nep-gth New Economics Papers
on Game Theory
Issue of 2006‒02‒05
eight papers chosen by
Lászlo A. Koczy
Universiteit Maastricht

  1. COALITON FORMATION AND STABILITY By José Alcalde; Antonio Romero Medina
  2. On Myopic Equilibria in Dynamic Games with Endogenous Discounting By Wilko Bolt; Alexander Tieman
  4. Different Policy Objectives of the Road Pricing Problem – a Game Theory Approach By Dusica Joksimovic; Erik T. Verhoef; Michiel Bliemer
  5. A market game approach to differential information economies By Guadalupe Fugarolas; Carlos Herves Beloso; Emma Moreno Garcia; Juan Pablo Torres-Martinez
  6. Giving in Dictator Games: Regard for Others or Regard by Others? By Alexander K. Koch; Hans-Theo Normann
  7. Modelling bargaining behaviors within biotech clusters - Towards the "power of the weak" emergence? By Isabelle Leroux; Alain Berro
  8. FUNCTIONAL SUNSPOT EQUILIBRIA By Shurojit Chatterji; Subir Chattopadhyay

  1. By: José Alcalde (Universidad de Andalucía); Antonio Romero Medina (Universidad Carlos III de Madrid)
    Abstract: This paper studies a class of NTU coalition formation games in which every player's payoff depends only on the members of her coalition. We identify four natural conditions on individuals' preferences and show that, under each condition, stable (core) allocations exists.
    Keywords: Coalition Formation, Core, NTU Games, Stability
    JEL: C78 D78
    Date: 2005–06
  2. By: Wilko Bolt; Alexander Tieman
    Abstract: We derive a stationary equilibrium in a two-player multi-stage game with endogenous discounting. At each stage, the probability to reach the next stage is determined by the players’ current actions. We assume that the players are myopic in the sense that they take the future strategies of their opponents as given. We find that the stationary myopic equilibrium of the infinite-horizon multi-stage game corresponds to the infinite repetition of a Nash equilibrium of an induced (one-shot) limit game. Interestingly, this stationary myopic equilibrium is singled out when studying limiting equilibria of the associated multi-stage game with a finite horizon.
    Keywords: dynamic game; myopic equlibrium; discounting; equilibrium selection.
    JEL: C72 C73 G21
    Date: 2005–12
  3. By: Federico Valenciano (Universidad del País Vasco); Annick Laruelle (Universidad de Alicante)
    Abstract: Committees are often made up of representatives of different-sized groups of individuals, and make decisions by means of a voting rule which specifies what vote configurations can pass a decision. This raises the question of the choice of the optimal voting rule, given the different sizes of the groups that members represent. In this paper we take a new departure to address this problem, assuming that the committee is a bargaining scenario in which negotiations take place 'in the shadow of the voting rule' in search of unanimous consensus. That is, a general agreement is looked for, but any winning coalition can enforce an agreement.
    Keywords: Voting rule, Bargaining, Nash solution.
    Date: 2005–09
  4. By: Dusica Joksimovic; Erik T. Verhoef; Michiel Bliemer
    Abstract: Using game theory we investigate a new approach to formulate and solve optimal tolls with a focus on different policy objectives of the road authority. The aim is to gain more insight into determining optimal tolls as well as into the behavior of users after tolls have been imposed on the network. The problem of determining optimal tolls is stated and defined using utility maximization theory, including elastic demand on the travelers’ side and different objectives for the road authority. Game theory notions are adopted regarding different games and players, rules and outcomes of the games played between travelers on the one hand and the road authority on the other. Different game concepts (Cournot, Stackelberg and monopoly game) are mathematically formulated and the relationship between players, their payoff functions and rules of the games are defined for very simplistic cases. The games are solved for different scenarios and different objectives for the road authority, using the Nash equilibrium concept. Using the Stackelberg game concept as being most realistic for road pricing, a few experiments are presented illustrating the optimal toll design problem subject to different pricing policies considering different objectives of the road authority. Results show different outcomes both in terms of optimal tolls as well as in payoffs for travelers. There exist multiple optimal solutions and objective function may have a non- continuous shape. The main contribution is the two-level separation between of the users from the road authority in terms of their objectives and influences.
