Strategic decompositions of normal form games: Zero-sum games and potential games

Abstract

We introduce new classes of games, called zero-sum equivalent games and zero-sum equivalent potential games, and prove decomposition theorems involving these classes of games. Two games are “strategically equivalent” if, for every player, the payoff differences between two strategies (holding other players' strategies fixed) are identical. A zero-sum equivalent game is a game that is strategically equivalent to a zero-sum game; a zero-sum equivalent potential game is a potential game that is strategically equivalent to a zero-sum game. We also call a game “normalized” if the sum of one player's payoffs, given the other players' strategies, is zero. One of our main decomposition results shows that any normal form game, whether the strategy set is finite or continuous, can be uniquely decomposed into a zero-sum normalized game, a zero-sum equivalent potential game, and an identical interest normalized game, each with distinctive equilibrium properties.