Capital Games and Growth Equilibria

Abstract: We examine formal games that we call "capital games" in which player payoffs are known, but their payoffs are not guaranteed to be von Neumann-Morgenstern utilities. In capital games, the dynamics of player payoffs determine their utility functions. Different players can have different payoff dynamics. We make no assumptions about where these dynamics come from, but implicitly assume that they come from the players' actions and interactions over time. We define an equilibrium concept called "growth equilibrium" and show a correspondence between the growth equilibria of capital games and the Nash equilibria of standard games.