On the Tikhonov Well-Posedness of Concave Games and Cournot Oligopoly Games

Abstract

The purpose of this paper is to investigate whether theorems known to guarantee the existence and uniqueness of Nash equilibria, provide also sufficient conditions for the Tikhonov well-posedness (Twp). We consider several hypotheses that ensure the existence and uniqueness of a Nash equilibrium (NE), such as strong positivity of the Jacobian of the utility function derivatives (Ref. 1), pseudoconcavity, and strict diagonal dominance of the Jacobian of the best reply functions in implicit form (Ref. 2). The aforesaid assumptions imply the existence and uniqueness of NE. We show that the hypotheses in Ref. 2 guarantee also the T-wp property of the Nash equilibrium.As far as the hypotheses in Ref. 1 are concerned, the result is true for quadratic games and zero-sum games. A standard way to prove the T-wp property is to show that the sets of e-equilibria are compact. This last approach is used to demonstrate directly the T-wp property for the Cournot oligopoly model given in Ref. 3. The compactness of e-equilibria is related also to the condition that the best reply surfaces do not approach each other near infinity.