Determining all Nash equilibria in a (bi-linear) inspection game

This paper addresses a “game” between an inspection agency and multiple inspectees that are subject to random inspections by that agency. We provide explicit (easily computable) expressions for all possible Nash equilibria and verify that none is left out. In particular, our results characterize situations when there exists a unique Nash equilibrium. We also explore special features of the Nash equilibria and the solution of the problem the inspection agency faces in a non-strategic environment.

► This paper addresses a “game” between an inspection agency and multiple inspectees that are subject to random inspections by that agency.
► We provide explicit (easily computable) expressions for all possible Nash equilibria and verify that none is left out.
► In particular, our results characterize situations when there exists a unique Nash equilibrium.
► We also explore special features of the Nash equilibria and the solution of the problem the inspection agency faces in a non-strategic environment.