    Date: 2005–08
  5. By: Guadalupe Fugarolas; Carlos Herves Beloso; Emma Moreno Garcia; Juan Pablo Torres-Martinez (Department of Economics PUC-Rio)
    JEL: C72 D51 D82
    Date: 2005–12
  6. By: Alexander K. Koch (Department of Economics, Royal Holloway, University of London); Hans-Theo Normann (Department of Economics, Royal Holloway, University of London)
    Abstract: Recent bargaining experiments demonstrated an impact of anonymity and incomplete information on subjects' behavior. This has rekindled the question whether “fair” behavior is inspired by regard for others or is explained by external forces. To test for the importance of external pressure we compare a standard double blind dictator game to a treatment which provides no information about the source of dictator offers, and where recipients do not even know that they participate in an experiment. We find no differences between treatments. This suggests that those dictators who give are purely internally motivated, as asserted by models of other-regarding preferences.
    Keywords: dictator games, altruism, social preferences
    JEL: A13 C91 D64
    Date: 2005–08
  7. By: Isabelle Leroux; Alain Berro
    Abstract: If spatial and industrial economics theorical models, such as industrial districts, clusters, or learning regions propose a large analysis of differentiated coordination mecanisms, it however not really takes into account behavior of dispute dynamics, such as conflict of bargaining and power, which can explain both diversity and ambivalence of local coordinations. So, our purpose in this contribution is to bring to light that bargaining and power conflicts are at stake in coordinations structuration within territories. We base this contribution on Artificial Life simulations involving public and private local actors who bargain to share a local resource using more or less sophisticated strategies. On a methodologic point of view, our thought is based on an empirical established fact. Analysis of a biotechnology cluster in Toulouse-France (Leroux I., 2002, 2004) indeed contributes to bring to light that coordinations involving pharmaceutical industry, local communities and local research laboratories are based on direct or indirect evolving domination and concession bargaining games. If industrial firms play "the power of the weak" game, making concession of their decision power to public research laboratories, they endeavour systematically to exerce an influence or a discrimination power, by using hided and indirect means that forward by local communities.Starting from this established fact, we propose Artificial Life simulations of local bargaining games, inspired from the T. Ellingsen (1997) bargaining evolutionnary game. This is a Nash demand game under ultimatum. It leads to the interaction of obstinate agents whose demands are independent of those of the adversaries, and sophisticated agents who adapt their demand to that hoped for of their adversaries rather than gain nothing. As a result, our simulations show that bargainings between these local actors lead to an agreement which is not a perfect share, or an "universal" rule, but a compromise frequently hiding complex mecanisms of domination and concession. The main contribution of these simulations, which are based on genetic algorithms, is to put in a prominent position the variations of behavioral rules. We show how bargaining is an evolving processus based on domination and concession behaviors (influence, coercion,…) bringing to light the T. Schelling (1960) "power of the weak". This result brings to the fore the question of flexibility and phasing dynamics of power behaviors in local coordination bargainings. This model can contributes to open new researches focused on power and conflict strategies within local coordinations.
    Date: 2005–08
  8. By: Shurojit Chatterji (Centro de Investigación Económica, ITAM); Subir Chattopadhyay (Universidad de Alicante)
    Abstract: Consider a one step forward looking model where agents believe that the equilibrium values of the state variable are determined by a function whose domain is the current value of the state variable and whose range is the value for the subsequent period. An agent's forecast for the subsequent period uses the belief, where the function that is chosen is allowed to depend on the current realization of an extrinsic random process, and is made with knowledge of the past values of the state variable but not the current value. The paper provides (and characterizes) the conditions for the existence of sunspot equilibria for the model described.
    Keywords: extrinsic uncertainty, stochastic equilibria
    Date: 2005–12

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