A Mixed 0-1 Linear Programming Approach to the Computation of All Pure-Strategy Nash Equilibria of a Finite<i>n</i>-Person Game in Normal Form

A main concern in applications of game theory is how to effectively select a Nash equilibrium, especially a pure-strategy Nash equilibrium for a finite<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" id="M1"><mml:mrow><mml:mi>n</mml:mi></mml:mrow></mml:math>-person game in normal form. This selection process often requires the computation of all Nash equilibria. It is well known that determining whether a finite game has a pure-strategy Nash equilibrium is an NP-hard problem and it is difficult to solve by naive enumeration algorithms. By exploiting the properties of pure strategy and multilinear terms in the payoff functions, this paper formulates a new mixed 0-1 linear program for computing all pure-strategy Nash equilibria. To our knowledge, it is the first method to formulate a mixed 0-1 linear programming for pure-strategy Nash equilibria and it may work well for similar problems. Numerical results show that the approach is effective and this method can be easily distributed in a distributed way.