<blockquote>
  <p>What is meant by fixed point reasoning here? </p>
</blockquote>

<p>Specifically, Nash equilibria. One way to define a Nash equilibrium in words is "a strategy profile from which no player can be made better-off by unilaterally deviating to a different action".  In other words, a Nash equilibrium is a "fixed point" because if the game ends up there, play stops because there are no more optimal moves.</p>

<blockquote>
  <p>Is there a difference between fixed point reasoning and iterative never-best-response elimination?</p>
</blockquote>

<p>Yes, they are different solution concepts.  The key is the last paragraph on page 12 of the article - basically, think of k-rationalizability as half-assing the game while still keeping the assumptions of full info, rationality, belief in mutual rationality, and so on.  Instead of stopping play when there are no optimal moves, play stops when some kind of decision-making resource is exhausted. It is interesting precisely to the extent that it may or may not model how real people, who face real information costs and processing time limitations, might approach games.</p>

CC BY-SA 4.0
2019-11-20T23:26:01.493Z
Thank you for your answer. I suspected fixed point reasoning to be related to NE but the wording suggests some sort of process relevant to finding a NE. Thus it would be comparable to iterative elimination, which is a method of finding a (possibly non equilibrium) solution.
Amin Sammara
CC BY-SA 4.0
2019-11-21T05:49:28.310Z
@heh A Nash equilibrium is a fixed poind because it is literally a fixed point of the best response mapping $BR(s) = \left(BR_1(s_{-1}),BR_2(s_{-2}),BR_3(s_{-3}),...,BR_n(s_{-n})\right)$.
Giskard
CC BY-SA 4.0
2019-11-21T16:06:59.727Z
@Giskard that tautology does not answer the question that is asked.  It does not explain *why* a Nash equilibrium is a fixed point; it just explains in symbols *what it means* for a Nash equilibrium to be a fixed point.  The crucial distinction between Nash and truncated iteration is *why play stops*.  The math is important, but (in my view) in game theory the intuition should come first.
heh
CC BY-SA 4.0
2019-11-21T16:12:26.903Z
@AminSammara yes, as the paper explains, your suspicion is correct for the 2-player case. More generally, think of it as a truncated process of iterative elimination.  A player sets "k" according to what is "good enough".  As the paper notes, it's not a great solution concept, but it is probably closer to how real-world agents behave given finite decision-making resources and lack of perfect information.
heh
CC BY-SA 4.0
2019-11-21T17:24:08.493Z
@heh Aha! So in real life "fixed point reasoning", do players pick some strategy profile and then see if there is any incentive to unilaterally pay off? They keep doing this at random until they come across a "point" or a strategy profile that achieves equilibrium? This would explain "cognitively less taxing for small k" especially given a high dimensional strategy space.
Amin Sammara
CC BY-SA 4.0
2019-11-21T17:44:51.987Z
@aminsammara I won't stake my life on it, but being a real-life person myself and having played some games before, I'd say that yes this is generally how it plays out.  Although I wouldn't say "at random" - rather, I would say "on the basis of available information and subject to cognitive resources at each stage game".  That information set and resources could certainly be randomly determined, but this is an important distinction.  Also, I am implicitly treating a one-shot game as a tacit two-stage game, with the second stage being an opportunity to deviate.
heh
CC BY-SA 4.0
2019-11-22T01:27:43.250Z
@heh thank you everything makes sense. I'm also very grateful that you responded given how badly written my comments were. And I agree that random was not the best word to use there but your answer confirms my intuition. Thanks again.
Amin Sammara
CC BY-SA 4.0
2019-11-20T22:57:47.883Z
2019-11-20T22:57:47.883Z
heh
<p>I'm reading a <a href="https://econweb.ucsd.edu/~vcrawfor/CCGIJEL13.pdf" rel="nofollow noreferrer">Structural Models of Nonequilibrium Strategic Thinking: Theory,
Evidence, and Applications</a> by Crawford, Costa-Gomes and Iriberri. They write the following:</p>

<blockquote>
  <p>In two-person games, a player can find his set
  of k-rationalizable strategies via k rounds of
  iterated strict dominance, without the need
  for fixed-point reasoning. Thus, k-rationalizability is cognitively less taxing than equilibrium, especially for small k.</p>
</blockquote>

<p>K rationalizable strategies are those that survive k-rounds of iterated strict dominace (for n=2 player games). For n >2, k-rationalizable strategies are those that survive k-rounds of iterative never best response elimination. </p>

<p>What is meant by fixed point reasoning here? Is there a difference between fixed point reasoning and iterative never-best-response elimination? </p>

<p>Relevant section is Section 2.2 found <a href="https://econweb.ucsd.edu/~vcrawfor/CCGIJEL13.pdf#page=8" rel="nofollow noreferrer">on page 12</a>.</p>

