Complexity and Effective Prediction

Citation:

Abraham Neyman and Spencer, Joel . 2010. “Complexity And Effective Prediction”. Games And Economic Behavior, Pp. 165-168.

Abstract:

Let G = be a two-person zero-sum game. We examine the two-person zero-sum repeated game G(k,m) in which players 1 and 2 place down finite state automata with k,m states respectively and the payoff is the average per-stage payoff when the two automata face off. We are interested in the cases in which player 1 is “smart” in the sense that k is large but player 2 is “much smarter” in the sense that m>>k. Let S(g) be the value of G where the second player is clairvoyant, i.e., would know the player 1’s move in advance. The threshold for clairvoyance is shown to occur for m near min(|I|, | J |) to the power k. For m of roughly that size, in the exponential scale, the value is close to S(g). For m significantly smaller (for some stage payoffs g) the value does not approach S(g).