nep-gth New Economics Papers
on Game Theory
Issue of 2006‒07‒09
four papers chosen by
Laszlo A. Koczy
Universiteit Maastricht

  1. A constructive and elementary proof of Reny's theorem By Philippe Bich
  2. Equal-Budget Choice Equivalent Solutions in Exchange Economies By Bochet Olivier
  3. Bidding behavior in the bisection auction – an experimental investigation By Grigorieva Elena; Strobel Martin
  4. Enfranchisement, Intra-Elite Conflict and Bargaining By Ghosal, Sayantan; Proto, Eugenio

  1. By: Philippe Bich (CES - Centre d'Economie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: In a recent but well known paper, Reny proved the existence of Nash equilibria for better-reply-secure games, with possibly discontinuous payoff functions. Reny's proof is purely existential, and is similar to a contradiction proof : it gives non hint of a method to compute a Nash equilibrium in the class of games considered. In this paper, we adapt the arguments of Reny in order to obtain, for better-reply-secure games : an elementary proof of Nash equilibria existence, which is a consequence of Kakutani's theorem, and a “constructive” proof, in the sense that we obtain Nash equilibria as limits of fixed-point of well chosen correspondences.
    Keywords: Reny's theorem ; discontinuous payoffs.
    Date: 2006–06–28
  2. By: Bochet Olivier (METEOR)
    Abstract: Given a family of linear budget sets, an allocation is equal opportunity equivalent (Thomson, 1994) if there exists a common budget set such that each agent is indi¤erent between the bundle that he gets and the best bundle he can obtain in the choice set. We first study therobustness properties of equal opportunity equivalent correspondences with respect to change in preferences. We impose independence to irrelevant preference changes and connect this property with the implementation of rules via some game-theoretic solution concept. We provide an equivalence result with the equal-income Walrasian rule. Next, we study robustness with respect to change in the number of agents and derive a haracterization of the equal-income Walrasian rule. Our results provide additional justifications for the equal-division of resources as a first step toward fairness.
    Keywords: microeconomics ;
    Date: 2006
  3. By: Grigorieva Elena; Strobel Martin (METEOR)
    Abstract: We present a laboratory experiment in which we investigate bidding behavior with independent private values in the recently proposed bisection auction, and compare it with two classical auction formats - the Vickrey auction and the English auction. We test whether subjects behave strategically equivalent, following the dominant truth-telling strategy, as predicted by theory. Furthermore, we provide some insights concerning the learning process, the efficiency of allocation, and the revenue to the auctioneer. Data show that the bisection auction performs better than the Vickrey auction and only in some terms worse than the English auction.
    Keywords: Economics ;
    Date: 2006
  4. By: Ghosal, Sayantan (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick)
    Abstract: Does power sharing between competing elites result in franchise extension to non-elites? In this paper, we argue that competing, risk-averse elites will enfranchise non-elites as in-surance against future, uncertain imbalances in relative bargaining power. We show that negligibly small changes in the bargaining power of non-elites, conditional on enfranchisment, via coalition formation, constrains the bargaining power of the stronger elite and result in discontinuous changes in equilibrium surplus division. Our results are robust to public good provision following enfranchisement when there is reference heterogeneity over the location of the public good across the different elites. We conclude with a comparative analysis of Indian democracy and show that our model is able to account for some of the distinctive features of Indian democracy.
    Keywords: enfranchisemnt ; elite ; non-elites ; conflict ; bargaining ; risk-sharing ; Indian democracy
    JEL: D72 D74 O57
    Date: 2006

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