nep-gth New Economics Papers
on Game Theory
Issue of 2006‒12‒16
nineteen papers chosen by
Laszlo A. Koczy
Universiteit Maastricht

  1. Approximate equilibria for Bayesian multi-criteria games By Mallozzi,Lina; Pusillo,Lucia; Tijs,Stef
  2. A Simple Test of Learning Theory? By Jim Engle-Warnick†; Ed Hopkins
  3. Information Transmission in Coalitional Voting Games By Roberto Serrano; Rajiv Vohra
  4. Convex games with countable number of players and sequencing situations By Fragnelli,Vito; Llorca,Natividad; Sanchez-Soriano,Joaquin; Tijs,Stef
  5. Bargaining, Reputation and Equilibrium Selection in Repeated Games with Contracts By Dilip Abreu; David G. Pearce
  6. Private monitoring with infinite histories By Christopher Phelan; Andrzej Skrzypacz
  7. Games of Connectivity By Pradeep Dubey; Rahul Garg
  8. An Axiomatization of the Inner Core Using Appropriate Reduced Games By Geoffroy de Clippel
  9. Coalition Formation in Political Games By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  10. Coordination of Mobile Labor By Jakub Steiner
  11. The Core of a coalitional exchange economy By Elena Del Mercato
  12. Learning by Similarity in Coordination Problems By Jakub Steiner; Colin Stewart
  13. On the dimension of the core of the assignment game By Marina Nunez; Carles Rafels
  14. Stochastic Dynamics for the Matching Pennies Game By Ziv Gorodeisky
  15. Coordination failures in network formation. By Nicolas Carayol; Pascale Roux; Murat Yıldızoglu
  16. Multiple Equilibria as a Difficulty in Understanding Correlated Distributions By Anirban Kar; Indrajit Ray; Roberto Serrano
  17. The Emergence of Institutions By Santiago Sanchez-Pages; Stephane Straub
  18. Marginal Contributions and Externalities in the Value By Geoffroy de Clippel; Roberto Serrano
  19. Faire émerger la coopération internationale : une approche expérimentale comparée du bilatéralisme et du multilatéralisme. By Stéphane Betrand; Kene Boun My; Alban Verchère

  1. By: Mallozzi,Lina; Pusillo,Lucia; Tijs,Stef (Tilburg University, Center for Economic Research)
    Abstract: In this paper the existence of Bayesian multi-criteria equilibria in mixed strategies is established for finite Bayesian multi-criteria games. Sufficient conditions are given under which approximate equilibria exist for non-finite Bayesian multi-criteria games.
    Keywords: 91A10; non-cooperative games;Bayesian multi-criteria equilibria
    JEL: C72
    Date: 2006
  2. By: Jim Engle-Warnick†; Ed Hopkins
    Abstract: We report experiments designed to test the theoretical possibility, first discovered by Shapley (1964), that in some games learning fails to converge to any equilibrium, either in terms of marginal frequencies or of average play. Subjects played repeatedly in fixed pairings one of two 3 × 3 games, each having a unique Nash equilibrium in mixed strategies. The equilibrium of one game is predicted to be stable under learning, the other unstable, provided payoffs are sufficiently high. We ran each game in high and low payoff treatments. We find that, in all treatments, average play is close to equilibrium even though there are strong cycles present in the data.
    Keywords: : Games, Learning, Experiments, Stochastic Fictitious Play, Mixed Strategy Equilibria.
    JEL: C72 C73 C92 D83
  3. By: Roberto Serrano; Rajiv Vohra
    Date: 2005
  4. By: Fragnelli,Vito; Llorca,Natividad; Sanchez-Soriano,Joaquin; Tijs,Stef (Tilburg University, Center for Economic Research)
    Abstract: In this paper we study convex games with an infinite countable set of agents and provide characterizations of this class of games. Some difficulties arise when dealing with these infinite games, especially to tackle the vectors of marginal contributions. In order to solve these problems we use a continuity property. Infinite sequencing situations where the number of jobs is countable infinite and the related cooperative TU games are introduced. It is shown that these infinite games are convex and the marginals associated with some orders turn out to be extreme points of the core.
