Infinite subgame perfect equilibrium in the Hausdorff difference hierarchy

TL;DR

This paper characterizes conditions under which infinite subgame perfect equilibria exist in certain measurable games, extending equilibrium existence results to games with specific discontinuous payoff functions.

Contribution

It provides a characterization of preferences ensuring equilibrium existence in games with outcomes measurable in the Hausdorff difference hierarchy, including a Pareto-optimal equilibrium construction.

Findings

Equilibrium exists for preferences without infinite ascending chains.

Preferences must satisfy a specific non-circularity condition.

Constructed equilibria are Pareto-optimal in subgames.

Abstract

Subgame perfect equilibria are specific Nash equilibria in perfect information games in extensive form. They are important because they relate to the rationality of the players. They always exist in infinite games with continuous real-valued payoffs, but may fail to exist even in simple games with slightly discontinuous payoffs. This article considers only games whose outcome functions are measurable in the Hausdorff difference hierarchy of the open sets (\textit{i.e.} $\Delta^0_2$ when in the Baire space), and it characterizes the families of linear preferences such that every game using these preferences has a subgame perfect equilibrium: the preferences without infinite ascending chains (of course), and such that for all players $a$ and $b$ and outcomes $x,y,z$ we have $\neg(z <_a y <_a x \,\wedge\, x <_b z <_b y)$. Moreover at each node of the game, the equilibrium constructed for the proof is Pareto-optimal among all the outcomes occurring in the subgame. Additional results for non-linear preferences are presented.