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Computing Nash Equilibria: Approximation and Smoothed Complexity

Research paper by Xi Chen, Xiaotie Deng, Shang-Hua Teng

Indexed on: 21 Feb '06Published on: 21 Feb '06Published in: Computer Science - Computational Complexity



Abstract

We show that the BIMATRIX game does not have a fully polynomial-time approximation scheme, unless PPAD is in P. In other words, no algorithm with time polynomial in n and 1/\epsilon can compute an \epsilon-approximate Nash equilibrium of an n by nbimatrix game, unless PPAD is in P. Instrumental to our proof, we introduce a new discrete fixed-point problem on a high-dimensional cube with a constant side-length, such as on an n-dimensional cube with side-length 7, and show that they are PPAD-complete. Furthermore, we prove, unless PPAD is in RP, that the smoothed complexity of the Lemke-Howson algorithm or any algorithm for computing a Nash equilibrium of a bimatrix game is polynomial in n and 1/\sigma under perturbations with magnitude \sigma. Our result answers a major open question in the smoothed analysis of algorithms and the approximation of Nash equilibria.