On the solution of games with arbitrary payoffs: An application to an over‐the‐counter financial market

This paper defines a variety of game theoretic solution concepts in the language of soft set theory. We begin by defining the Nash equilibrium in pure strategies. We assume that the gains of the players are totally ordered and non‐desirable alternatives are absent. Moreover, we introduce the notions...

Full description

Saved in:
Bibliographic Details
Published in:International journal of finance and economics 2024-04, Vol.29 (2), p.1877-1895
Main Authors: Kollias, Iraklis, Leventides, John, Papavassiliou, Vassilios G.
Format: Article
Language:English
Subjects:
cooperative bargaining games
financial intermediation
game theory
Nash equilibrium
over‐the‐counter financial markets
soft set theory
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper defines a variety of game theoretic solution concepts in the language of soft set theory. We begin by defining the Nash equilibrium in pure strategies. We assume that the gains of the players are totally ordered and non‐desirable alternatives are absent. Moreover, we introduce the notions of strong and semi‐strong utility. These two completely new notions, serve as a mechanism for converting non‐ordered gains into totally ordered ones. We define the Nash equilibrium in mixed strategies in a general framework by introducing the notion of an extended game and strategy space. We finally define the Nash solution to cooperative bargaining games within the framework of soft set theory, illustrate a practical application to an over‐the‐counter financial market, and provide a detailed numerical example.
ISSN:1076-9307
1099-1158
DOI:10.1002/ijfe.2758