CFDP 1377

Best Response Equivalence

Author(s): 

Publication Date: July 2002

Pages: 31

Abstract: 

Two games are best-response equivalent if they have the same best-response correspondence. We provide a characterization of when two games are best-response equivalent. The characterizations exploit a dual relationship between payoff differences and beliefs. Some “potential game” arguments (cf. Monderer and Shapley, 1996, Games. Econ. Behav. 14, 124-143) rely only on the property that potential games are best-response equivalent to identical interest games. Our results show that a large class of games are best-response equivalent to identical interest games, but are not potential games. Thus we show how some existing potential game arguments can be extended.

Keywords: 

Best response equivalence; Duality; Farkas’ Lemma; Potential games

JEL Classification Codes:  C72

Note: 

Published in Games and Economic Behavior (November 2004), 49(2): 260-287 [DOI]