Program equilibria and discounted computation time

Abstract

Tennenholtz (GEB 2004) developed Program Equilibrium to model play in a finite two-player game where each player can base their strategy on the other player's strategies. Tennenholtz's model allowed each player to produce a "loop-free" computer program that had access to the code for both players. He showed a folk theorem where the result of any mixed-strategy individually rational play could be an equilibrium payoff in this model even in a one-shot game. Kalai et al. gave a general folk theorem for correlated play in a more generic commitment model.