CC BY-SA 4.0
2019-11-20T22:13:00.713Z
Specifying the paper (or linking to it) may help.
Giskard
CC BY-SA 4.0
2019-11-20T22:33:05.293Z
@Giskard Right, I linked the paper. Thanks
Amin Sammara
<game-theory><nash-equilibrium><bounded-rationality>
Difference between equilibrium and k-rationalizability
Amin Sammara
# Difference between equilibrium and k-rationalizability

(Asked by: username_0 on 2019-11-20)

I'm reading a [Structural Models of Nonequilibrium Strategic Thinking: Theory,
Evidence, and Applications](https://econweb.ucsd.edu/~vcrawfor/CCGIJEL13.pdf) by Crawford, Costa-Gomes and Iriberri. They write the following:

> In two-person games, a player can find his set
> of k-rationalizable strategies via k rounds of
> iterated strict dominance, without the need
> for fixed-point reasoning. Thus, k-rationalizability is cognitively less taxing than equilibrium, especially for small k.

K rationalizable strategies are those that survive k-rounds of iterated strict dominace (for n=2 player games). For n >2, k-rationalizable strategies are those that survive k-rounds of iterative never best response elimination.

What is meant by fixed point reasoning here? Is there a difference between fixed point reasoning and iterative never-best-response elimination?

Relevant section is Section 2.2 found [on page 12](https://econweb.ucsd.edu/~vcrawfor/CCGIJEL13.pdf#page=8).

**Tags:** game-theory, nash-equilibrium, bounded-rationality

> **Comments:**
> **username_1**: Specifying the paper (or linking to it) may help.  
> **username_0**: @username_1 Right, I linked the paper. Thanks  

---

## 1 answers

### Answer by username_2 on 2019-11-20. Score: 1 | Accepted answer

> What is meant by fixed point reasoning here?

Specifically, Nash equilibria. One way to define a Nash equilibrium in words is "a strategy profile from which no player can be made better-off by unilaterally deviating to a different action". In other words, a Nash equilibrium is a "fixed point" because if the game ends up there, play stops because there are no more optimal moves.

> Is there a difference between fixed point reasoning and iterative never-best-response elimination?

Yes, they are different solution concepts. The key is the last paragraph on page 12 of the article - basically, think of k-rationalizability as half-assing the game while still keeping the assumptions of full info, rationality, belief in mutual rationality, and so on. Instead of stopping play when there are no optimal moves, play stops when some kind of decision-making resource is exhausted. It is interesting precisely to the extent that it may or may not model how real people, who face real information costs and processing time limitations, might approach games.

> **Comments:**
> **username_0**: Thank you for your answer. I suspected fixed point reasoning to be related to NE but the wording suggests some sort of process relevant to finding a NE. Thus it would be comparable to iterative elimination, which is a method of finding a (possibly non equilibrium) solution.  
> **username_1**: @username_2 A Nash equilibrium is a fixed poind because it is literally a fixed point of the best response mapping $BR(s) = \left(BR_1(s_{-1}),BR_2(s_{-2}),BR_3(s_{-3}),...,BR_n(s_{-n})\right)$.  
> **username_2**: @username_1 that tautology does not answer the question that is asked.  It does not explain *why* a Nash equilibrium is a fixed point; it just explains in symbols *what it means* for a Nash equilibrium to be a fixed point.  The crucial distinction between Nash and truncated iteration is *why play stops*.  The math is important, but (in my view) in game theory the intuition should come first.  
> **username_2**: @AminSammara yes, as the paper explains, your suspicion is correct for the 2-player case. More generally, think of it as a truncated process of iterative elimination.  A player sets "k" according to what is "good enough".  As the paper notes, it's not a great solution concept, but it is probably closer to how real-world agents behave given finite decision-making resources and lack of perfect information.  
> **username_0**: @username_2 Aha! So in real life "fixed point reasoning", do players pick some strategy profile and then see if there is any incentive to unilaterally pay off? They keep doing this at random until they come across a "point" or a strategy profile that achieves equilibrium? This would explain "cognitively less taxing for small k" especially given a high dimensional strategy space.  
> **username_2**: @aminsammara I won't stake my life on it, but being a real-life person myself and having played some games before, I'd say that yes this is generally how it plays out.  Although I wouldn't say "at random" - rather, I would say "on the basis of available information and subject to cognitive resources at each stage game".  That information set and resources could certainly be randomly determined, but this is an important distinction.  Also, I am implicitly treating a one-shot game as a tacit two-stage game, with the second stage being an opportunity to deviate.  
> **username_0**: @username_2 thank you everything makes sense. I'm also very grateful that you responded given how badly written my comments were. And I agree that random was not the best word to use there but your answer confirms my intuition. Thanks again.  

---

