Nash equilibrium selection using a hybrid two-player static game with trade-off ranking method

Abstract

The paper aims to suggest the ranking of an optimal solution when there exists more than one Nash equilibrium in the game theory solution concept. Many studies tend to merge the game theory with the multi criteria decision-making (MCDM) method to cater the real-situation problems. In the paper, a novel hybrid non-cooperative static game in game theory is combines with the trade-off ranking (TOR) method in MCDM. The proposed hybrid method is used to rank multiple Nash equilibria concerning some criteria. The methodology for both static game and TOR method are explained in the paper. The game theory model used is a two-player non-constant-sum static game. The proposed methodology is tested using international cooperation in Iran. The result suggests the ranking of the combined strategies using the proposed method.