Multi-group Bayesian Games

Abstract: This paper presents a model of multi-group Bayesian games (MBGs) to describe the group behavior in Bayesian games, and gives methods to find (strongly) multi-group Bayesian Nash equilibria (MBNE) of this model with a proposed transformation. MBNE represent the optimal strategy \textit{profiles} under the situation where players within a group play a cooperative game, while strongly MBNE characterize the optimal strategy \textit{profiles} under the situation where players within a group play a noncooperative game. Firstly, we propose a model of MBGs and give a transformation to convert any MBG into a multi-group ex-ante agent game (MEAG) which is a normal-form game. Secondly, we give a sufficient and necessary condition for a MBG's MEAG to be (strongly) potential. If it is (strongly) potential, all its (strongly) Nash equilibria can be found, and then all (strongly) MBNE of the MBG can be obtained by leveraging the transformation's good properties. Finally, we provide algorithms for finding (strongly) MBNE of a MBG whose MEAG is (strongly) potential and use an illustrative example to verify the correctness of our results.