Game Theory
Papers
Fresh from arXiv, typeset properly. Highlighted words trade on the market.
Tuesday 11 August
We study a noncooperative resource-allocation game in which $m$ players distribute fixed resources among $n$ projects and the payoff of player $j$ is given by \[ F^j(x) = \sum_{i=1}^n \frac{a_i x_i^j}{b_i+\sum_{\ell=1}^m x_i^\ell}, \] where $a_i$ and $b_i$ are project parameters, while $x_i^j$ is the amount of resources player $j$ allocates to project $i$. This specification combines diminishing returns with congestion generated by competitors. We prove that the game has a unique Nash equilibrium and characterize it by an equimarginal principle. We show that, after the projects are ordered by $a_i/b_i$, each player invests in an initial segment of projects, and these segments are nested across players, so the equilibrium decomposes into consecutive activity zones; players with larger resources invest weakly more in every project. In the fully active regime, where every player invests in every project, we reduce the equilibrium to a single scalar nonlinear equation for the aggregate marginal-utility rate; all individual marginal rates, investments, and payoffs then follow from explicit formulas. We also provide a projected marginal-utility algorithm with global linear convergence under an explicit step-size condition, together with a structure-exploiting Block Pandora algorithm that reconstructs and certifies the equilibrium conditional on a proposed nested cutoff structure.
Monday 10 August
Game Theory
Resolving Envy by Adding Goods with Bounded Supply: A Type-Count Dichotomy and Two-Agent Hardness
We study envy elimination by adding goods (EEAG) when the additional pool has bounded supply and no separate budget bound. We establish a sharp type-count dichotomy for binary additive valuations. With one additional item type, EEAG is polynomial-time solvable for any number of agents. More generally, our algorithm permits arbitrary nonnegative integer per-copy values. The envy constraints form a system of difference constraints, and Bellman–Ford returns the componentwise least feasible extension. In contrast, with exactly two additional item types, EEAG is NP-complete even when both types have positive finite supply and the approvers of one type form a subset of the approvers of the other. This closes the two-type case left open by Bentert et al. Separately, we prove weak NP-completeness even for two agents with identical additive valuations, one initially endowed good, and a growing number of unit-supply item types. Thus, bounded-supply hardness appears both with two item-types and many agents and with two agents and many item-types.
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Game Theory
Competitive mediator games and urban CAV routing markets
Inspired by possible future markets of autonomous routing and driving (ARAD), we introduce competitive mediator games and their equilibria which generalize the (coarse) correlated equilibria, which have become a popular research area recently as they not only can be more socially efficient than Nash equilibria but also are limits of algorithmic no-regret multi-agent learning dynamics. We discuss the basic properties of competitive mediator games and prove that in the generic setting of anonymous congestion(routing) games with market-share maximizing mediators all competitive mediator equilibria are monopolies whenever one of the mediators is weakly preferred to other mediators by all users. We apply and interpret these results in the context of new markets of competing ARAD service providers. We also provide a comprehensive overview of these markets and discuss the future mechanism design thereof.
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Game Theory
Algorithmic Asymmetry in Zero-Sum Games: Unilateral Recovery of Fast Convergence Against a Slow Opponent
Learning dynamics in zero-sum games are typically analyzed under algorithmic symmetry: both agents use the same update rule, or methods from a common algorithmic family. This is at odds with the nature of zero-sum games; competing agents need not coordinate on algorithm selection. This paper studies algorithmic asymmetry in learning dynamics in zero-sum games. In particular, we ask whether fast convergence can be recovered when one agent is fixed to vanilla gradient descent, whose standard regret-based analysis certifies, at best, $O(1/\sqrt{T})$ ergodic convergence. We show that the slow rate is not intrinsic. When one agent uses gradient descent, the opposing agent can use a modified optimistic update, which we call Alternating Optimistic Gradient Descent (AOGD), to make the joint dynamics simulate Alternating Gradient Descent on the even iterates. As a result, the time-average of the asymmetric GD vs.\ AOGD dynamics converges to Nash equilibria at rate $O(1/T)$. Our results show that fast convergence need not require coordinated algorithm selection: one agent can compensate for a slower opponent. More broadly, the paper highlights algorithmic asymmetry as a useful lens for understanding cross-class interactions in multiagent optimization.
