One-shot deviation principle

The one-shot deviation principle is the principle of optimality of dynamic programming applied to game theory. It says that a strategy profile of a finite extensive-form game is a subgame perfect equilibrium if and only if there exist no profitable one-shot deviations.[1] Ultimately, no player can profit from deviating from the strategy for one period and then reverting to the strategy.

Definitions

A one-shot deviation for player i from strategy σi is a different strategy σ~i for only one period. A profitable one-shot deviation is one in which using a different strategy for one period (an one-shot deviation) yields a higher payoff.[2] A proof of how an unimprovable strategy must be optimal can also be done.[3]

References

  1. ↑ Tirole, Drew Fudenberg ; Jean (1991). Game theory (6. printing. ed.). Cambridge, Mass. [u.a.]: MIT Press. ISBN 978-0-262-06141-4.
  2. ↑ Rubinstein, Martin J. Osborne; Ariel (2006). A course in game theory (12. print. ed.). Cambridge, Mass. [u.a.]: MIT Press. ISBN 0262650401.
  3. ↑ Ray, Debraj. "One-Shot Deviation Principle" (PDF). Retrieved 5 February 2014.


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