A game-theoretic analysis of baccara chemin de fer, II
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In a previous paper, we considered several models of the parlor game baccara chemin de fer, including Model B2 (a 2×2^484 matrix game) and Model B3 (a 2^5×2^484 matrix game), both of which depend on a positive-integer parameter d, the number of decks. The key to solving the game under Model B2 was what we called Foster's algorithm, which applies to additive 2×2^n matrix games. Here "additive" means that the payoffs are additive in the n binary choices that comprise a player II pure strategy. In the present paper, we consider analogous models of the casino game baccara chemin de fer that take into account the 100 α percent commission on Banker (player II) wins, where 0≤α≤1/10. Thus, the game now depends not just on the discrete parameter d but also on a continuous parameter α. Moreover, the game is no longer zero sum. To find all Nash equilibria under Model B2, we generalize Foster's algorithm to additive 2×2^n bimatrix games. We find that, with rare exceptions, the Nash equilibrium is unique. We also obtain a Nash equilibrium under Model B3, based on Model B2 results, but here we are unable to prove uniqueness.
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