Breaking Exponential Complexity in Games of Ordered Preference: A Tractable Reformulation

TL;DR

This paper introduces a polynomial-size reformulation of the necessary conditions for equilibrium in games with ordered preferences, enabling scalable computation beyond previous exponential complexity.

Contribution

It derives a compact, reduced KKT system that preserves key equilibrium conditions and develops an efficient primal-dual interior-point method for solving GOOPs.

Findings

Reduced KKT system size grows polynomially with problem size

Primal solution sets of reduced and complete KKT systems coincide for quadratic GOOPs

Proposed method achieves scalable computation of GOOP equilibria

Abstract

Games of ordered preference (GOOPs) model multi-player equilibrium problems in which each player maintains a distinct hierarchy of strictly prioritized objectives. Existing approaches solve GOOPs by deriving and enforcing the necessary optimality conditions that characterize lexicographically constrained Nash equilibria through a single-level reformulation. However, the number of primal and dual variables in the resulting KKT system grows exponentially with the number of preference levels, leading to severe scalability challenges. We derive a compact reformulation of these necessary conditions that preserves the essential primal stationarity structure across hierarchy levels, yielding a "reduced" KKT system whose size grows polynomially with both the number of players and the number of preference levels. The reduced system constitutes a relaxation of the complete KKT system, yet it remains a valid necessary condition for local GOOP equilibria. For GOOPs with quadratic objectives and linear constraints, we prove that the primal solution sets of the reduced and complete KKT systems coincide. More generally, for GOOPs with arbitrary (but smooth) nonlinear objectives and constraints, the reduced KKT conditions recover all local GOOP equilibria but may admit spurious non-equilibrium solutions. We introduce a second-order sufficient condition to certify when a candidate point corresponds to a local GOOP equilibrium. We also develop a primal-dual interior-point method for computing a local GOOP equilibrium with local quadratic convergence. The resulting framework enables scalable and efficient computation of GOOP equilibria beyond the tractable range of existing exponentially complex formulations.