On the solution of games with arbitrary payoffs: An application to an over-the-counter financial market

Iraklis Kollias, John Leventides and Vassilios Papavassiliou

No 202302, Working Papers from Geary Institute, University College Dublin

Abstract: This paper defines a variety of game theoretic solution concepts in the language of soft set theory. We begin by defining the Nash equilibrium in pure strategies. We assume that the gains of the players are totally ordered and non-desirable alternatives are absent. Moreover, we introduce the notions of strong and semi-strong utility. These two completely new notions, serve as a mechanism for converting non-ordered gains into totally ordered ones. We define the Nash equilibrium in mixed strategies in a general framework by introducing the notion of an extended game and strategy space. We finally define the Nash solution to cooperative bargaining games within the framework of soft set theory, illustrate a practical application to an over-the-counter (OTC) financial market, and provide a detailed numerical example

Keywords: Game theory; Soft set theory; Nash equilibrium; Cooperative bargaining games; Over-the-counter financial markets; Financial intermediation (search for similar items in EconPapers)
JEL-codes: C6 C7 G1 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2022-01-05
New Economics Papers: this item is included in nep-gth and nep-upt
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Journal Article: On the solution of games with arbitrary payoffs: An application to an over‐the‐counter financial market (2024)
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