Geometry of Dependency Equilibria

Abstract

An $n$-person game is specified by $n$ tensors of the same format. We view its equilibria as points in that tensor space. Dependency equilibria are defined by linear constraints on conditional probabilities, and thus by determinantal quadrics in the tensor entries. These equations cut out the Spohn variety, named after the philosopher who introduced dependency equilibria. The Nash equilibria among these are the tensors of rank one. We study the real algebraic geometry of the Spohn variety. This variety is rational, except for $2\times 2$ games, when it is an elliptic curve. For $3\times 2$ games, it is a del Pezzo surface of degree two. We characterize the payoff regions and their boundaries using oriented matroids, and we develop the connection to Bayesian networks in statistics.

20 pages, to appear in Rendiconti dell'Istituto di Matematica dell'Università di Trieste