[Math] Games With No Subgame Perfect Nash Equilibrium

game theorynash-equilibrium

In our Game Theory class, we're learning about subgame perfect Nash equilibria (SPNE) for finite extensive form games. Our professor mentioned that not all games have a pure SPNE. I think that the only type of game to not have a pure SPNE would be one of imperfect information, but aren't all games subgames of themselves, so their pure NE would also be a pure SPNE?

I'd really appreciate an example of a game graph where there is no pure SPNE but there is a pure NE to help me clarify this confusion.

Best Answer

Even a game with perfect information can have equilibria SPNE in mixed strategies (e.g., assume identical payoffs in all terminal nodes), but it is correct that only games with imperfect information may not have SPNE in pure strategies.

The simplest example of all is obtained if you take a simultaneous-move game that has only a NE in mixed strategies (e.g., Matching Pennies) and write it as an extensive-form game. The extensive form has a non-trivial information set and has incomplete information. The set of NE is the same for the strategic form and for the extensive form; moreover, the NE and the SPNE for the extensive form coincide.

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