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on Game Theory |
| By: | Bochet,Olivier (METEOR) |
| Abstract: | Consider the problem of exact Nash Implementation of social choice correspondences. Define a lottery mechanism as a mechanism in which the planner can randomize on alternatives out of equilibrium while pure alternatives are always chosen in equilibrium. When preferences over alternatives are strict, we show that Maskin monotonicity (Maskin, 1999) is both necessary and sufficient for a social choice correspondence to be Nash implementable. We discuss how to relax the assumption of strict preferences. Next, we examine social choice correspondences with private components. Finally, we apply our method to the issue of voluntary implementation (Jackson and Palfrey, 2001). |
| Keywords: | microeconomics ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2005036&r=gth |
| By: | Bochet,Olivier (METEOR) |
| Abstract: | We construct an elementary mechanism (Dutta, Sen and Vohra (1995)) that Nash implements the Constrained Walrasian correspondence. We extend it to incomplete and non-exclusive information economies by enlarging the message space of agents. We characterize the set of Bayesian equilibrium outcomes of the mechanism, and thus characterize an extension of the Constrained Walrasian correspondence when one switches from complete to incomplete information. First, measurability restrictions on allocations do not emerge from the strategic behavior of agents: there exist simple economies for which the set of Constrained Rational Expectations equilibrium allocations is not contained in the set of equilibrium outcomes of the mechanism. Next, by imposing measurability restrictions on allocations, the mechanism globally implements the Constrained Rational Expectations Equilibrium correspondence. This result shows game-theoretic connections between these two market equilibrium concepts. However, it is obtained at the price of strong restrictions on the behavior of agents.price of strong restrictions on the behavior of agents. |
| Keywords: | microeconomics ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2005035&r=gth |
| By: | Roberto Serrano; Rajiv Vohra |
| Abstract: | A core allocation of a complete information economy can be characterized as one that would not be unanimously rejected in favor of another feasible alternative by any coalition. We use this test of coalitional voting in an incomplete information environment to formalize a notion of resilience. Since information transmission is implicit in the Bayesian equilibria of such voting games, this approach makes it possible to derive core concepts in which the transmission of information among members of a coalition is endogenous. Our results lend support to the credible core of Dutta and Vohra [4] and the core proposed by Myerson [11] as two that can be justified in terms of coalitional voting |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we055726&r=gth |
| By: | Roberto Serrano; Ken-Ichi Shimomura |
| Abstract: | We propose positive and normative foundations for the average prekernel of NTU games, and compare them with the existing ones for the prekernel. In our non-cooperative analysis, the average prekernel is approximated by the set of equilibrium payoffs of a game where each player faces the possibility of bargaining at random against any other player. In the cooperative analysis, we characterize the average prekernel as the unique solution that satisfies a set of Nash-like axioms for two-person games, and versions of average consistency and its converse for multilateral settings |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we055827&r=gth |
| By: | David Ettinger; Philippe Jehiel |
| Abstract: | This paper proposes an equilibrium approach to deception where deception is defined to be the process by which actions are chosen to induce erroneous inferences so as to take advantage of them. Specifically, we introduce a framework with boundedly rational players in which agents make inferences based on a coarse information about others' behaviors: Agents are assumed to know only the average reaction function of other agents over groups of situations. Equilibrium requires that the coarse information available to agents is correct, and that inferences and optimizations are made based on the simplest theories compatible with the available information. We illustrate the phenomenon of deception and how reputation concerns may arise even in zero-sum games in which there is no value to commitment. We further illustrate how the possibility of deception affects standard economic insights through a number of stylized applications including a monitoring game and two simple bargaining games. The approach can be viewed as formalizing into a game theoretic setting a well documented bias in social psychology, the Fundamental Attribution Error. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-28&r=gth |
| By: | Andreoni,J.; Castillo,M.; Petrie,R. (University of Wisconsin-Madison, Social Systems Research Institute) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:att:wimass:200413&r=gth |
| By: | César Martinelli |
| Date: | 2005–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:784828000000000461&r=gth |
| By: | Andreoni,J.; Che,Y.-K.; Kim,J. (University of Wisconsin-Madison, Social Systems Research Institute) |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:att:wimass:20066&r=gth |
| By: | Maria Arbatskaya; Hideo Konishi |
| Abstract: | This paper compares equilibrium outcomes in search markets with and without referrals. Although consumers would benefit from honest referrals, it is not at all clear whether firms would unilaterally provide information about competing offers since such information could encourage a consumer to purchase the product elsewhere. In a model of a horizontally differentiated product and sequential consumer search, we show that valuable referrals can arise as a part of equilibrium: firm will give referrals to consumers whose ideal product is sufficiently far from the firm’s offering. The effect of referrals on the equilibrium prices is examined, and it is found that prices are higher in markets with referrals. Although consumers can be made worse off by the existence of referrals, referrals lead to a Pareto improvement as long as search cost is not too low relative to product heterogeneity. The effects of referral fees and third-party referrals are examined, and policy implications are drawn. |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0521&r=gth |