A NE is a solution to a system of n first-order conditions, so an equilibrium
may not exist. Non-existence of an equilibrium is potentially a
conceptual problem since in this case it is not clear what the outcome
of the game will be. However, in many games a NE does exist and
there are some reasonably simple ways to show that at least one NE
exists. As already mentioned, a NE is a fixed point of the best response
mapping. Hence fixed point theorems can be used to establish the existence
of an equilibrium. There are three key fixed point theorems,
named after their creators: Brouwer, Kakutani and Tarski, see Border
(1999) for details and references. However, direct application of fixed
point theorems is somewhat inconvenient and hence generally not done.
For exceptions see Lederer and Li (1997) and Majumder and Groenevelt
(2001a) for existence proofs that are based on Brouwer’s fixed point theorem.
Alternative methods, derived from these fixed point theorems,
have been developed. The simplest and the most widely used technique
for demonstrating the existence of NE is through verifying concavity of
the players’ payoffs