Near rationality and competitive equilibria in networked systems

A growing body of literature in networked systems research relies on game theory and mechanism design to model and address the potential lack of cooperation between self-interested users. Most game-theoretic models applied to system research only describe competitive equilibria in terms of pure Nash equilibria, that is, a situation where the strategy of each user is deterministic, and is her best response to the strategies of all the other users. However, the assumptions necessary for a pure Nash equilibrium to hold may be too stringent for practical systems. Using three case studies on net-work formation, computer security, and TCP congestion control, we outline the limits of game-theoretic models relying on Nash equilibria, and we argue that considering competitive equilibria of a more general form helps in assessing the accuracy of a game the-oretic model, and can even help in reconciling predictions from game-theoretic models with empirically observed behavior