In classical game theory the idea that players randomize between their actions according to a particular optimal probability distribution has always been viewed as puzzling. In this paper, we establish a fundamental connection between n-person normal form games and quantum mechanics, which eliminates the conceptual problems of these random strategies. While the two theories have been regarded as distinct, our main theorem proves that if we do not give any other piece of information to a player i…

Read moreIn classical game theory the idea that players randomize between their actions according to a particular optimal probability distribution has always been viewed as puzzling. In this paper, we establish a fundamental connection between n-person normal form games and quantum mechanics, which eliminates the conceptual problems of these random strategies. While the two theories have been regarded as distinct, our main theorem proves that if we do not give any other piece of information to a player in a game, than the payoff matrix—the axiom of “no-supplementary data” holds—then the state of mind of a rational player is algebraically isomorphic to a pure quantum state. The “no supplementary data” axiom is captured in a Lukasiewicz’s three-valued Kripke semantics wherein statements about whether a strategy or a belief of a player is rational are initially indeterminate i.e. neither true, nor false. As a corollary, we show that in a mixed Nash equilibrium, the knowledge structure of a player implies that probabilities must verify the standard “Born rule” postulate of QM. The puzzling “indifference condition” wherein each player must be rationally indifferent between all the pure actions of the support of his equilibrium strategy is resolved by his state of mind being described by a “quantum superposition” prior a player is asked to make a definite choice in a “measurement”. Finally, these results demonstrate that there is an intrinsic limitation to the predictions of game theory, on a par with the “irreducible randomness” of quantum physics