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Game Theory · Cross-listed from cs.AI
Avalon-ToM-Bench: Evaluating Fine-Grained Theory of Mind via Asymmetric Game Mechanics
Theory of Mind (ToM) is essential for agent interactions, yet existing evaluations either rely on static scenarios that oversimplify mental-state reasoning or interactive settings that provide limited diagnostic insight. We present Avalon-ToM-Bench, a fine-grained benchmark that operationalizes ToM through the asymmetric-information mechanics of The Resistance: Avalon. Rather than evaluating end-to-end gameplay, it decomposes ToM into a 2$\times$2 taxonomy – epistemic versus motivational reasoning crossed with inference versus action – using human-crafted, perspective-constrained queries. Benchmarking 28 LLMs reveals three insights: 1) Reasoning, not knowledge. Models show strong game-rule comprehension but markedly weaker ToM abilities, isolating failures to social reasoning rather than missing domain knowledge. 2) Expression, not representation. Mechanistic analyses via linear probing and activation steering show that models frequently represent correct mental-state inferences in their hidden states but fail to express them during generation – linear probes recover 77-82% accuracy versus 62-70% from the models' own chain-of-thought. 3) Policy, not deliberation. Dedicated reasoning training yields substantial improvements whereas test-time chain-of-thought provides only marginal gains (+11.0 versus +1.1 points on average), suggesting that robust ToM depends on a learned reasoning policy rather than increased inference-time deliberation.
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Game Theory · Cross-listed from cs.AI
ICM Out! Better Tournament Strategy from Computed Continuations, vs. Solvers and LLMs
The Independent Chip Model (ICM) converts tournament chips into reference prize equity, and policies are routinely constructed against those values. Because ICM reads only stack sizes, it omits action order, blind obligations, and seat rotation, and it does not price the elimination pressure a big stack puts on the short stacks it can bust. Those omissions can alter the successor-state contrasts that determine a move. We introduce Strategic-Continuation Optimization (SCO), a policy-construction method that enumerates current-hand outcomes, maps them to successor states, prices those states with continuation values computed from the finite tournament model, and optimizes and freezes the resulting current-hand policy. The fixed-ICM comparison policy changes one thing only: the same optimizer solves the same game with successor states priced by analytic ICM, so the two policies differ only through that pricing. We evaluate the resulting policies in a three-player jam/fold tournament with a \$1M prize pool. Relative to the frozen strategic-continuation benchmark, analytic ICM has \$9{,}036 mean absolute value error across all 2,838 state–seat entries. That value error rewrites the ranges it prices: measured against each decision point's own fixed-ICM jam range, SCO moves the jam frequency by an average of 14.08%. To price those different moves, we compare all 946 states and three policy owners while changing only the focal policy and holding both opponents and the continuation evaluator fixed. The policy produced by SCO earns \$214.33 more prize equity per hand on average and is favored in 2,433 of 2,838 matched units. The ordering survives replacing the solver-built opponent with two LLMs and with a family of non-modeling threshold players. This value-to-policy-to-cost chain shows directly when ICM becomes an inadequate objective for tournament strategy construction.
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Game Theory
Balanced Fair Division for Three Agents under General Valuations and Laminar Constraints
We study fair allocations of indivisible items under general set valuations. We prove that every instance with three agents and arbitrary real-valued valuations admits a balanced allocation that is envy-free up to one good and one chore (EF$1^c_g$). This directly implies balanced EF$1$ when each valuation is either monotone nondecreasing or monotone nonincreasing. We also show that balanced EF$1$ cannot be guaranteed without monotonicity: there exists an instance with three agents, nine items, and identical nonmonotone valuations that admits no balanced EF$1$ allocation. We then consider a common laminar matroid constraint. Whenever a complete feasible allocation exists, we prove that there is a complete feasible allocation that is balanced and envy-free up to two goods and two chores (EF$2^c_g$) for arbitrary valuations. The allocation can additionally be chosen so that the numbers of items from every laminar set assigned to the three agents differ by at most two. Most proofs in this paper were obtained using GPT-5.6. We subsequently verified the proofs for correctness and refined their exposition and arguments, also with the aid of GPT-5.6.
