your strategy stays fixed.
Find a best response to the others’ strategies.
When our choices can be predicted, the rules of rationality change. Meet the Perfect Prediction Equilibrium.
“What if I had chosen differently?”
Every theory of rational choice needs an answer. In a Nash equilibrium, a player tests a different strategy while holding everyone else’s strategies fixed.
Perfect prediction asks a different question: if my choice had been different, would others have predicted that difference—and acted differently, too?
A decision and its anticipation become counterfactually dependent. The outcome must fit the reasoning that predicts it. [1]
Find a best response to the others’ strategies.
Find an outcome consistent with being predicted.
↳ Counterfactual dependence does not mean sending a signal into the past. It compares different possible histories.
Alice can give Bob a loaf of bread. Bob can then pay her—or keep it without paying. Both want the best outcome for themselves.
Switch the reasoning. Watch the game change.
The promise / assurance game from the supplied research. Nashian mode shows the subgame-perfect equilibrium; PPE mode assumes perfect prediction and strict preferences. [1] [4]
Perfect Prediction Equilibrium also applies when players choose without observing each other’s decision. Here, the row player chooses D, E or F; the column player chooses A, B or C.
Switch the reasoning to compare the Nash equilibrium with Perfect Prediction Equilibrium. In perfect-prediction mode, step through the elimination of outcomes that contradict rational payoff guarantees.
| ROW ↓ | A | B | C |
|---|---|---|---|
| D | 6, 8Possible | 1, 2Possible | 4, 4Possible |
| E | 3, 1Possible | 0, 7Possible | 2, 3Possible |
| F | 7, 0Possible | 8, 5Possible | 5, 6Possible · Nash |
Each cell is one joint outcome. Both players have strict preferences: no two outcomes give either player the same payoff. The reasoning compares guaranteed payoffs without holding the other player’s strategy fixed.
Stable against unilateral deviations, but not Pareto optimal: (6, 8) improves both players’ payoffs.
Pareto optimal. In this game, both players obtain a higher payoff than at Nash.
Exact game from Figure 11, page 29 (supplied revision v4) of Perfect Prediction in Normal Form by Ghislain Fourny. The paper calls this equilibrium PTE; we use the unified name PPE here. This example improves on Nash for both players; that relationship does not hold for every game.
PPE is a fixed-point solution: predicting the outcome leads rational players to that very outcome. Forward induction eliminates futures that would contradict their own anticipation. [1]
For finite extensive-form games with perfect information and strict preferences, a PPE always exists.
Under those assumptions, the reasoning selects a single equilibrium path and outcome.
No alternative outcome can improve one player’s payoff without making another worse off.
PPE and PTE denote the same unified equilibrium concept. The original sequential-game work used “Perfect Prediction Equilibrium”; the normal-form work used “Perfectly Transparent Equilibrium,” before their unification became clear. In normal form, the reasoning repeatedly eliminates outcomes below players’ current maximin guarantees, under rationality and knowledge of strategies in all possible worlds.
The guarantees depend on the game class. For finite sequential games with perfect information and strict preferences, existence, uniqueness and Pareto optimality are guaranteed. For the finite normal-form games with pure strategies and no payoff ties studied in the paper, the equilibrium is unique and Pareto optimal when it exists; existence is not guaranteed. On symmetric normal-form games, it coincides with Hofstadter’s superrationality. [1] [2]
What changes when independence is an assumption
we can question?
Prediction sits at the heart of the connection to AI. The normal-form paper points to machine learning and data analysis as motivation for questioning independent decisions. [2]
For artificial agents that inspect, simulate or predict one another, an intriguing question follows: should a counterfactual change in one policy leave the other policy’s response fixed?
This perspective is relevant to AI safety: how can predictive agents make credible commitments, cooperate with humans, and avoid incentives for harmful behavior?
PPE can be seen as a proposed game-theoretic implementation of Isaac Asimov’s Three Laws of Robotics, provided their priorities are explicitly encoded in the model: protect humans first, follow human instructions consistent with that protection, and preserve the robot subject to both.
This interpretation connects equilibrium reasoning with safety-oriented design. PPE itself supplies no ethical priorities: the laws must be built into the model, and real-world safety requires more than an equilibrium guarantee.
Perfect prediction is an idealization. Applying this approach to imperfect AI systems remains an open research direction.
Explore the theoretical foundation ↗Spacetime games place choices inside Minkowski spacetime. Light cones determine which information can reach a decision—connecting game structures to relativistic causality. [3]
Baczyk and Fourny model measurement settings and outcomes as decisions by experimentalists and nature. Within this framework, they argue that Nashian free-choice assumptions conflict with Bell-inequality violations, and propose non-Nashian reasoning instead. [4]
The proposal accommodates counterfactual dependence and contextuality. It leaves nature’s precise payoffs open; it is a research framework, not a completed derivation of quantum predictions.
“If I had chosen differently,
you would have seen it coming.”
Explore the original arguments, formal definitions and proofs—from the early work on projected equilibrium and Newcomb’s paradox to the four manuscripts behind this introduction.
Ghislain Fourny, Stéphane Reiche & Jean-Pierre Dupuy
Superrational Thinking Extended to Non-Symmetric Games · Ghislain Fourny
Ghislain Fourny
Michal Baczyk & Ghislain Fourny
Jean-Pierre Dupuy
Jean-Pierre Dupuy
Nash equilibrium answers a well-defined question under a particular counterfactual assumption: hold the others’ strategies fixed. PPE explores a different assumption. Which model is useful depends on the agents and situation being studied.
It is an idealization, like other strong knowledge assumptions in game theory. The papers establish what follows under that idealization. Partial predictability and imperfect models require further analysis.
No. The model’s players still pursue their own payoffs. Cooperation can emerge because a different choice would have been anticipated differently. The promise-game example is played once and needs no repeated-game reward or punishment.
The quantum paper proposes a decision-theoretic framework and argues for revisiting free-choice assumptions. It does not specify a complete physical payoff model or derive all quantum statistics. Its connection to quantum foundations is an invitation to further research.