Characterization of Potential Games: Application in Aggregative Games

Abstract: The main objective of this work is to describe games which fall under title of Potential and simplify the conditions for class of aggregative games. Games classified as aggregative are ones in which, in addition to the player's own action, the payoff for each player depends on an aggregate of all the players' decision variables. In this study, we developed a method based on payoff functions to determine if a given game is potential. Then, in order to identify the Aggregative Games that fall under this class we simplified the criteria for the class of Aggregative Games. A $3$-player Cournot game, also known as an Aggregative Potential Game, is used to test the characterization criteria for Potential Games. A $4$-player Cournot game is also utilized to test the form of potential function we obtained for class of general potential games.