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Game Theory
Regret, equilibrium, and learning in games: A guided tour
This note aims to serve as an entry point to the literature on learning in games, a topic with significant theoretical appeal and a wide range of applications – from machine learning and data science to economics and beyond. Our presentation is structured around two complementary viewpoints: We first consider a single agent – the learner – engaged in a sequential decision process in an unknown, non-stationary, and possibly adversarial environment. We then examine what happens when the environment is shaped by the decisions of several interacting agents, not necessarily aware of each other's actions or goals, and all seeking to improve their individual rewards. In this general context, we examine a family of regularized learning policies based on best-responding to the past history of play, up to a regularization penalty intended to encourage exploration and prevent over-commitment to suboptimal choices. In the single-agent setting, we present some basic regret bounds for regularized learning in adversarial multi-armed bandits; in the multi-agent setting, we describe an ergodic equilibrium convergence result for zero-sum games in the spirit of classical results on fictitious play, as well as a "folk theorem" linking strategic and dynamic notions of stability – Nash equilibria and attracting points of regularized learning, respectively. We pay special attention to the information available to the players and, through a unified analysis framework, we study both oracle- and payoff-based (bandit) methods. Our goal is to provide a coherent and comprehensible – albeit, by necessity, not comprehensive – account of some recent ideas in the field, and to discuss their implications for the study of rationality.
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Game Theory · Cross-listed from cs.DS
A New Lower Bound for Online Vertex Cover under Vertex Arrivals
We prove that no randomized integral or fractional algorithm for online vertex cover under general vertex arrivals achieves a competitive ratio strictly below $1+\sqrt{e}/2\approx1.824360635$, even on bipartite graphs and against an oblivious adversary. This improves the previous lower bound of approximately $1.753$. Our proof extends the complete-bipartite alternating construction of Wang and Wong to an arbitrary number of alternations. The resulting adversary is described by a monotone integral recurrence. If the recurrence never violates the competitive budget, its iterates converge to an integrable fixed point; classifying all such fixed points forces the excess ratio to be at least $\sqrt{e}/2$. A truncated discrete recurrence and a Riemann-sum argument convert every strict continuous violation into a finite, algorithm-dependent but realization-oblivious input. We also exhibit a critical fixed point showing that $1+\sqrt{e}/2$ is the exact limit of this homogeneous complete-bipartite recurrence, rather than a numerical artifact.
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Game Theory
Breaking the 4-Approximation Barrier in Strategyproof Two-Facility Location
We study strategyproof mechanism design without transfers for the two-facility location problem in metric spaces. A mechanism selects two facility locations based on agents' reported locations; each agent incurs her distance to the nearer facility, and the objective is to minimize the expected social cost. A mechanism is strategyproof if no agent ever benefits from misreporting her location. The best approximation ratio achieved by a randomized strategyproof mechanism has been $4$, attained by the Proportional mechanism of Lu, Sun, Wang, and Zhu (EC 2010), and the best lower bound has been $1.045$, due to Lu, Wang, and Zhou (WINE 2009). Neither bound has moved since then, even on the line $\mathbb{R}$. We improve both bounds. Our main result is a randomized strategyproof mechanism with approximation ratio $11/3 \approx 3.667$ on every Ptolemaic metric space, a rich class containing all Euclidean spaces. The mechanism randomizes between the Proportional mechanism and a new mechanism that we call Global Pair. Global Pair draws an unordered pair of agents with probability proportional to their distance and opens facilities at their reported locations. Although Global Pair and Proportional each have approximation ratio $4$, the two mechanisms attain their worst-case approximation ratios on complementary instances. Randomizing between them balances these complementary weaknesses and breaks the $4$-approximation barrier. On the lower-bound side, we construct a new two-profile instance that yields a lower bound of $(1+\sqrt{2})/2 \approx 1.207$, improving upon the previous lower bound of $1.045$.
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Game Theory
Repeated-Game Security for Restaking-Based Verifiable Inference
Restaking-based protocols enable verifiable LLM inference without the high proving cost of zkML or the hardware trust assumptions of TEEs. Their security is commonly justified by a one-round slashing condition: a rational provider should not cheat when the expected penalty exceeds the cost saving from dishonest inference. This paper shows that this condition can overstate security when inference is supplied repeatedly under the same stake. We model verifiable inference as a discounted repeated game and identify a repeated-game gap caused by proportional slashing: detected deviations reduce future penalty exposure, while cost savings are earned again across queries. We derive the gap in closed form, show that it persists under minimum-stake ejection, and extend it to memoryless bounded-slashing protocols covering deployed designs. We propose a deployable mechanism combining history-dependent challenges, reputation-weighted slashing, and stake vesting. The mechanism restores infinite-horizon subgame-perfect incentive compatibility against stationary mixed-strategy deviations above an explicit discount-factor threshold without per-query cryptographic verification. Evaluation across nine open-weight model pairs from 0.5B to 14B parameters shows that the audit signal has the required concave detectability response. A Stackelberg audit-budget analysis shows that improved signal responsiveness reduces the baseline audit rate by 2.6x at discount factor 0.95. Calibrated to deployed parameters, surveyed protocols pass one-round incentive compatibility but admit repeated-game deviations for discount factors between 0.92 and 0.98, with deviation-profit fractions of 1.5%–8%. Our mechanism reduces deviation profits by 31%–54% while maintaining low-latency economic verification.
