When Can Limited Randomness Be Used in Repeated Games?

Pavel Hubaek, Moni Naor, Jonathan Ullman

Research output: Contribution to journalArticlepeer-review

Abstract

The central result of classical game theory states that every finite normal form game has a Nash equilibrium, provided that players are allowed to use randomized (mixed) strategies. However, in practice, humans are known to be bad at generating random-like sequences, and true random bits may be unavailable. Even if the players have access to enough random bits for a single instance of the game their randomness might be insufficient if the game is played many times. In this work, we ask whether randomness is necessary for equilibria to exist in finitely repeated games. We show that for a large class of games containing arbitrary two-player zero-sum games, approximate Nash equilibria of the n-stage repeated version of the game exist if and only if both players have Omega(n) random bits. In contrast, we show that there exists a class of games for which no equilibrium exists in pure strategies, yet the n-stage repeated version of the game has an exact Nash equilibrium in which each player uses only a constant number of random bits. When the players are assumed to be computationally bounded, if cryptographic pseudorandom generators (or, equivalently, one-way functions) exist, then the players can base their strategies on "random-like" sequences derived from only a small number of truly random bits. We show that, in contrast, in repeated two-player zero-sum games, if pseudorandom generators do not exist, then Omega(n) random bits remain necessary for equilibria to exist.

Original languageEnglish
Pages (from-to)722-746
Number of pages25
JournalTheory of Computing Systems
Volume59
Issue number4
DOIs
StatePublished - Nov 2016

All Science Journal Classification (ASJC) codes

  • Theoretical Computer Science
  • Computational Theory and Mathematics

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