An algorithmic approach toward the tracing procedure for bi-matrix games

The main subroutines in the equilibrium selection theory of Harsanyi and Se lten (1988) concern the linear and logarithmic tracing procedures which con vert a given prior into an equilibrium. First we show that fur bi-matrix ga mes the linear tracing procedure is equivalent, up to projection, to the pi voting procedure of the authors (1991), which enables implementation on a c omputer. Consequently, the linear tracing procedure, if well defined, gener ates a perfect equilibrium whenever it is started from a completely mixed p rior. Finally, by applying our procedure with lexicographic pivoting we obt ain an always well-defined alternative for the logarithmic tracing procedur e which is difficult to implement. (C) 1999 Academic Press.