Game Theory
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Game Theory
2017-03-26
Formation of coalition structures as a non-cooperative game
http://d.repec.org/n?u=RePEc:mse:cesdoc:17015&r=gth
The paper defines a family of nested non-cooperative simultaneous finite games to study coalition structure formation with intra and inter-coalition externalities. Every game has two outcomes - an allocation of players over coalitions and a payoff profile for every player. Every game in the family has an equilibrium in mixed strategies. The equilibrium can generate more than one coalition with a presence of intra and inter group externalities. These properties make it different from the Shapley value, strong Nash, coalition-proof equilibrium, core, kernel, nucleolus. The paper demonstrates some applications: non-cooperative cooperation, Bayesian game, stochastic games and construction of a non-cooperative criterion of coalition structure stability for studying focal points. An example demonstrates that a payoff profile in the Prisoners' Dilemma is non-informative to deduce a cooperation of players
Dmitry Levando
Non-cooperative Games
2017-02
Efficiency and Voluntary Redistribution under Inequality
http://d.repec.org/n?u=RePEc:dpr:wpaper:0992&r=gth
This paper presents an experimental analysis of two-by-two coordination games in which player 1 earns a substantially higher payoff than player 2 except in the inefficient equilibrium where they earn the same payoffs. The main focus is on the comparison of two treatments with and without the ex post redistribution stage in which both players may voluntarily transfer their payoffs earned in the game to the other player. We find that (1) the transfer opportunity raises the probability of coordination on an efficient equilibrium, (2) a transfer from player 1 to player 2 is positive, and is higher when player 2 chooses the action corresponding to the efficient equilibrium, and hence (3) the transfer opportunity tends to improve the efficiency and equity of the final outcome. Furthermore, these tendencies are stronger when the two players have conflicting interests over the two equilibria than when they have common interests.
Masaki Aoyagi
Naoko Nishimura
Yoshitaka Okano
2017-03
Information Transmission in Hierarchies
http://d.repec.org/n?u=RePEc:mse:cesdoc:17014&r=gth
We analyze a game in which players with unique information are arranged in a hierarchy. In the lowest layer each player can decide in each of several rounds either to pass the information to his successor or to hold. While passing generates an immediate payoff according to the value of information, the player can also get an additional reward if he is the last player to pass. Facing this problem while discounting over time determines the player's behavior. Once a successor has collected all information from his workers he starts to play the same game with his successor. We state conditions for different Subgame Perfect Nash Equilibria and analyse the time it takes each hierarchy to centralize the information. This allows us to compare different structures and state which structure centralizes fastest depending on the information distribution and other parameters. We show that the time the centralization takes is mostly affected by the least informed players
Simon Schopohl
communication network; dynamic network game; hierarchical structure; information transmission
2017-02
Public debt, corruption and tax evasion: Nash and Stackelberg equilibria
http://d.repec.org/n?u=RePEc:pra:mprapa:77519&r=gth
Public debt accumulation results to disutility with the problem addressed as whether time path of the public debt is sustainable. In this study the infinite time differential game modeling is used as appropriate tool for the economic analysis that follows. The dynamic game is simple and assumes that the starting point of the public debt model is the well known accounting identity interrelating public debt, interest rate and real government surplus exclusive of interest payments on public debt. In the setting, we consider as stock the public debt and the stress of the regulator is to raise nation’s primary surplus. Any surplus increase is not only dependent on government measures, but is also dependent on the known “culture of corruption” and on tax evasion. Thus the process of surpluses’ augmentation should be a function of these two factors. Nash and Stackelberg differential game approaches are used to explore strategic interactions. In the Nash equilibrium establishment of cyclical strategies during the game between the group of people involved in illegal activities of corruption and tax evasion in one hand and the government in the other, requires that the discount rate of the group of people involved in illegal actions must be greater than government’s discount rate. That is the group of corrupt officials and evaders must be more impatient than government. In the case of hierarchical setting analytical expressions of the strategies and the steady state value of public debt stock are provided. Furthermore a number of propositions are stated.
Halkos, George
Papageorgiou, George
Public debt; Tax evasion; Dynamic games; Nash equilibrium; Stackelberg equilibrium
2017-03
Constrained Allocation of Projects to Heterogenous Workers with Preferences over Peers
http://d.repec.org/n?u=RePEc:bge:wpaper:960&r=gth
We study the problem of allocating projects to heterogenous workers. The simultaneous execution of multiple projects imposes constraints across project teams. Each worker has preferences over the combinations of projects in which he can potentially participate and his team members in any of these projects. We propose a revelation mechanism that is Pareto-efficient and group strategy-proof (Theorem 1). We also identify two preference domains on which the mechanism is strongly group strategy-proof (Theorem 2). Our results subsume results by Monte and Tumennasan (2013) and Kamiyama (2013).
