Definition
Define best response function , , where .
is the set of maximizers of the continuous function on the compact set . existence by Weierstrass theorem
Lemma
If the sets are nonempty sets, , , compact and convex, and is continuous in and concave in , then (best response function) is nonempty, convex-valued, and u.h.c.
By the lemma, is nonempty, convex-valued, u.h.c.,
Kakutani fixed-point theorem says a fixed point .
References
- https://web.stanford.edu/~rjohari/teaching/notes/246_lecture7_2007.pdf