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Farkas' Lemma and Complete Indifference

Author

Listed:
  • Florian Herold

    (University of Bamberg, Germany)

  • Christoph Kuzmics

    (University of Graz, Austria)

Abstract

In a finite two player game consider the matrix of one player's payoff difference between any two consecutive pure strategies. Define the half space induced by a column vector of this matrix as the set of vectors that form an obtuse angle with this column vector. We use Farkas' lemma to show that this player can be made indifferent between all pure strategies if and only if the union of all these half spaces covers the whole vector space. This result leads to a necessary (and almost sufficient) condition for a game to have a completely mixed Nash equilibrium. We demonstrate its usefulness by providing the class of all symmetric two player three strategy games that have a unique and completely mixed symmetric Nash equilibrium.

Suggested Citation

  • Florian Herold & Christoph Kuzmics, 2024. "Farkas' Lemma and Complete Indifference," Graz Economics Papers 2024-08, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2024-08
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    References listed on IDEAS

    as
    1. Benjamin Brooks & Philip J. Reny, 2023. "A canonical game—75 years in the making—showing the equivalence of matrix games and linear programming," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(2), pages 171-180, October.
    2. Igal Milchtaich, 2006. "Computation Of Completely Mixed Equilibrium Payoffs In Bimatrix Games," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(03), pages 483-487.
    3. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    4. Herold, Florian & Kuzmics, Christoph, 2020. "The evolution of taking roles," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 38-63.
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    More about this item

    Keywords

    completely mixed strategies; mixed Nash equilibria; Farkas' lemma.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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