ABSTRACT

A basic difficulty for n-person game theory is specifying the task of the players in the game (Aumann & Maschler, 1964). The hasty and seemingly obvious answer of pure money maximization does not suffice, for if every player were to demand the maximum he could obtain in a coalition, then no coalition could ever form. The approach taken by von Neumann and Morgenstem, and since followed by many others, is to define some sense of stability that inheres to outcomes in the solution, such that players should be willing to subscribe to this sense of stability if they want any agreement to be enforceable. For 2-person constant-sum games, this stability was manifested in the concept of equilibrium pairs of strategies, where neither player could by unilaterally changing his strategy obtain a better outcome for himself. Thus, the payoff at the equilibrium is guaranteed to a player against the most self-aggrandizing behavior of his opponent.