Innovative Dynamics of Bimatrix Games

Innovative Dynamics of Bimatrix Games
Mahdi Rahimi, University of Vienna
November 2, 2009
Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Definition
Heuristic: In games of innovative dynamics, players play

innovative, which means that they don’t imitate but play all
possible strategies, whether in use, known or extinct as long
as it is sufficiently rewarding

Definition
Heuristic: In games of innovative dynamics, players play

innovative, which means that they don’t imitate but play all
possible strategies, whether in use, known or extinct as long
as it is sufficiently rewarding
Heuristic(Hofbauer, Sandholm 2009):If an unplayed strategy is
sufficiently rewarding, then some members of the population
will discover and select it

Definition
(Weibull 1995) For the population dynamics
ẋi = fi (x, y ) ẏj = gj (x, y ) (1)
let Γ1 (x, y ) be the subset of Better than Average pure strategies of

player 1, Γ1 (x, y ) = {i : ai > ā} and respectively Γ2 (x, y ) for player
2.
We call the dynamics innovative if its vector field satisfies the
following axiom:
(IN): If Γ1 (x, y ) 6= ∅ then fi (x, y ) > 0 for some i ∈ Γ1 (x, y ) and if
Γ2 (x, y ) 6= 0 then gj (x, y ) > 0 for some j ∈ Γ2 (x, y ).

Why are innovative dynamics awesome?

More realistic model for rational players


Restpoints are Nash Equilibria(Nash Stationarity)


BNN and PD dynamics are both Lipschitz continuous and
fulfill existence and uniqueness theorem for ODEs


BNN and PD dynamics are both Lipschitz continuous and
fulfill existence and uniqueness theorem for ODEs
Little research done on either of the two dynamics

Innovative Dynamics
Payoff matrices (A,B)
   
a11 a12 · · · a1m b11 b12 ··· b1n
a21 a22 · · · a2m   b21 a22 ··· a2n 
A= . B= .
   
.. .. ..  .. .. .. 
 .. . . .   .. . . . 
an1 an2 · · · anm bm1 bm2 · · · bmn

Innovative Dynamics
   
a11 a12 · · · a1m b11 b12 ··· b1n
a21 a22 · · · a2m   b21 a22 ··· a2n 
A= . B= .
   
.. .. ..  .. .. .. 
 .. . . .   .. . . . 
The payoff for the pure strategy i for player 1 and j of player 2 are
given by
m
X n
X
ai = (Ay )i = aik yk bj = (Bx)j = bjl xl
k=1 l=1

Innovative Dynamics
   
a11 a12 · · · a1m b11 b12 ··· b1n
a21 a22 · · · a2m   b21 a22 ··· a2n 
A= . B= .
   
.. .. ..  .. .. .. 
 .. . . .   .. . . . 
The payoff for the pure strategy i for player 1 and j of player 2 are
given by
m
X n
X
ai = (Ay )i = aik yk bj = (Bx)j = bjl xl
k=1 l=1
The average payoffs ā and b̄ are given by

n
X n X
X m m
X m X
X n
ā = x i ai = xi aik yk b̄ = y j bj = yj ajl xl
i=1 i=1 k=1 j=1 j=1 l=1

Pairwise Difference Dynamics
In general:
n
X n
X
x˙i = xk (ai − ak )+ − xi (ak − ai )+
k=1 k=1
m m (2)
X X
y˙j = yl (bj − bl )+ − yj (bl − bj )+
l=1 l=1

In general:
n
X n
X
x˙i = xk (ai − ak )+ − xi (ak − ai )+
k=1 k=1
m m (2)
X X
y˙j = yl (bj − bl )+ − yj (bl − bj )+
l=1 l=1
For 2 × 2 games:
ẋ = (1 − x)(a1 − a2 )+ − x(a2 − a1 )+
(3)
ẏ = (1 − y )(b1 − b2 )+ − y (b2 − b1 )+

In general:
n
X n
X
x˙i = xk (ai − ak )+ − xi (ak − ai )+
k=1 k=1
m m (2)
X X
y˙j = yl (bj − bl )+ − yj (bl − bj )+
l=1 l=1
For 2 × 2 games:
ẋ = (1 − x)(a1 − a2 )+ − x(a2 − a1 )+
(3)
ẏ = (1 − y )(b1 − b2 )+ − y (b2 − b1 )+
Used first by MJ Smith(1984) for traffic assignment. Also called

Smith-Dynamics by Sandholm(2008)

BNN dynamics
In general:
n
X
ẋi = αi − xi αk
k=1
m (4)
X
ẏj = βj − yj βl
l=1
where αi = (ai − ā)+ andβj = (bj − b̄)+

BNN dynamics
In general:
n
X
ẋi = αi − xi αk
k=1
m (4)
X
ẏj = βj − yj βl
l=1
where αi = (ai − ā)+ andβj = (bj − b̄)+

For 2 × 2 games:
ẋ = (1 − x)2 (a1 − a2 )+ − x 2 (a2 − a1 )+

(5)
ẏ = (1 − y )2 (b1 − b2 )+ − y 2 (b2 − b1 )+

BNN dynamics
Used by Brown-von Neumann(1950) and Nash(1951)

Nash stationarity was of great use for existence proof by Nash

BNN dynamics
Used by Brown-von Neumann(1950) and Nash(1951)

Nash stationarity was of great use for existence proof by Nash
Arrow, Debreu(1953) used it also in an existence proof in
General Equilibrium Theory

