Interpretations of the nonexistence of equilibrium in game theory and economics
The refinement and formalization of equilibrium concepts mark the es-tablishment of game theory as a distinct discipline.The development of game theory has been centered around the fundamental properties of various equilibrium concepts.It is generally accepted that the nonexistence of equilibrium is seen as a negative outcome,im-peding the advancement of equilibrium research.This holds true for economic research as well.This paper illustrates,through two examples from the literature on non-cooperative games and perfectly competitive markets,that sometimes valuable interpretations can be provided for the nonexistence of equilibrium.The first example examines the evolution of fashion phenomena through a network game based on matching pennies,where the nonex-istence of equilibrium is used to interpret the emergence of fashion cycles.The second example discusses the matching problem between companies and workers in a perfectly competitive labor market,where the nonexistence of equilibrium is used to explain the phenomenon of early contracting.Additionally,we briefly introduce Shapley's insightful interpretation regarding the empty core in transferable utility cooperative games.
game theoryNash equilibriumcorecompetitive equilibrium
NETL
NSTL
万方数据