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Game Theory
Decision-Focused Learning in Network Interdiction Games
We study decision-focused learning (DFL) in shortest-path network interdiction (SPNI) games, a Stackelberg game where an interdictor (leader) strengthens the networks' arcs against attacks, while an evader (follower) who is uncertain about costs of attacking network arcs relies on a machine-learned predictor to identify the shortest path. While DFL is highly effective as an end-to-end optimization framework, we show that it faces a fundamental structural failure when employed in this game setting: its training objective admits a broad decision-equivalence class of cost estimators that achieve zero nominal loss yet fail under interdiction, reversing DFL's usual advantage over a naive prediction-focused learning (PFL) approach. To address this, we propose Adversarial DFL (A-DFL), which replaces nominal training samples with interdicted scenarios to collapse the harmful equivalence class. Experiments on synthetic and real-world networks confirm that A-DFL restores DFL's advantage in this game setting, enabling effective end-to-end optimization.
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Game Theory
Best-of-Both-Worlds Fairness and Pareto Optimality
We consider fair allocation of indivisible items among agents with non-negative and additive valuations. The goal is to construct a lottery over deterministic allocations whose induced fractional allocation is envy-free, while every realised allocation is envy-free up to one item and Pareto optimal. We show that this is always possible for two agents. We then prove a stronger result that there always exists a lottery over deterministic allocations whose induced fractional allocation is envy-free, while every realised allocation is envy-free up each one item (EFX) and Pareto optimal. For non-negative integral additive valuations, such a lottery can be computed in pseudo-polynomial time. We also prove that for three agents and four items, there may be no ex-ante envy-free lottery that can be supported on allocations that are simultaneously EFX and Pareto optimal.
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Sunday 9 August
Game Theory
Voting Method Synthesis on an Infinite Domain: A Possibility Theorem for Positive Involvement
A common problem in social choice is to determine whether there is a social choice procedure, such as a voting method, satisfying some desired criteria. Computer-aided methods such as SAT solving can sometimes answer these questions. However, under typical encodings, a SAT solver may only synthesize a voting method on a finite domain, while we may want one on an infinite domain, such as the domain of all preference profiles for a fixed number of candidates but any finite number of voters. In this paper, we use an approach based on reasoning with constrained Horn clauses and computation with polyhedra to synthesize a voting method on an infinite domain. We then use SMT and Lean to verify its properties. Our main result is a possibility theorem about four well-known criteria from voting theory: the Condorcet winner and loser criteria, positive involvement, and resolvability. Previous work has shown that for five or more candidates, there is no voting method satisfying these axioms, and that for four candidates, there is no method satisfying these core axioms plus one more invariance axiom. Here we show that for four candidates, there does exist a method satisfying the core axioms and more.
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Game Theory
A Simple Polynomial-Time EFX Repair for Cancelable Valuations
The leximin++ proof of Plaut and Roughgarden for agents with identical monotone valuations gives a natural EFX-repair procedure: starting from an arbitrary partition, repeatedly transfer an eligible item to a minimum-valued bundle. The procedure terminates, but the standard argument gives no polynomial bound on the number of transfers, even for additive valuations. We show that a single deterministic tie-breaking rule makes this repair procedure polynomial for the broader class of cancelable valuations. Fix an ordering of the items consistent with their singleton values and always transfer the highest-ranked eligible item. Consecutive transferred items strictly decrease in this ordering, and hence the algorithm performs at most $m$ transfers, where $m$ is the number of items. Moreover, the repair procedure does not decrease the minimum bundle value or increase the maximum bundle value. As an application, for every fixed $\varepsilon>0$, we compute in polynomial time an allocation of restricted additive chores that is simultaneously EFX, $(1+\varepsilon)$-MMS, and a $2$-approximation to the optimal social cost. This improves upon the previous polynomial-time $4/3$-MMS guarantee. Finally, we exhibit a monotone cancelable ordering on five items with no additive representation, showing that the extension beyond additivity is genuine.
