The Power Allocation Game on Dynamic Networks: Subgame Perfection

Abstract

In the game theory literature, there appears to be little research on equilibrium selection for normal-form games with an infinite strategy space and discontinuous utility functions. Moreover, many existing selection methods are not applicable to games involving both cooperative and noncooperative scenarios (e.g., "games on signed graphs"). With the purpose of equilibrium selection, the power allocation game developed in \cite{allocation}, which is a static, resource allocation game on signed graphs, will be reformulated into an extensive form. Results about the subgame perfect Nash equilibria in the extensive-form game will be given. This appears to be the first time that subgame perfection based on time-varying graphs is used for equilibrium selection in network games. This idea of subgame perfection proposed in the paper may be extrapolated to other network games, which will be illustrated with a simple example of congestion games.