Abstract. Limitations in agents’ ability to observe, measure and compute are studied. A formulation in terms of induced changes in the players’ subjective perception of the game makes it possible to study these phenomena on a common footing with objective variation in the game. We study a model where payoffs undergo continuous variation and players reason about the process from limited local information. Specifically, finite games, and state- ments about them, are interpreted within sheaf models, which incorporate both variation and a logic of limited observation. Nash’s theorem on the existence of equilibrium is not valid unless special observational properties hold, although closely related statements are valid. The possibility of learning to play a mixed strategy Nash equilibrium from observation of past play is also examined within the framework. Key words: Nash equilibrium, variation, observation, measurement, com- putation 1. Introduction This paper studies limitations in the abilities of agents. The details of a game are not known in full to the agent, but are inferred from a process of obser- vation, measurement and computation. We are able to analyze all three phenomena within a common framework, using the insight that each process induces variation in the players’ subjective perception of the game. This allows Int J Game Theory (2003) 32: 455–470 DOI 10.1007/s001820400163 *I thank the referee and associate editor for their comments and suggestions. I also received very helpful suggestions from Josh Epstein. All remaining errors are my own. Observation, Measurement, and Computation in Finite Games Kislaya Prasad Florida State University,* Economics Department, Tallahassee, TL 32306, U.S.A (E-mail: kprasad@coss.fsu.edu) Received: April 2000 / Revised: December 2003