One-shot deviation principle

rdf:langString One-shot deviation principle

rdf:langString The one-shot deviation principle (also known as one-deviation property) is the principle of optimality of dynamic programming applied to game theory. It says that a strategy profile of a finite extensive-form game is a subgame perfect equilibrium (SPE) if and only if there exist no profitable one-shot deviations for each subgame and every player. In simpler terms, if no player can increase their payoffs by deviating a single decision, or period, from their original strategy, then the strategy that they have chosen is a SPE. As a result, no player can profit from deviating from the strategy for one period and then reverting to the strategy. Furthermore, the one-shot deviation principle is very important for infinite horizon games, in which the principle typically does not hold, since it is not plausible to consider an infinite number of strategies and payoffs in order to solve. In an infinite horizon game where the discount factor is less than 1, a strategy profile is a subgame perfect equilibrium if and only if it satisfies the one-shot deviation principle.