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The path s 0 s n is closed if s 0 s n it

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Unformatted text preview: · · ) is an improvement path. Therefore we have, Φ (s 0 ) < Φ (s 1 ) < · · · , where Φ is the ordinal potential. Since the game is finite, i.e., it has a finite strategy space, the potential function takes on finitely many values and the above sequence must end in finitely many steps. This implies that in finite ordinal potential games, every “maximal” improvement path must terminate in an equilibrium point. That is, the simple myopic learning process based on 1-sided better reply dynamic converges to the equilibrium set. Next week, we will show that other natural simple dynamics also converge to a pure equilibrium for potential games. 19 Game Theory: Lecture 8 Potential Games Characterization of Finite Exact Potential Games For a finite path γ = (s 0 , . . . , s N ), let N I (γ) = ∑ u m (s i ) − u m (s i −1 ), i i i =1 where mi denotes the player changing its strategy in the i th step of the path. The path γ = (s 0 , . . . , s N ) is closed if s 0 = s N . It is a simple closed path if in ad...
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This document was uploaded on 03/19/2014 for the course EECS 6.254 at MIT.

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