Game Theory
http://lists.repec.orgmailman/listinfo/nep-gth
Game Theory
2015-11-21
The Stable Fixtures Problem with Payments
http://d.repec.org/n?u=RePEc:has:discpr:1545&r=gth
We generalize two well-known game-theoretic models by introducing multiple partners matching games, dened by a graph G = (N;E), with an integer vertex capacity function b and an edge weighting w. The set N consists of a number of players that are to form a set M E of 2-player coalitions ij with value w(ij), such that each player i is in at most b(i) coalitions. A payo is a mapping p : N N ! R with p(i; j) + p(j; i) = w(ij) if ij 2 M and p(i; j) = p(j; i) = 0 if ij =2 M. The pair (M; p) is called a solution. A pair of players i; j with ij 2 E nM blocks a solution (M; p) if i; j can form, possibly only after withdrawing from one of their existing 2-player coalitions, a new 2-player coalition in which they are mutually better o. A solution is stable if it has no blocking pairs. We give a polynomial-time algorithm that either nds that no stable solution exists, or obtains a stable solution. Previously this result was only known for multiple partners assignment games, which correspond to the case where G is bipartite (Sotomayor, 1992) and for the case where b 1 (Biro et al., 2012). We also characterize the set of stable solutions of a multiple partners matching game in two dierent ways and perform a study on the core of the corresponding cooperative game, where coalitions of any size may be formed. In particular we show that the standard relation between the existence of a stable solution and the non-emptiness of the core, which holds in the other models with payments, is no longer valid for our (most general) model.
Peter Biró
Walter Kern
Daniel Paulusma
Peter Wojuteczky
stable solutions, cooperative game, core
2015-09
Forecasting with Colonel Blotto
http://d.repec.org/n?u=RePEc:unm:umagsb:2015025&r=gth
In this paper we design and test a competitive forecasting mechanism based on the Colonel Blotto game. In the game, forecasters allocate a fixed number of resources to different battlefields. Each field is realized with a probability that is determined by a stochastic process. Subjects learn about the underlying process during the course of the experiment and thereby form beliefs about the probability that a field is selected. Once a field is selected, the subject competes for a payoff that is associated with the number of resources allocated to that field. We implement two different payment rules, a lottery and an auction, and find that the lottery outperforms the auction. This relative underperformance of the auction can be attributed to the strategic uncertainty being too high in the auction and the strong incentives to misalign allocations.
Peeters R.J.A.P.
Wolk K.L.
Noncooperative Games; Design of Experiments: Laboratory, Group Behavior; Asymmetric and Private Information; Mechanism Design; Search; Learning; Information and Knowledge; Communication; Belief;
2015
From Sabotage Games to Border Protection
http://d.repec.org/n?u=RePEc:hit:hitcei:2015-2&r=gth
Sabotage games on a graph involve Runner who wants to travel between two given vertices and Blocker who aims to prevent Runner from arriving at his destination by destroying edges. This paper introduces and studies several generalizations of sabotage games. First, it completely characterizes games with multiple destinations on weighted trees for both local and global cutting rules of arbitrary capacity, using an algorithmic labeling procedure. Second, it introduces the transformation procedure that associates a weighted tree with any weighted graph. The procedure allows complete characterization of games on weighted graphs for local cutting rules of arbitrary capacity and provides sufficient conditions for Blocker to win for global cutting rules. The applications of sabotage games to the issue of border security are discussed.
Kvasov, Dmitriy
sabotage games, games on graphs, dynamic graph reliability, network interdiction, border security
2015-06
Efficiency versus equality in real-time bargaining with communication
http://d.repec.org/n?u=RePEc:uea:wcbess:15-18&r=gth
We collect experimental data from unstructured bargaining situations where bargainers are free to communicate via written messages. We vary the set of feasible contracts, thereby allowing us to assess the focality of three properties of bargaining outcomes: equality, Pareto efficiency, and total earnings maximization. Our main findings are that subjects avoid an equal earnings contract if it is Pareto inefficient; a large proportion of bargaining pairs avoid equal and Pareto efficient contracts in favor of unequal and total earnings maximizing contracts, and this proportion increases when unequal contracts offer larger earnings to one of the players, even though this implies higher inequality. Finally, observed behavior violates the Independence of Irrelevant Alternatives axiom, a result we attribute to a 'compromise effect'.
