nep-gth New Economics Papers
on Game Theory
Issue of 2006‒03‒11
four papers chosen by
Laszlo A. Koczy
Universiteit Maastricht

  1. Sequential Formation of Coalitions through Bilateral Agreements in a Cournot Setting By Inés Macho-Stadler; David Pérez-Castrillo; Nicolás Porteiro
  2. An Experiment on subjective Game Valuations By Aurora Garcia-Gallego; Nikolaos Georgantzis; Maria Jose Gil Molto; Vicente Orts
  3. Overcoming Incentive Constraints? The (In-)effectiveness of Social Interaction By Dirk Engelmann; Veronika Grimm
  4. Bidding Behavior in Multi-Unit Auctions - An Experimental Investigation By Dirk Engelmann; Veronika Grimm

  1. By: Inés Macho-Stadler (Department of Economics, Universidad Autónoma de Barcelona); David Pérez-Castrillo (Department of Economics, Universidad Autónoma de Barcelona); Nicolás Porteiro (Department of Economics, Universidad Pablo de Olavide)
    Abstract: We study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any Subgame Perfect Equilibrium of the game is the grand coalition, provided the initial number of firms is high enough and they are sufficiently patient.
    Keywords: Coalition formation, bilateral agreements, Cournot.
    JEL: C72 D62 D40
    Date: 2006–02
  2. By: Aurora Garcia-Gallego (LEE/LINEEX and Dpt Economics, Universitat Jaume I); Nikolaos Georgantzis (LEE/LINEEX and Dpt Economics, Universitat Jaume I); Maria Jose Gil Molto (Dpt Economics, Loughborough University); Vicente Orts (IEI, LEE and Dpt Economics, Universitat Jaume I)
    Abstract: We experimentally test the hypothesis that players' valuations of a game coincide with their Nash equilibrium earnings. Our results offer significantly less support for this hypothesis than for the prediction of dominant strategy play.
    Keywords: Game Value, Subgame Perfection, Dominant Strategies, Behavioral Game Theory
    JEL: C72 C91
    Date: 2006–04
  3. By: Dirk Engelmann; Veronika Grimm
    Abstract: We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences. Applying the linking mechanism suggested by Jackson and Sonnenschein (2005) captures nearly all achievable efficiency gains. Repeated interaction leads to significant gains in truthful representation and efficiency only if players can choose their partners.
    Keywords: Experimental Economics, Mechanism Design, Implementation, Linking, Bayesian Equilibrium, Efficiency
    JEL: A13 C72 C91 C92 D64 D72 D80
    Date: 2006–02–28
  4. By: Dirk Engelmann; Veronika Grimm
    Abstract: We present laboratory experiments of five different multi-unit auction mechanisms. Two units of a homogeneous object were auctioned off among two bidders with flat demand for two units. We test whether expected demand reduction occurs in open and sealed-bid uniform-price auctions. Revenue equivalence is tested for these auctions as well as for the Ausubel, the Vickrey and the discriminatory sealed-bid auction. Furthermore, we compare the five mechanisms with respect to the efficient allocation of the units.
    Keywords: Multi-Unit Auctions, Demand Reduction, Experimental Economics
    JEL: D44 C91
    Date: 2006–02–28

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