Flip Klijn
matching; allocation; heterogenous agents; preferences over peers; efficiency; (group) strategy-proofness
2017-03
Revenue ranking of optimally biased contests: the case of two players
http://d.repec.org/n?u=RePEc:zur:econwp:243&r=gth
It is shown that the equilibrium in the asymmetric Tullock contest is unique for parameter values r ≤ 2. This allows proving a revenue ranking result saying that a revenue-maximizing designer capable of biasing the contest always prefers a contest technology with higher accuracy.
Christian Ewerhart
Tullock contest, Nash equilibrium, heterogeneous valuations, discrimination
2017-03
Information transmission in hierarchies
http://d.repec.org/n?u=RePEc:bie:wpaper:570&r=gth
We analyze a game in which players with unique information are arranged in a hierarchy. In the lowest layer each player can decide in each of several rounds either to pass the information to his successor or to hold. While passing generates an immediate payoff according to the value of information, the player can also get an additional reward if he is the last player to pass. Facing this problem while discounting over time determines the playerâ€™s behavior. Once a successor has collected all information from his workers he starts to play the same game with his successor. We state conditions for different Subgame Perfect Nash Equilibria and analyse the time it takes each hierarchy to centralize the information. This allows us to compare different structures and state which structure centralizes fastest depending on the information distribution and other parameters. We show that the time the centralization takes is mostly affected by the least informed players.
Schopohl, Simon
communication network, dynamic network game, hierarchical structure, information transmission
2017-03-14
Targeted campaign competition, loyal voters, and supermajorities
http://d.repec.org/n?u=RePEc:chu:wpaper:17-03&r=gth
We consider campaign competition in which candidates compete for votes among a continuum of voters by engaging in persuasive efforts that are targetable. Each individual voter is persuaded by campaign effort and votes for the candidate who targets more persuasive effort to this voter. Each candidate chooses a level of total campaign effort and allocates their effort among the set of voters. We completely characterize equilibrium for the majoritarian objective game and compare that to the vote-share maximizing game. If the candidates are symmetric ex ante, both types of electoral competition dissipate the rents from office in expectation. However, the equilibria arising under the two electoral objectives qualitatively differ. In majoritarian elections, candidates randomize over their level of total campaign effort, which provides support for the puzzling phenomenon of the emergence of supermajorities in majoritarian systems. Vote-share maximization leads to an equilibrium in which both candidates make deterministic budget choices and reach a precise fifty-fifty split of vote shares. We also study how asymmetry between the candidates affects the equilibrium. If some share of the voters is loyal to one of the candidates, then both candidates expend the same expected efforts in equilibrium, but the advantaged candidate wins with higher probability for majoritarian voting or a higher share of voters for vote-share maximization.
Pierre C. Boyer
Kai A. Konrad
Brian Roberson
Campaign competition; continuous General Lotto game; vote buying; flexible budgets; supermajorities, loyal voters.
2017
Uncertain acts in games
http://d.repec.org/n?u=RePEc:bie:wpaper:571&r=gth
This text reviews a recent approach to modeling "radically uncertain" behavior in strategic interactions. By rigorously rooting the approach in decision theory, we provide a foundation for applications of Knightian uncertainty in mechanism design, principal agent and moral hazard models. We discuss critical assessments and provide alternative interpretations of the new equilibria in terms of equilibrium in beliefs, and as a boundedly rational equilibrium in the sense of a population equilibrium. We also discuss the purification of equilibria in the spirit of Harsanyi.
Riedel, Frank
Knightian Uncertainty in Games, Strategic Ambiguity, Ellsberg Games, Purification
2017-03-15
Providing Efficient Network Access to Green Power Generators : A Long-term Property Rights Perspective
http://d.repec.org/n?u=RePEc:tiu:tiucen:6d7117f0-0893-4db9-a668-ccbb7a977526&r=gth
Coordinating the timing of new production facilities is one of the challenges of liberalized power sectors. It is complicated by the presence of transmission bottlenecks, oligopolistic competition and the unknown prospects of low-carbon technologies. We build a model encompassing a late and early investment stage, an existing dirty (brown) and a future clean (green) technology and a single transmission bottleneck, and compare dynamic efficiency of several market designs. Allocating network access on a short-term competitive basis distorts investment decisions, as brown firms will preempt green competitors by investing early. Dynamic efficiency is restored with long-term transmission rights that can be traded on a secondary market. We show that dynamic efficiency does not require the existence of physical rights for accessing the transmission line, but financial rights on receiving the scarcity revenues generated by the transmission line suffice.
Petropoulos, G.
Willems, Bert
network access; congestion management; renewable energy sources; power markets
2017