilibria (henceforth SPNE) arises when the best reply correspondence of the follower is not a single-valued map. This paper concerns a new method to approach SPNEs which makes use of a sequence of SPNEs of perturbed games where the best reply correspondence of the follower is single-valued. The sequence is generated by a learning method where the payoff functions of both players are modified subtracting a term that represents a physical and behavioral cost to move and which relies on the proximal point methods linked to the Moreau-Yosida regularization. Existence results of SPNEs approached via this method are provided under mild assumptions on the data, together with numerical examples and connections with other methods to construct SPNEs.

Keywords: Non-cooperative game; Stackelberg game; subgame perfect Nash equilibrium; selection; learning method; cost to move; proximal point method. (search for similar items in EconPapers)
Date: 2017-04-21, Revised 2018-07-20
New Economics Papers: this item is included in nep-gth and nep-mic
Note: This paper was previously circulated with the title “Proximal Approach in Selection of Subgame Perfect Nash Equilibria”
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in Dynamic Games and Applications

Downloads: (external link)
http://www.csef.it/WP/wp476.pdf (application/pdf)

Related works:
Journal Article: Subgame Perfect Nash Equilibrium: A Learning Approach via Costs to Move (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:476

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Maria Carannante (info@csef.it).