Deviation Between Team-Optimal Solution and Nash Equilibrium in Flow Assignment Problems

Abstract

We investigate the relationship between the team-optimal solution and the Nash equilibrium (NE) to assess the impact of strategy deviation on team performance. As a working use case, we focus on a class of flow assignment problems in which each source node acts as a cooperating decision maker (DM) within a team that minimizes the team cost based on the team-optimal strategy. In practice, some selfish DMs may prioritize their own marginal cost and deviate from NE strategies, thus potentially degrading the overall performance. To quantify this deviation, we explore the deviation bound between the team-optimal solution and the NE in two specific scenarios: (i) when the team-optimal solution is unique and (ii) when multiple solutions do exist. This helps DMs analyze the factors influencing the deviation and adopting the NE strategy within a tolerable range. Furthermore, in the special case of a potential game model, we establish the consistency between the team-optimal solution and the NE. Once the consistency condition is satisfied, the strategy deviation does not alter the total cost, and DMs do not face a strategic trade-off. Finally, we validate our theoretical analysis through some simulation studies.