Econometrica: Mar 2002, Volume 70, Issue 2
Computing Normal Form Perfect Equilibria for Extensive Two‐Person Games
Bernhard Von Stengel, Antoon Van Den Elzen, Dolf TalmanThis paper presents an algorithm for computing an equilibrium of an extensive two‐person game with perfect recall. The method is computationally efficient by virtue of using the sequence form, whose size is proportional to the size of the game tree. The equilibrium is traced on a piecewise linear path in the sequence form strategy space from an arbitrary starting vector. If the starting vector represents a pair of completely mixed strategies, then the equilibrium is normal form perfect. Computational experiments compare the sequence form and the reduced normal form, and show that only the sequence form is tractable for larger games.
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