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Game Theory
Kernel Methods for Refined Prophet Inequalities
The single-selection prophet inequality is a canonical Bayesian online selection problem in which independent nonnegative values arrive sequentially and the decision-maker must irrevocably select at most one. Classical single-threshold guarantees are tight in the worst case, but the hard instances that prove tightness are highly irregular: the prophet's advantage is driven by rare, very large realizations of the maximum. We refine this worst-case picture by imposing a bound on the relative variance of the prophet's value, $\mathrm{Var}(\max_{i\in[n]}X_i)/\mathbb E[\max_{i\in[n]}X_i]^2$. This yields a nonparametric complexity measure that interpolates between deterministic instances, where the full prophet value can be recovered, and the unrestricted worst-case regime. Our main technical contribution is a general kernel method for single-threshold prophet inequalities. The method represents an instance by the quantile function of the maximum and rewrites the payoff of a threshold as a linear kernel functional of this quantile. This turns the worst-case analysis into an infinite-dimensional convex program, restores strong minimax duality in quantile space, and reduces the bounded-variance adversary's problem to a one-parameter variational family. Applying this framework, we obtain an exact characterization of the IID bounded-variance curve and asymptotically optimal finite-horizon thresholds, a closed-form expression for the fixed-order non-identical model, and a prophet-secretary lower-bound program together with a strict separation from the IID benchmark at every positive finite variance constraint. As a further application of the same kernel viewpoint, we derive an exact formula for IID random horizons under a convexity condition on the horizon pgf, which includes monotone-hazard-rate horizons, highlighting the broad applicability of this new technique for single threshold settings.
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Game Theory
Complete EFX Allocations Exist for Four Additive Agents and Up to Nine Goods
We prove that every fair-division instance with four agents, additive valuations over the non-negative reals, and at most nine indivisible goods admits a complete allocation that is envy-free up to any good in the strong, zero-tolerant sense ($\EFXo$). The case $m=9=n+5$ lies beyond the previously known frontier for complete EFX with four agents ($m\le n+3$). The proof combines a small set of hand-proven reduction lemmas with a machine-verified certificate corpus. The valuation polytope is covered by a collection of smaller polytopes. For each smaller polytope $P$, a family $F$ of allocations is found that contains an $\EFXo$ allocation for every valuation in $P$. The check that $F$ suffices for $P$ is a quantifier-free linear-arithmetic unsatisfiability verdict, re-derived and solved from scratch by an independent certifier, corroborated per clause, and re-verifiable by a independent small third implementation. The $m=8$ case is established twice: by an earlier independent project at that size and as a one-paragraph padding corollary of the $m=9$ theorem. We additionally give a possible explanation why the problem is hard: difficulty concentrates on near-identical valuations, where only ${\approx}0.14\%$ of all $4^9$ allocations are $\EFXo$, and explicit valuation pairs inside a single region force opposite mandatory allocation structure, evidence relevant to the general conjecture independently of any solver stack.
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Game Theory
Detecting Collusion in Peer Review: Drawing Inspiration from VCG Principle
The peer-review process, the bedrock of scientific advancement, is increasingly undermined by sophisticated collusion rings that systematically manipulate review outcomes to favor in-group members. While existing detection methods struggle to untangle obfuscated social ties in explicit co-authorship graphs, we introduce a new direction: Exclusion Based Anomaly Detection. Similar to the way VCG auctions work, we formally measure the marginal influence of suspected reviewer groups, exposing their signature even when explicit social graphs are hidden. To apply this at scale without prior knowledge of colluding groups, we introduce the Embedding Based Discovery Framework, which leverages continuous semantic embeddings to isolate latent collusive communities directly from their semantic profile, bypassing the adversarial limitations of explicit network analysis. Unlike traditional heuristic-based approaches, our framework functions as an automated auditor, requiring no prior knowledge of group membership. It achieves this by executing a decoupled search across independent diagnostic algorithms and combining their findings into distinct consensus formations, allowing organizers to dynamically balance detection precision and recall. Evaluating our technique with large-scale datasets (based on ICLR 2021) shows our method's capacity to identify both overt and subtle adversarial tactics with high sensitivity and strict Family-Wise Error Rate (FWER) control, effectively providing conference organizers with a scalable, robust, and privacy-preserving tool to secure the scientific integrity of academic publishing.
