The Efficiency of Generalized Nash and Variational Equilibria
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Shared-constraint games are noncooperative N-player games where players are coupled through a common coupling constraint. It is known that such games admit two kinds of equilibria – generalized Nash equilibria (GNE) and variational equilibria (VE) – with two different economic interpretations. We consider such games in the context of resource allocation, where players move simultaneously to decide portions of the resource they can consume under a coupling constraint that the sum of the portions they demand be no more than the capacity of the resource. We clarify the worst case and best case efficiency of these kinds of equilibria over all games in a class. We find that the worst case efficiency of both solution concepts in zero and the best case efficiency is unity. Moreover, we characterize the subclass of games where all VE are efficient and show that even in this subclass but the worst case efficiency of GNE is zero. We finally discuss means by which zero worst case efficiency can be remedied.
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