Econ 2010A(ii) Sahil Chinoy October 23, 2019

• Perfect information: each information set contains a single decision node.

• A strategy must be a complete contingent plan that says what a player will do at each of her information sets
if she is called on to play there.
• (Kuhn) For games of perfect recall, there is a mixed strategy with the same distribution over outcomes as any
behavioral strategy, and vice versa.
– The absent-minded driver game exemplifies this, since it is not a game of perfect recall.
• A Nash equilibrium always exists for finite games.
– (Zermelo) In a finite game of perfect information, there exists a pure strategy NE.
∗ Proof works by induction: replace the last node with the player’s maximizing move at that node.
– (Nash) Every finite game has a (mixed strategy) NE.
∗ Proof uses Kakutani’s fixed-point theorem.
∗ Define i’s best-response correspondence: ψi (p−i ) = {pi ∈ ∆Si |gi (pi , p−i ) ≥ gi (p0i , p−i ) for all p0i }
· ψi is upper hemicontinuous: continuity of the payoff function ensures that for any convergent
sequence of strategies in ψi , the limit will also be in ψi
· ψi is convex-valued: this follows from the quasiconcavity of the payoff function.
and nonempty.