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Determining all Nash equilibria in a (bi-linear) inspection game

  • Deutsch, Yael
  • Golany, Boaz
  • Rothblum, Uriel G.
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    This paper addresses a "game" between an inspection agency and multiple inspectees that are subject to random inspections by that agency. We provide explicit (easily computable) expressions for all possible Nash equilibria and verify that none is left out. In particular, our results characterize situations when there exists a unique Nash equilibrium. We also explore special features of the Nash equilibria and the solution of the problem the inspection agency faces in a non-strategic environment.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0377221711005029
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    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 215 (2011)
    Issue (Month): 2 (December)
    Pages: 422-430

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    Handle: RePEc:eee:ejores:v:215:y:2011:i:2:p:422-430
    Contact details of provider: Web page: http://www.elsevier.com/locate/eor

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    1. Kilgour, D.M. & Brams, S.J., 1992. "Putting the Other Side "On Notice" Can Induce Compliance in Arms Control," Working Papers 92-07, C.V. Starr Center for Applied Economics, New York University.
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    5. Hohzaki, Ryusuke, 2007. "An inspection game with multiple inspectees," European Journal of Operational Research, Elsevier, vol. 178(3), pages 894-906, May.
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    7. Alm, James & McKee, Michael, 2004. "Tax compliance as a coordination game," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 297-312, July.
    8. Golany, Boaz & Kaplan, Edward H. & Marmur, Abraham & Rothblum, Uriel G., 2009. "Nature plays with dice - terrorists do not: Allocating resources to counter strategic versus probabilistic risks," European Journal of Operational Research, Elsevier, vol. 192(1), pages 198-208, January.
    9. Reinganum, Jennifer F. & Wilde, Louis L., 1985. "Income tax compliance in a principal-agent framework," Journal of Public Economics, Elsevier, vol. 26(1), pages 1-18, February.
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