On the commitment value and commitment optimal strategies in bimatrix games

TL;DR

This paper explores the concept of commitment strategies in bimatrix games, analyzing their properties, relationships with Nash equilibria, and applications to specific game classes like the Traveler's Dilemma, offering insights into their strategic advantages.

Contribution

It introduces and analyzes the notion of commitment optimal strategies in bimatrix games, relating them to Nash equilibria and extending understanding to various game classes.

Findings

Pure commitment strategies form Nash equilibria with best responses.

Strategies in mixed Nash equilibria are generally worse than commitment strategies.

In the Traveler's Dilemma, commitment strategies are more acceptable than Nash equilibrium.

Abstract

Given a bimatrix game, the associated leadership or commitment games are defined as the games at which one player, the leader, commits to a (possibly mixed) strategy and the other player, the follower, chooses his strategy after having observed the irrevocable commitment of the leader. Based on a result by von Stengel and Zamir [2010], the notions of commitment value and commitment optimal strategies for each player are discussed as a possible solution concept. It is shown that in non-degenerate bimatrix games (a) pure commitment optimal strategies together with the follower's best response constitute Nash equilibria, and (b) strategies that participate in a completely mixed Nash equilibrium are strictly worse than commitment optimal strategies, provided they are not matrix game optimal. For various classes of bimatrix games that generalize zero sum games, the relationship between the maximin value of the leader's payoff matrix, the Nash equilibrium payoff and the commitment optimal value is discussed. For the Traveler's Dilemma, the commitment optimal strategy and commitment value for the leader are evaluated and seem more acceptable as a solution than the unique Nash equilibrium. Finally, the relationship between commitment optimal strategies and Nash equilibria in $2 \times 2$ bimatrix games is thoroughly examined and in addition, necessary and sufficient conditions for the follower to be worse off at the equilibrium of the leadership game than at any Nash equilibrium of the simultaneous move game are provided.