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Game Theory
Does a Toehold Make a Bidder Bolder? Preemption and Multiplicity in Multi-Round Takeover Auctions
A bidder can quietly buy a stake in a company before making an offer for it. That stake, a toehold, is supposed to pay for itself twice: it makes the bidder willing to bid harder, and it frightens rivals into staying out of the fight. The first effect is arithmetic. The second is what would justify the cost and exposure of taking one at all. Yet toeholds are rare in practice, a standing puzzle. We ask whether that second effect is there once the contest is modelled as several rounds of escalating offers rather than the single exchange classical models assume. We turn it into a game a computer can solve, and certify the answers to an accuracy a referee can check. Three findings. The auction fixes what the toehold-holder earns but not how it bids: the same contest supports a bidder who opens aggressively against a rival who folds, and one who opens cheaply against a rival who does not, with the same profit either way. Aggressive preemptive bidding still appears when the toehold is removed entirely, so it comes from bidding in public and in turns, not from owning the stake. And the tidy "bigger toehold, more deterrence" relationship holds only in a contest cut short after one round; give it a real second round and it stops responding. So the two reasons to buy a toehold do not fare alike. The profit reason holds up; the deterrence reason does not, which suggests why toeholds may be rarer than theory predicts, alongside the procedural costs of disclosure and price impact that this model omits. A warning follows for anyone computing economics from a game solver: solve this auction once and it returns a confident figure for what a preemptive bid is worth; solve it again from a different start and it returns a different one, equally converged. We also report which solvers cope with contests of this shape, including versions too large to enumerate. Code is released.
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Game Theory · Cross-listed from econ.TH
From Product Search to Preference Articulation: The Economics of Agentic Commerce
Generative AI is shifting digital commerce from browsing toward agentic search, in which consumers delegate product discovery to AI agents. We compare manual search, which accurately evaluates a limited product set, with agentic search, which screens a broad catalog through noisy representations of preferences and products. Preference complexity is the number of satisfaction-relevant dimensions that are difficult to articulate before search but readily evaluated upon inspection. Consumers have finite attention and choose search intensity: products inspected manually or preference-refinement depth with an agent. We obtain three findings. First, manual search collapses beyond a finite complexity threshold: inspection ceases, mismatch reaches the no-search benchmark, and platform revenue falls to zero. Agentic search avoids this collapse. Once refinement becomes worthwhile, it remains worthwhile as complexity rises; mismatch stays below the no-search benchmark and revenue remains positive, although articulation effort and mismatch may increase. Second, platforms rank the regimes by conversion revenue, whereas consumers also bear search expenditure. When manual inspection is sufficiently inexpensive, agentic search becomes revenue-superior before consumers voluntarily adopt it, creating an adoption lag in which consumers rationally continue manual search. Third, conditional on agentic participation, platforms may assign lower fidelity to consumers with larger attention budgets because they can offset noisier representations through additional refinement, yielding an inverted fidelity allocation. Agentic commerce thus shifts scarcity from product inspection to preference articulation, making consumers' willingness and ability to interact central to voluntary use and platform fidelity design.
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Saturday 8 August
Game Theory · Cross-listed from math.OC
Learning under Opponent Unawareness in Linear-Quadratic Stochastic Games
As firms increasingly deploy machine learning for strategic decision-making, understanding algorithmic interactions has become central to operations research and economics. This paper studies learning in infinite-horizon, nonzero-sum linear-quadratic stochastic games under a radically uncoupled information structure, where players are either unaware of opponents or strategically oblivious, observing only a common state and their own action history. Under this minimal information, we analyze an asynchronous decentralized learning process in which each player independently runs a single-agent $\epsilon$-greedy iterated least-squares algorithm. We prove that, despite being unable to identify the system parameters, players' learning dynamics converge almost surely to the complete-information Nash equilibrium and characterize the convergence rate. We then apply the framework to a dynamic Cournot competition with sticky prices. Numerical experiments validate the theoretical results and show that learning under limited information reduces firm profits under both low and high price stickiness, while total surplus declines and market concentration increases when price stickiness is high. Publicly revealing aggregate market output substantially accelerates convergence and mitigates these welfare losses.
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Game Theory · Cross-listed from cs.AI
A Fair Objective for Human-Empowerment-Preserving AI: Desiderata, Design, and Likely Behavioral Consequences
This paper explores the idea of promoting well-being and safety in human-AI interactions by forcing AI agents explicitly to empower humans and to manage the power balance between humans and AI agents in a desirable way. Using a principled, partially axiomatic approach based on desirable properties, we design a parametrizable and decomposable objective function for AI systems that represents an inequality- and risk-averse long-term aggregate of human power. It can take into account models of human bounded rationality and social norms, and crucially, considers a wide variety of possible human goals. We prove how certain desiderata enforce particular functional forms and restrict parameter ranges. We exemplify the consequences of softly maximizing this metric in several paradigmatic situations and describe what instrumental sub-goals it will likely imply.