    Keywords: 91A12; Cooperative games;countable number of players;convexity;infinite sequencing situations
    JEL: C71
    Date: 2006
  5. By: Dilip Abreu; David G. Pearce
    Date: 2006–12–08
  6. By: Christopher Phelan; Andrzej Skrzypacz
    Abstract: This paper develops new recursive methods for studying stationary sequential equilibria in games with private monitoring. We first consider games where play has occurred forever into the past and develop methods for analyzing a large class of stationary strategies, where the main restriction is that the strategy can be represented as a finite automaton. For a subset of this class, strategies which depend only on the players’ signals in the last k periods, these methods allow the construction of all pure strategy equilibria. We then show that each sequential equilibrium in a game with infinite histories defines a correlated equilibrium for a game with a start date and derive simple necessary and sufficient conditions for determining if an arbitrary correlation device yields a correlated equilibrium. This allows, for games with a start date, the construction of all pure strategy sequential equilibria in this subclass.
    Date: 2006
  7. By: Pradeep Dubey; Rahul Garg
    Date: 2006–12–08
  8. By: Geoffroy de Clippel
    Date: 2005
  9. By: Daron Acemoglu (MIT); Georgy Egorov (Harvard); Konstantin Sonin (CEFIR)
    Abstract: We study the formation of a ruling coalition in political environments. Each individual is endowed with a level of political power. The ruling coalition consists of a subset of the individuals in the society and decides the distribution of resources. A ruling coalition needs to contain enough powerful members to win against any alternative coalition that may challenge it, and it needs to be self-enforcing, in the sense that none of its subcoalitions should be able to secede and become the new ruling coalition. We first present an axiomatic approach that captures these notions and determines a (generically) unique ruling coalition. We then construct a simple dynamic game that encompasses these ideas and prove that the sequentially weakly dominant equilibria (and the Markovian trembling hand perfect equilibria) of this game coincide with the set of ruling coalitions of the axiomatic approach. We also show the equivalence of these notions to the core of a related non-transferable utility cooperative game. In all cases, the nature of the ruling coalition is determined by the power constraint, which requires that the ruling coalition be powerful enough, and by the enforcement constraint, which imposes that no subcoalition of the ruling coalition that commands a majority is self-enforcing. The key insight that emerges from this characterization is that the coalition is made self-enforcing precisely by the failure of its winning subcoalitions to be self-enforcing. This is most simply illustrated by the following simple finding: with simple majority rule, while three-person (or larger) coalitions can be self-enforcing, two-person coalitions are generically not self-enforcing. Therefore, the reasoning in this paper suggests that three-person juntas or councils should be more common than two-person ones. In addition, we provide conditions under which the grand coalition will be the ruling coalition and conditions under which the most powerful individuals will not be included in the ruling coalition. We also use this framework to discuss endogenous party formation.
    Keywords: Coalition Formation, Collective Choice, Cooperative Game Theory, Political Economy,Self-Enforcing Coalitions, Stability
    JEL: D71 D74 C71
    Date: 2006–11
  10. By: Jakub Steiner
    Abstract: We study coordination failures in many simultaneously occurring coordination problems. Players encounter one of the problems but have the outside option of migrating to one of the remaining ones. Drawing on the global games approach, we show that such a mobile game has a unique equilibrium that allows us to examine comparative statics. The endogeneity of the outside option value and of the migration activity leads to non-monotonicity of welfare with respect to mobility friction; high mobility may hurt players. We apply these “general equilibrium” findings to the problem of the labor market during industrialization as described by Matsuyama [11].
    Keywords: Coordination, General Equilibrium, Global Games, Globalization, Industrialization, Mobility.
    JEL: C72 D82 D83
  11. By: Elena Del Mercato (CSEF - Dipartimento di Scienze Economiche e Statistiche - [Università degli studi di Salerno])
    Abstract: In pure exchange economies, a poor attention has been given to how the individual consumption possibilities of the members of a coalition should be represented. It seems economically reasonable that our knowledge and our possibility to make decisions depend on the coalition we belong to. We define a coalitional exchange economy by considering a pure exchange economy in which the individual consumption sets of consumers within a coalition depend on the membership of the coalition. Our definition includes as a particular case the classical definition of pure exchange economy. We adapt the core concept to a coalitional exchange economy, and we show the non-emptiness of the core. Finally, we discuss more general setting where individual preferences are also depending on the coalitions.
    Keywords: Cooperative game, core, exchange economy, consumption possibility.
    Date: 2006–12–06
  12. By: Jakub Steiner; Colin Stewart
    Abstract: We study a learning process in which subjects extrapolate their experience from similar past strategic situations to the current decision problem. When applied to coordination games, this learning process leads to contagion of behavior from problems with extreme payoffs and unique equilibria to very dissimilar problems. In the long-run, contagion results in unique behavior even though there are multiple equilibria when the games are analyzed in isolation. Characterization of the long-run state is based on a formal parallel to rational equilibria of games with subjective priors. The results of contagion due to learning share the qualitative features of those from contagion due to incomplete information, but quantitatively they differ.
