Asymmetric Network Games: $\alpha$-Potential Function and Learning

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Abstract

In a network game, players interact over a network and the utility of each player depends on his own action and on an aggregate of his neighbours' actions. Many real world networks of interest are asymmetric and involve a large number of heterogeneous players. This paper analyzes static network games using the framework of $\alpha$-potential games. Under mild assumptions on the action sets (compact intervals) and the utility functions (twice continuously differentiable) of the players, we derive an expression for an inexact potential function of the game, called the $\alpha$-potential function. Using such a function, we show that modified versions of the sequential best-response algorithm and the simultaneous gradient play algorithm achieve convergence of players' actions to a $2\alpha$-Nash equilibrium. For linear-quadratic network games, we show that $\alpha$ depends on the maximum asymmetry in the network and is well-behaved for a wide range of networks of practical interest. Further, we derive bounds on the social welfare of the $\alpha$-Nash equilibrium corresponding to the maximum of the $\alpha$-potential function, under suitable assumptions. We numerically illustrate the convergence of the proposed algorithms and properties of the learned $2\alpha$-Nash equilibria.