Game Theory and Networked Systems: Exploring Competitive Equilibria

Title: Game Theory and Networked Systems: Exploring Competitive Equilibria

Abstract: This article explores the application of game theory and competitive equilibria in networked systems. It argues that traditional game theory models relying on pure Nash equilibria may not be suitable for practical systems due to their stringent assumptions. The article presents three case studies on computer security, TCP congestion control, and network formation to illustrate the limitations of game-theoretic models and to argue for the consideration of more general competitive equilibria.

Main Research Question: How can game theory and competitive equilibria be applied to networked systems to better understand and predict user behavior?

Methodology: The article uses a combination of literature review and case studies to explore the research question. It discusses the concept of competitive equilibria and its extensions or alternatives, and applies these concepts to three specific scenarios in networked systems.

Results: The case studies demonstrate that the outcomes predicted by Nash equilibria are not always correlated with empirical observations. This suggests that considering more general forms of competitive equilibria may help reconcile the predictions from game-theoretic models with the empirically observed behavior.

Implications: The article suggests that the application of game theory in networked systems may require the consideration of competitive equilibria of a more general form. This could potentially lead to more accurate models and better system design. It also outlines an agenda for future research in this area.

Conclusion: In conclusion, the article argues that the application of game theory in networked systems may require the consideration of competitive equilibria of a more general form. This could potentially lead to more accurate models and better system design. The article also outlines an agenda for future research in this area.

Link to Article: https://arxiv.org/abs/0404040v1 Authors: arXiv ID: 0404040v1