    Keywords: Similarity, learning, contagion, case-based reasoning, global games, coordination, subjective priors.
  13. By: Marina Nunez; Carles Rafels (Universitat de Barcelona)
    Abstract: The set of optimal matchings in the assignment matrix allows to define a reflexive and symmetric binary relation on each side of the market, the equal-partner binary relation. The number of equivalence classes of the transitive closure of the equal-partner binary relation determines the dimension of the core of the assignment game. This result provides an easy procedure to determine the dimension of the core directly from the entries of the assignment matrix and shows that the dimension of the core is not as much determined by the number of optimal matchings as by their relative position in the assignment matrix.
    Keywords: core, assignment game, core dimension
    JEL: C71 C78
    Date: 2006
  14. By: Ziv Gorodeisky
    Abstract: We consider stochastic dynamics for the Matching Pennies game, that behave, in expectation, like best-response dynamics (the continuous fictitious play). We prove convergence to the unique equilibrium by extending the result of Benaim and Weibull [2003] on deterministic approximations for stochastic dynamics to the case of discontinuous dynamics - such as the best-reply dynamics.
    Date: 2006–11
  15. By: Nicolas Carayol; Pascale Roux; Murat Yıldızoglu
    Abstract: In this paper, we make an exploratory use of numerical techniques (genetic algorithms and Monte Carlo simulations) to compute efficient and emergent networks in a spatialized version of the connections model of Jackson and Wolinski (1996). This approach allows us to observe and discuss the coordination failures that arise in a strategic network formation context with link-mediated positive externalities to connections and geographically based connection costs. Our results highlight that, depending on the strength of the externalities, emergent and efficient networks may share several structural properties. Nevertheless, emergent networks have too few local and distant connections and are also too less “coordinated” around some central agents than they should.
    Keywords: Strategic Network Formation; Efficiency; Stability; Coordination; Small Worlds; Genetic Algorithms; Monte Carlo Simulations.
    Date: 2006
  16. By: Anirban Kar; Indrajit Ray; Roberto Serrano
    Date: 2005
  17. By: Santiago Sanchez-Pages; Stephane Straub
    Abstract: This paper analyzes how institutions aimed at coordinating economic interactions may appear. We build a model in which agents play a prisoners’ dilemma game in a hypothetical state of nature. Agents can delegate the task of enforcing cooperation in interactions to one of them in exchange for a proper compensation. Two basic commitment problems stand in the way of institution formation. The first one is the individual commitment problem that arises because an agent chosen to run the institution may prefer to renege ex post. The second one is a “collective commitment” problem linked to the lack of binding agreements on the fee that will be charged by the centre once it is designated. This implies first that a potentially socially efficient institution may fail to arise because of the lack of individual incentives, and second that even if it arises, excessive rent extraction by the institution may imply a sub-optimal efficiency level, explaining the heterogeneity of observed institutional arrangements. An institution is less likely to arise in small groups with limited endowments, but also when the underlying commitment problem is not too severe. Finally, we show that the threat of secession by a subset of agents may endogenously solve part of the second commitment problem.
    Keywords: Institution, Coordination, State of nature, Secession.
    JEL: C72 D02 O17 Z13
  18. By: Geoffroy de Clippel; Roberto Serrano
    Date: 2005
  19. By: Stéphane Betrand; Kene Boun My; Alban Verchère
    Abstract: Nous étudions expérimentalement le comportement de sujets confrontés, dans une population, à une multiplicité de jeux du dilemme du prisonnier, suivant que les interactions sont bilatérales ou multilatérales. Nous observons, (i), une coopération significativement supérieure en cas de bilatéralisme, (ii), son développement dans le temps à l’inverse du multilatéralisme, et enfin, (iii), un niveau de coopération intermédiaire quand les sujets sont simplement regroupés par paires. Ces résultats mettent en lumière l’effet particulièrement favorable du bilatéralisme, ce dernier, de surcroît, n’empêchant pas l’émergence de la coopération totale souhaitée par les approches privilégiant le multilatéralisme.
    Keywords: bilatéralisme, multilatéralisme, coopération, expériences.
    JEL: C72 C78 C92
    Date: 2005

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