nep-gth New Economics Papers
on Game Theory
Issue of 2006‒05‒13
seven papers chosen by
Laszlo A. Koczy
Universiteit Maastricht

  1. Concept Lattices and Convexity of Coalitional Game Forms By Stefano Vannucci
  2. Bilateral Commitment By Sophie Bade; Guillaume Haeringer; Ludovic Renou
  3. Coalition Strategy-Proofness and Fairness By Svensson, Lars-Gunnar
  4. Partnership with Partial Commitment By Levy, Amnon
  5. Eight degrees of separation By Paolo Pin
  6. Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study By Andersson, Ola; Carlsson, Hans; Holm, Håkan
  7. Non-neutrality of economic policy: An application of the Tinbergen-Theil's approach to a strategic context. By Nicola Acocella; Giovanni Di Bartolomeo

  1. By: Stefano Vannucci
    Abstract: The concept lattice of a coalitional game form is introduced and advocated as a structural classificatory tool. The basic properties of such lattices are studied. Sufficient concept-latticial properties for convexity of the underlying coalitional game form are identified. Spectral issues concerning widths and lengths of concept lattices of convex CGFs are also addressed
    JEL: C00 D71
    Date: 2006–03
  2. By: Sophie Bade (Department of Economics, Penn State University); Guillaume Haeringer (Department of Economics, Universitat Autonoma de Barcelona); Ludovic Renou (School of Economics, University of Adelaide)
    Abstract: We consider non-cooperative environments in which two players have the power to commit but cannot sign binding agreements. We show that by committing to a set of actions rather than to a single action, players can implement a wide range of action profiles. We give a complete characterization of implementable profiles and provide a simple method to find them. Profiles implementable by bilateral commitments are shown to be generically inefficient. Surprisingly, allowing for gradualism (i.e., step by step commitment) does not change the set of implementable profiles.
    Keywords: Commitment, self-enforcing, treaties, inefficiency, agreements, Pareto-improvement.
    JEL: C70 C72 H87
    Date: 2006–05
  3. By: Svensson, Lars-Gunnar (Department of Economics, Lund University)
    Abstract: This paper considers a fair division problem with indivisible objects, like jobs, houses, positions, etc., and one divisible good (money). The individuals consume money and one object each. The class of fair allocation rules that are strategy-proof in the strong sense that no coalition of individuals can improve the allocation for all of its members, by misrepresenting their preferences, is characterized. It turns out that given a regularity condition, the outcome of a fair and coalition strategy-proof allocation rule must maximize the use of money subject to upper quantity bounds determined by the allocation rule. Due to these restrictions the outcomes of the allocation rule are Pareto efficient only for some preference profiles. In a multi-object auction interpretation of the model, the result is a complete characterization of coalition strategy-proof auction rules.
    Keywords: Indivisibilities; fairness; coalition strategy-proofness; wages; multiple-object auction
    JEL: C68 C71 C78 D61 D63 D71 D78
    Date: 2006–04–27
  4. By: Levy, Amnon (University of Wollongong)
    Abstract: This paper derives the Nash-equilibrium degrees of commitment to a partnership where lack of full commitment fuels suspicion and increases potential losses for partners.
    Keywords: Structural break, unit root test, Lebanon economy
    JEL: C72 D80
    Date: 2006
  5. By: Paolo Pin (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The paper presents a model of network formation where every connected couple give a contribution to the aggregate payoff, eventually discounted by their distance, and the resources are split between agents through the Myerson value. As equilibrium concept we adopt a refinement of pairwise stability. The only parameters are the number N of agents and a constant cost k for every agent to maintain any single link. This setup shows a wide multiplicity of equilibria, all of them connected, as k ranges over non trivial cases. We are able to show that, for any N, when the equilibrium is a tree (acyclical connected graph), which happens for high k, and there is no decay, the diameter of such a network never exceeds 8 (i.e. there are no two nodes with distance greater than 8). Adopting no decay and studying only trees, we facilitate the analysis but impose worst-case scenarios: we conjecture that the limit of 8 should apply for any possible non--empty equilibrium with any decay function.
    Keywords: Network Formation, Myerson value
    JEL: D85
    Date: 2006
  6. By: Andersson, Ola (Department of Economics, Lund University); Carlsson, Hans (Department of Economics, Lund University); Holm, Håkan (Department of Economics, Lund University)
    Abstract: This paper explores experimentally the effects of costly communication possibilities in market entry games. It is shown that these effects depend on whether entry costs are symmetric or asymmetric. In the former, but not the latter case, communication possibilities increase coordination success substantially and are likely to generate inferior outcomes for consumers. Furthermore, cost asymmetries provide a tacit coordination cue that is robust to changes in the game and is used by experienced players as a substitute to communication. It is also shown that although communication opens up for aggressive market domination strategies, such strategies are not used often successful.
    Keywords: Communication; Market Entry; Coordination
    JEL: C72 C91 D43 K21 L41
    Date: 2006–05–03
  7. By: Nicola Acocella; Giovanni Di Bartolomeo
    Abstract: Issues of policy effectiveness and neutrality are widespread in the economic literature. They have been increasingly raised in specific contexts within the class of LQ (linear-quadratic) policy games in the last 20 years, notably with reference to monetary policy. The more general conditions ensuring nonneutrality in a strategic environment remain however to be inquired. We fill this gap by applying the classical theory of economic policy to a strategic context. This is also useful to highlight some existence conditions for policy game solutions. We restrict ourselves to the common LQ-games in a static perfect information framework, but our simple logic can be extended to other more general situations.
    Keywords: LQ-policy games, policy ineffectiveness, controllability.
    JEL: C72 E52 E61
    Date: 2005–07

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