6533b833fe1ef96bd129b707

RESEARCH PRODUCT

Existence and Optimality of Nash Equilibria in Inventory Games

Dario BausoRaffaele PesentiLaura Giarre

subject

TheoryofComputation_MISCELLANEOUSComputer Science::Computer Science and Game TheoryNon-cooperative gameMathematical optimizationStochastic gameTheoryofComputation_GENERALInventory control Stability Optimality Nash equilibriumInventory control; Nash equilibrium; Optimality; Stability;symbols.namesakeNash equilibriumBest responseRepeated gamesymbolsEconomicsCoordination gameEpsilon-equilibriumRisk dominanceMathematical economics

description

Abstract This paper studies the stability and optimality of a distributed consensus protocol for n -player repeated non cooperative games under incomplete information. At each stage, the players choose binary strategies and incur in a payoff monotonically decreasing with the number of active players. The game is specialized to an inventory application, where fixed costs are shared among all retailers, interested in whether reordering or not from a common warehouse. The authors focus on Pareto optimality as a measure of coordination of reordering strategies, proving that there exists a unique Pareto optimal Nash equilibrium that verifies certain stability conditions.

http://hdl.handle.net/10447/14428