Fabio Galeotti
Maria Montero
Anders Poulsen
bargaining, efficiency, equality, communication, experiment, independence of irrelevant alternatives
2015-10-24
Diffusing Coordination Risk
http://d.repec.org/n?u=RePEc:red:sed015:1350&r=gth
This paper designs an optimal mechanism to correct coordination failure. A planner wants her agents to coordinate on a cooperative action. Agents gather noisy private information regarding the underlying fundamental and decide whether to cooperate or not. The global game literature uniquely identifies the chance of coordination failure when the coordination risk is concentrated at one point in time. We analyze the case when the planner diffuses the coordination risk over time. The planner approaches the agents sequentially - only a proportion of agents at a time and advancing further only when the coordination failure has been averted so far. The public information of survival works as a coordination device and helps in mitigating the coordination risk. We show that if the planner can diffuse the coordination risk enough, then she can achieve the first best as the unique equilibrium outcome. However, if the planner has only limited power to diffuse the coordination risk, multiple equilibria can arise. A max-min planner should diffuse the coordination risk as much as possible. We also show that if some groups are more reluctant to cooperate than others, a max-min planner should approach the more reluctant groups first. Our mechanism is robust to various generalizations and can be applied to a wide range of coordination games.
Zhen Zhou
Deepal Basak
2015
Beyond Truth-Telling: Preference Estimation with Centralized School Choice
http://d.repec.org/n?u=RePEc:tse:wpaper:29845&r=gth
We propose novel approaches and tests for estimating student preferences with data from school choice mechanisms, e.g., the Gale-Shapley Deferred Acceptance. Without requiring truth-telling to be the unique equilibrium, we show that the matching is (asymptotically) stable, or justified-envy-free, implying that every student is assigned to her favorite school among those she is qualified for \emph{ex post}. Having validated the methods in simulations, we apply them to data from Paris and reject truth-telling but not stability. Our estimates are then used to compare the sorting and welfare effects of alternative admission criteria prescribing how schools rank students in centralized mechanisms.
Fack, Gabrielle
Grenet, Julien
He, Yinghua
Gale-Shapley Deferred-Acceptance Mechanism, School Choice, Stable Matching, Student Preferences, Admission Criteria
2015-10
The Vote With the Wallet as a Multiplayer Prisoner’s Dilemma
http://d.repec.org/n?u=RePEc:rtv:ceisrp:359&r=gth
Socially responsible consumers and investors are increasingly using their consumption and saving choices as a “vote with the wallet” to award companies which are at vanguard in reconciling the creation of economic value with social and environmental sustainability. In our paper we model the vote with the wallet as a multiplayer prisoner’s dilemma, outline equilibria and possible solutions to the related coordination failure problem, apply our analysis to domains in which the vote with the wallet is empirically more relevant, and provide policy suggestions
Leonardo Becchetti
Francesco Salustri
Corporate Social Responsibility, Multiplayer Prisoner’s Dilemma, Voting with the Wallet
2015-11-08
Voting and transfer payments in a threshold public goods game
http://d.repec.org/n?u=RePEc:zbw:kitwps:73&r=gth
In a laboratory experiment, we investigate if groups consisting of two heterogeneous player types (with different marginal contribution costs) can increase their total contributions and payoffs in a threshold public goods game if transfer payments are possible among the players. We find that transfer payments are indeed used in many groups to shift contributions from high-cost players to low-cost players, thereby not only increasing social welfare, but also equalizing payoffs. In a repeated setting with individual voluntary contributions and transfers, this redistribution effect takes a few rounds to manifest and high-cost players benefit the most in terms of payoffs. The same beneficial effect of transfer payments can also be achieved in a one-shot setting by having the groups vote unanimously on contributions and transfers of all players.
Feige, Christian
Ehrhart, Karl-Martin
threshold public good,transfer payments,experimental economics,unanimous voting,committee,heterogeneity
2015
A decomposition for the space of games with externalities
http://d.repec.org/n?u=RePEc:pra:mprapa:67932&r=gth
The main goal of this paper is to present a different perspective than the more `traditional' approaches to study solutions for games with externalities. We provide a direct sum decomposition for the vector space of these games and use the basic representation theory of the symmetric group to study linear symmetric solutions. In our analysis we identify all irreducible subspaces that are relevant to the study of linear symmetric solutions and we then use such decomposition to derive some applications involving characterizations of classes of solutions.
