(This article is cross-posted from my blog)
Imagine a world in which agents may interact, but may not coordinate in an enforceable way. Agents may communicate, but there is no mechanism to hold another agent accountable to commitments reached while communicating. In this world, all conflicts of interest between agents would resolve to a Nash Equilibrium.
A Nash Equilibrium, sometimes described as a "self-enforcing law", is an outcome from which no agent has an incentive to unilaterally deviate.
I will talk about the Prisoner's Dilemma, an illustration of a simple scenario that is famous because its Nash Equilibrium is /bad/. If the players could coordinate to escape the pull of the force that pulls them... (read 1445 more words →)
I’m confused—your examples for IVT reference “lumpy” functions. I’m not exactly sure what that means, but it seems like you mean functions with discrete, sharp steps. Such a function would be discontinuous, and IVT only applies to continuous functions.