Quadratically Optimal Bi-Matrix Games

Abstract

In this paper, we introduce the class of quadratically optimal (bi-matrix) games, which are bi-matrix games whose set of equilibrium points contain all pairs of probability vectors which maximize the expected pay-off of some pay-off matrix. We call the equilibrium points obtained in this way, quadratically optimal equilibrium points. We prove the existence of quadratically optimal equilibrium points of identical bi-matrix games, i.e. bi-matrix games for which the two pay-off matrices are equal, from which it easily follows that weakly potential bi-matrix games (a generalization of potential bimatrix games) are quadratically optimal. We also show that those weakly potential square bi-matrix games which have potential matrices that are two-way matrices are quadratically and symmetrically solvable games (i.e. there exists a square pay-off matrix whose expected pay-off maximizing probability vectors subject to the requirement that the two probability vectors (row probability vector and column probability vector) being equal) are equilibrium points of the bi-matrix game. We show by means of an example of a 2×2 identical symmetric potential bi-matrix game that for every potential matrix of the game, the set of pairs of probability distributions that maximizes the expected pay-off of the potential matrix is a strict subset of the set of equilibrium points of the potential game.