Bimatrix Games
2 × 2 games
Generic and Degenerate games
Bimatrix game is generic for 2 × 2 games, if no column of a
payoff matrix is all zero
Overall 14 different classes, while 4 are generic and 10
degenerate

Generic games
Cyclic game: a1 , a2 < 0, b1 , b2 > 0
Figure: Buyer Seller Game for PD and BNN dynamics

Generic games
Figure: Cyclic game for Replicator dynamics and Best-response dynamics

Generic games
Interior equilibrium asymptotically stable

No periodic orbits

Generic games
Coordination game
Figure: Coordination game for PD and BNN dynamics

Two locally asymptotically stable pure equilibria
Interior Nash equilibrium is a saddle

1 degenerate strategy
a1 > a2 and b1 = 0, b1 > b2
Figure: PD and BNN for 1a

1 degenerate strategy
a2 > a1 , b1 = 0, b1 > b2
Figure: PD and BNN for 1b

For PD dynamics all quasi strict Nash Equilibria are stable
and reachable
For BNN dynamics (0, 1) is ω-limit set of all interior orbits
and only stable and reachable Nash Equilibrium

For PD dynamics all quasi strict Nash Equilibria are stable
and reachable
For BNN dynamics (0, 1) is ω-limit set of all interior orbits
and only stable and reachable Nash Equilibrium
All other restpoints of BNN are Nash equilibria but not
reachable

Centipede Game
a1 , a2 < 0, b1 > b2 = 0
Figure: Centipede Game

Centipede Game
Figure: Centipede Game for Replicator dynamics and best-response

Chain-store game
a1 , a2 < 0, b1 < b2 = 0
Figure: Chain-store game

Nash equilibria on degenerate edge all reachable for PD
dynamics

dynamics
But not reachable and stable for BNN dynamics

dynamics
But not reachable and stable for BNN dynamics
For PD dynamics strict Nash equilibrium (0, 0) locally
asymptotically stable
For BNN dynamics perfect Nash equilibrium even globally
asymptotically stable

2 degenerate strategies
0 = a1 < a2 , 0 = b1 < b2
Figure: 2d for PD and BNN dynamics

2 degenerate strategies
0 = a1 < a2 , b1 < b2 = 0
Figure: 2d for PD and BNN dynamics

Analyzing Stability
Linearisation around restpoints does not always work well,

especially with BNN dynamics, where it does not work at all

Analyzing Stability

Stability analyzed through Liapunov functions

Analyzing Stability

Sandholm(2007), MJ Smith(1984) Brown, von
Neumann(1950) and Nash(1951) all gave Liapunov functions
that are of use

Analyzing Stability

Sandholm(2007), MJ Smith(1984) Brown, von
Neumann(1950) and Nash(1951) all gave Liapunov functions
that are of use
Tried to find a quadratic form and use it as a Liapunov
function, which is very useful for generic cases

Analyzing Stability
u2 v2
L(u, v ) = α +β (6)
2 2
with u = x − x̄ and v = y − ȳ .
For PD dynamics α and β can be found by linearization around the
restpoint in each quadrant.

Conclusions
For BNN and PD dynamics all restpoints are Nash equilibria

For both dynamics pure Nash equilibria are asymptotically
stable iff they are strict
Both dynamics have no periodic orbits around the interior
equilibria

Conclusions

equilibria
For PD dynamics all quasi-strict Nash equilibria are reachable,
which bears similarities to the Replicator dynamics

Conclusions

equilibria
For PD dynamics all quasi-strict Nash equilibria are reachable,
which bears similarities to the Replicator dynamics
For the BNN dynamics the perfect equilibria are reachable

Outlook
Behaviour for 2 × 3 and 2 × n games

Behaviour of perfect and quasi-strict equilibria in higher
dimensions. Are they still reachable for the respective
dynamics or not?

Innovative Dynamics of Bimatrix Games

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Mahdi Rahimi, University of Vienna

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Heuristic: In games of innovative dynamics, players play

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Heuristic: In games of innovative dynamics, players play

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

ẋi = fi (x, y ) ẏj = gj (x, y ) (1)

let Γ1 (x, y ) be the subset of Better than Average pure strategies of

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

More realistic model for rational players

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

More realistic model for rational players

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

More realistic model for rational players

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

More realistic model for rational players

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

The average payoffs ā and b̄ are given by

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Used first by MJ Smith(1984) for traffic assignment. Also called

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

where αi = (ai − ā)+ andβj = (bj − b̄)+

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

where αi = (ai − ā)+ andβj = (bj − b̄)+

ẋ = (1 − x)2 (a1 − a2 )+ − x 2 (a2 − a1 )+

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Used by Brown-von Neumann(1950) and Nash(1951)

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Used by Brown-von Neumann(1950) and Nash(1951)

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Cyclic game: a1 , a2 < 0, b1 , b2 > 0

Figure: Buyer Seller Game for PD and BNN dynamics

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: Cyclic game for Replicator dynamics and Best-response dynamics

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Interior equilibrium asymptotically stable

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: Coordination game for PD and BNN dynamics

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

a1 > a2 and b1 = 0, b1 > b2

Figure: PD and BNN for 1a

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: PD and BNN for 1b

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: Centipede Game

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: Centipede Game for Replicator dynamics and best-response

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Figure: Chain-store game

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games

Mahdi Rahimi, University of Vienna Innovative Dynamics of Bimatrix Games