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Game Theory
Existence and computation of monomial families of near-optimal strategies for recursive games
In a finite recursive game in the sense of Everett, both players have stationary epsilon-optimal strategies for every epsilon>0. Frederiksen and Miltersen strengthened this result by showing that the strategies for all sufficiently small epsilon can be encoded by finitely many monomials: at every state, all but possibly one of the action probabilities are constants times integer powers of epsilon. The resulting finite symbolic object specifies a strategy for every sufficiently small accuracy. Their proof uses semialgebraic selection and Puiseux series. We give an alternative elementary proof of this regularity theorem for recursive games. We start with stationary strategies that guarantee vectors approaching the value through Everett's one-sided region. After fixing their support, we express, for each pure stationary reply, all absorption probabilities as quotients of directed-forest polynomials with nonnegative coefficients and a common positive denominator. Each payoff is a fixed signed linear combination of these quotients. We then compress the asymptotic orders of the finitely many forest monomials into one integer weight vector. This proof uses neither semialgebraic selection nor Puiseux series. Furthermore, for rational games with a fixed number N of active states, we present a deterministic polynomial-time algorithm that computes a monomial family exactly. It returns all algebraic coefficients in one ordered real univariate representation. The representation length and running time are at most L^{(N+1)^{O(N)}}, where L is the input length.
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Game Theory
Indirect Geoeconomic Influence: A Switching Dynamical Systems Framework for Mechanism Design
We develop a formal framework for analyzing indirect geoeconomic influence. The influencing state (sender) does not attempt to change a target nation's policy directly. Instead, the sender restructures the target's internal political economy so that its own citizens, firms, and institutions generate the compliance pressure. The framework rests on a switching dynamical system (SDS) in which a target's political economy evolves under mode-dependent rules. We analyze two modes: a permissive mode, in which a mechanism transmits pressure toward the sender's preferred policy, and a contested mode, entered naturally once the target detects and attributes the mechanism. Crucially, the sender's mechanism design shapes the transition into the contested mode. Our approach inverts the usual regime-switching problem in which analysts estimate a latent transition kernel from data. The indirect influence approach is to have the designer engineer a kernel to steep regime occupancy over a planning horizon. A structured switch vector decomposes any mechanism along discrete design dimensions, and a combinatorial optimizer searches this space for high-performing archetypes scored on compliance, time-to-threshold, and a durability ratio. We characterize mode-conditional equilibria and derive comparative statics on credibility and legibility, showing that the legibility penalty is scaled by the salience of the government channel and interacts with the mechanism's cost incidence. We illustrate the framework with two stylized mechanisms and report a two-part proof of concept: a simulation of 972 archetypes, and a fully crossed study of the pipeline's optional generative stage in which language models write and blindly classify candidate instruments for archetypes.
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Friday 7 August
Game Theory
EBGT: Epistemology-aided Bayesian Game Theory for Uplink Power Control in Stochastically Distributed IoT Tiers
Uplink power control in dense, heterogeneous Internet-of-Things (IoT) tiers is fundamentally limited by incomplete channel-state information (CSI) and mutual interference, while low size, weight, and power (SWaP) devices cannot afford the feedback and computation of conventional distributed schemes. This paper proposes EBGT, an epistemology-aided Bayesian game-theoretic framework for decentralized uplink power minimization in stochastically distributed IoT networks. Interfering users are modeled as spatially random through a Poisson point process (PPP), and each device reasons about its rivals through a two-layer belief hierarchy of inter-epistemic beliefs about opponents and intra-epistemic self-assessment, so that the transmit-power equilibrium is reached without repeated inter-node feedback. We derive a closed-form coverage-probability payoff via stochastic geometry and quantify belief convergence toward equilibrium using the Jensen–Shannon divergence (JSD) of the resulting power distributions. Monte-Carlo simulations validate the analytical coverage expressions and show that EBGT sustains the target coverage probability while reducing transmit power relative to fixed power control (FPC) and stochastic non-cooperative power control (SNCPC) baselines, particularly under stringent SINR and high-density regimes.
