Random Extensive Form Games and its Application to Bargaining
Itai Arieli, Yakov Babichenko

TL;DR
This paper analyzes the asymptotic behavior of outcomes in two-player random extensive form games with uniformly random payoffs, proposing a new solution concept for bargaining based on these results.
Contribution
It introduces a novel approach to bargaining solutions by studying the asymptotic distribution of subgame perfect equilibria in random extensive form games.
Findings
Asymptotic distribution concentrates around a point for certain assignments
Characterization of player assignments affecting outcome concentration
Derivation of a new bargaining solution concept from asymptotic analysis
Abstract
We consider two-player random extensive form games where the payoffs at the leaves are independently drawn uniformly at random from a given feasible set C. We study the asymptotic distribution of the subgame perfect equilibrium outcome for binary-trees with increasing depth in various random (or deterministic) assignments of players to nodes. We characterize the assignments under which the asymptotic distribution concentrates around a point. Our analysis provides a natural way to derive from the asymptotic distribution a novel solution concept for two-player bargaining problems with a solid strategic justification.
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Taxonomy
TopicsGame Theory and Voting Systems · Game Theory and Applications · Auction Theory and Applications