Sanchez-Perez, Joss
Games with externalities; value; representation theory; symmetric group.
2015
Markets for leaked information
http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2015305&r=gth
We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting effect, allocating the information to those types of third parties who harm the agent most. In equilibrium, this limits information transmission by the agent, but never fully deters it. We also consider agents who naively provide information to the market. Their presence renders traded information more valuable and, thus, harms sophisticated agents by increasing the third party's demand for information. Half-baked regulatory interventions may hurt naive agents without helping sophisticated agents. Comparing monopoly and oligopoly markets, we find that oligopoly is often better for the agent: it requires a higher value of traded information and therefore has to grant the agent more privacy.
Huck, Steffen
Weizsäcker, Georg
privacy,markets for information,naivete
2015
Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis
http://d.repec.org/n?u=RePEc:ubc:pmicro:yoram_halevy-2015-21&r=gth
We examine coordination in private provision of public goods when agents' contributions are complementary. When complementarity is sufficiently high an additional full-contribution equilibrium emerges. We experimentally investigate subjectsâ€™ behavior using a between-subject design that varies complementarity. When two equilibria exist, subjects coordinate on the full-contribution equilibrium. When complementarity is sizable but only a zero-contribution equilibrium exists, subjects persistently contribute above it. Choice and non-choice data reveal heterogeneity among subjects and two distinct types. Homo pecuniarius maximizes profits by best-responding to beliefs, while Homo behavioralis identifies this strategy but chooses to deviate from it â€“ sacrificing pecuniary rewards to support altruism or competitivene
Fenig, Guidon
Gallipoli, Giovanni
Halevy, Yoram
Public goods, Voluntary Contribution Mechanism, Complementarity, Coordination, Altruism, Competitiveness, Warm-Glow, Joy of Winning, Laboratory Experi
2015-11-15
Strategy proofness and unanimity in private good economies with single-peaked preferences
http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01226803&r=gth
In this paper we examine the relation between strategy-proofness and unanimity in a domain of private good economies with single-peaked preferences. We prove that, under a mild condition, a social choice function satisfies strategy-proofness if and only if it is unanimous. As implication, we show that when the property of citizen sovereignty holds, strategy proofness and Maskin monotonicity become equivalent. We also give applications to implementation literature: We provide a full characterization for dominant strategy implementation, standard Nash implementation, and partially honest Nash implementation and we prove that these theories are equivalent.
Mostapha Diss
Ahmed Doghmi
Abdelmonaim Tlidi
Single-peaked preferences, Maskin monotonicity, Private good economies,Strategy-proofness, Unanimity
2015
Dynamic Bidding in Second Price Auction
http://d.repec.org/n?u=RePEc:red:sed015:1346&r=gth
We consider equilibrium bidding behavior in a dynamic second price auction where agents have the option to increase bids at random times and values follow a Markov process. We prove that equilibrium exists and is unique and give an algorithm to solve for bids as a function of time and values. Equilibrium bids equal the expected final value conditional on the bid placed being the final one, meaning that either the agent doesn't get another opportunity to rebid or chooses not to increase this bid if given the option. This results in adverse selection with respect to a bidder's own future strategy, and as a result bids are shaded relative to the bidder's expected value. This is true in spite of values being independent across bidders. Under mild conditions, desired bids increase as time increases and the close of the auction is approached. Our results are consistent with repeated bidding and sniping, two puzzling observations in eBay auctions.
Maryam Saeedi
Hugo A. Hopenhayn
2015
Multilateral versus sequential negotiations over climate change
http://d.repec.org/n?u=RePEc:grt:wpegrt:2015-34&r=gth
We discuss a model of gradual coalition formation with positive externalities in which a leading country endogenously decides whether to negotiate multilaterally or sequentially over climate change. We show that the leader may choose a sequential path, and that the choice is determined by the convexity of the TU-game and the free-rider payoffs of the followers. Except in a few clearly defined cases, the outcome of the negotiation process is always the grand coalition, although the process may need some time. This holds for the standard IEA game with heterogeneous players even if the grand coalition is not stable in a multilateral context. We also analyze the role of a facilitating agency. The agency has an incentive to speed up intra-stage negotiations and to extend the period between negotiation stages in a sequential process.
PEREAU Jean-Christophe
CAPARROS Alejandro
multilateral bargaining, endogenous coalition formation, international negotiations, mediator, international environmental agreements.
2015