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Game Theory
Bayesian Fair Division: Truthfulness in Picking Sequence with Correlated Valuations
Sequential allocation mechanisms contain a class of widely studied mechanisms (e.g., round-robin) in the fair division of indivisible goods, where agents take turns picking items in a predefined picking order. It is known that the sequential allocation mechanisms are not truthful: when an agent's most preferred item is not valued by others, the agent may manipulate the mechanism by choosing to defer picking that item and instead competing for another slightly less preferred item that is valued by others. Two underlying reasons are that each agent has perfect knowledge of the others' valuations, and each item's value to each agent can differ significantly. Will the mechanism be more truthful when each agent only has partial information about the others' valuations, which are known to be roughly consistent? This naturally motivates the study of the Bayesian fair division model. In this paper, we answer this question affirmatively for two agents. Under the Bayesian model, we precisely characterize the extent of this “rough consistency” that incentivizes agents' truth-telling. In particular, we show that for the case of two agents, when the valuations are positively correlated, truth-telling forms a Bayesian Nash equilibrium under the sequential allocation mechanisms. However, we show that truthfulness fails to extend to the setting with more than two agents. For more than two agents, we reveal a new type of manipulation that is different from the above-mentioned manipulation that defers a highly valued but less competitive item. Our result reveals a fundamental limitation on the truthfulness of sequential mechanisms.
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Game Theory
Analyzing the Interaction of Optimal Strategies in Mean-Payoff Bidding Games
A common assumption when designing an agent in a multi-agent system is that the other agents behave adversarially. This allows a designer to obtain the strongest guarantees when they have no control over nor knowledge about the other agents' behavior. However, when all agents are designed under this adversarial assumption, their actual interaction is not adversarial (e.g., when all players play defensively, no player actually attacks). In such settings, we would like to know what behavior arises in the multi-agent system. However, analyzing the interaction among agents is notoriously challenging, both mathematically and algorithmically. In this paper, we provide such an analysis, focusing on bidding games, played by two agents on a graph as follows. A token is placed on a vertex, and in each turn an auction (bidding) determines which agent moves the token, thus generating an infinite path that determines the agents' utilities. We consider mean-payoff objectives; each vertex is associated with a reward for each player, and the utility in an infinite play is the limit average of the rewards. We analyze the play that is generated when each agent follows a strategy that optimizes against an adversary, and consider the two known explicit constructions of optimal strategies. The technical challenge stems from the infinitely-many configurations of a bidding game and their complicated dynamics. We show that, under some restrictions, the generated play is ultimately periodic, and develop algorithms to compute the players' utilities in it.
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Game Theory
Algorithmic Threshold Optimization: Quantitative Modeling of Multiplier Distributions in Crash Games
Crash is a widely played casino game that blends strategic decision-making, probability, and computational analysis, particularly from the perspective of the house. This paper presents an optimization algorithm aimed at minimizing the casino's guaranteed positive earnings while simultaneously maximizing the number of players who win some amount during a given round. Since Crash is inherently a multiplayer game, players place random investment amounts at different points in time, which makes it difficult for any individual player to judge, before the round even begins, whether their intended investment is comparatively high or low, and consequently, how much risk they are actually taking on. The core objective of the proposed algorithm is to determine an optimal stopping multiplier that balances both the casino's and the players' interests. Notably, the algorithm remains unaffected by changes in the number of players or by variation in investment amounts, although in practice casinos typically impose a fixed range on permissible investments. Beyond this, the algorithm can help professional players make more informed decisions about how much to invest and how much risk they are comfortable accepting. We further analyze the algorithm's computational complexity and its stopping-multiplier statistics to give a fuller picture of how it behaves in practice.
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Game Theory
Ex-Post Equilibria: Structure and Computation
This paper studies ex-post equilibria (EPEs) in simultaneous-move games with parameter uncertainty. We first compare EPEs with existing notions of robust equilibrium and provide a general foundation for EPEs as a solution concept for games with parameter uncertainty, and we show that EPEs are fully characterized by two game-theoretic properties (monotonicity and set-consistency). Since ex-post equilibria may fail to exist, we introduce the notion of an optimal approximate ex-post equilibrium, in which players adopt approximate best responses while minimizing the degree of suboptimality. We study the problem of computing EPEs and optimal approximate EPEs, focusing on two important classes of games: zero-sum games and concave potential games. We provide several hardness results, as well as a general class of computational approaches based on auxiliary minimax formulations.
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Game Theory
Pessimal Elections for Approximately Dominating Sets
Condorcet's paradox is a foundational result in social choice theory, showing that no matter which candidate wins an election, a majority of voters may prefer some losing candidate. Worse still, even if the election can choose a committee of $k$ winners, some loser may beat every winner in a majority vote. Recent work showed that this obstruction can be sidestepped by relaxing the majority threshold. For all $\varepsilon > 0$, any election can select a committee of $O(1/\varepsilon^2)$ winners such that no loser is preferred to every winner by $\frac12 + \varepsilon$ fraction of voters. We present a simple construction, found by GPT-5.6 Sol Ultra, which proves that this result is tight up to a constant factor.