nep-gth New Economics Papers
on Game Theory
Issue of 2007‒02‒10
twelve papers chosen by
Laszlo A. Koczy
University of Maastricht

  1. Evolution of Strategies in Repeated Games with Discounting By Matthijs van Veelen
  2. Evolutionarily Stable Strategies of Random Games, and the Vertices of Random Polygons By Sergiu Hart; Yosef Rinott; Benjamin Weiss
  3. Guessing Games and People Behaviours: What Can we Learn? By Andrea Morone; Piergiuseppe Morone
  4. Intentions, Trust and Frames: A note on Sociality and the Theory of Games By Vittorio Pelligra
  5. Dynamic Auctions: Uniqueness and Robustness to Private Information By Dirk Bergemann; Stephen Morris
  6. On the Value of Participation: Endogenous Emergence of Social Norms in a Three-Player Ultimatum Game By Grimalda, Gianluca; Kar, Anirban; Proto, Eugenio
  7. Random matching in adaptive dynamics By Glenn Ellison; Drew Fudenberg; Lorens A. Imhof
  8. Look-ups as the Windows of the Strategic Soul: Studying Cognition via Information Search in Game Experiments By Vincent P. Crawford
  9. Social identity and trust - An experimental investigation By Werner Güth; M. Vittoria Levati; Matteo Ploner
  10. Bayesian Decision Theory and the Representation of Beliefs By Edi Karni
  11. Lignite price negotiation between opencast mine and power plant as a two-stage, two-person, cooperative, non-zero sum game By Jurdziak, Leszek
  12. "Social Norms an Voluntary Cooperations"(in Japanese) By Masahiro Okuno-Fujiwara; Takako Fujiwara-Greve; Nobue Suzuki

  1. By: Matthijs van Veelen (Universiteit van Amsterdam)
    Keywords: Repeated games; evolutionary stability; robust against indirect invasions.
    JEL: C73
    Date: 2007–01–04
  2. By: Sergiu Hart; Yosef Rinott; Benjamin Weiss
    Date: 2007–01–26
  3. By: Andrea Morone (University of Bari.); Piergiuseppe Morone (University of Foggia.)
    Abstract: In this paper we address the topic of guessing games. By developing a generalised theory of naïveté, we show how Güth et al..s result (i.e. convergence toward interior equilibria is faster than convergence toward boundary equilibria) is compatible with Nagel.s theory of boundedly rational behaviour. However, we also show how, under new model parameterisation, neither Güth et al..s story of convergence towards interior equilibria, nor Nagel.s theory of boundedly rational behaviour are verified. We conclude that the results of Nagel (1995) and Güth et al. (2002), however interesting, are severely affected by the ad hoc parameterisation chosen for the game.
    Keywords: Guessing game, p-beauty contest, individual behaviour.
    JEL: C72 C91
    Date: 2007–02
  4. By: Vittorio Pelligra
    Abstract: Psychological Game Theory (PGT) extends classical game theory allowing for the formal analysis of belief-dependent sentiments and emotions such as resentment, pride, shame, gratefulness, and the like. PGT incorporates these factors by relating agents' subjective expected utility to players' strategies, to their beliefs about others' strategies, but also to their beliefs about others' beliefs about their strategies, and so on. This paper argues that, thanks to the epistemic consequences of this hierarchy of beliefs, PGT is well-endowed to address, and to some extent solve three of the most challenging problems recently emerged in classical game theory, namely, the problem of intentions, that of trust and that of decision frames.
    Keywords: Psychological games, intentions, trust, decision frames.
    JEL: C72 C79 C9
    Date: 2007
  5. By: Dirk Bergemann; Stephen Morris
    Date: 2007–01–26
  6. By: Grimalda, Gianluca; Kar, Anirban; Proto, Eugenio
    Abstract: We report results from two different settings of a 3-player ultimatum game. Under the monocratic rule, a player is randomly selected to make an offer to two receivers. Under the democratic rule, all three players make a proposal, and one proposal is then extracted. A majority vote is required to implement the proposal. Although the two rules are strategically equivalent, different patterns of behaviour seem to emerge as the number of interactions increase. Under the monocratic rule proposers seem to be entitled to claim a larger share of the pie, and receivers more likely to accept, in comparison with the democratic rule. We speculate that ‘institutions’ allowing more participation in the process of collective choice lead to more ‘socially responsible’ behaviour in the players.
    Keywords: Majority ultimatum; participation; institutions; social norms
    JEL: D72 C92 C78
    Date: 2006–12–27
  7. By: Glenn Ellison; Drew Fudenberg; Lorens A. Imhof
    Date: 2007–01–26
  8. By: Vincent P. Crawford
    Date: 2007–01–26
  9. By: Werner Güth; M. Vittoria Levati; Matteo Ploner
    Abstract: We experimentally examine how group identity affects trust behavior in an investment game. In one treatment, group identity is induced purely by minimal groups. In other treatments, group members are additionally related by outcome interdependence established in a prior public goods game. Moving from the standard investment game (where no group identity is prompted) to minimal group identity to two-dimensional group identity, we find no significant differences in trust decisions. However, trust is significantly and positively correlated with contribution decisions, suggesting that "social" trust is behaviorally important.
    Keywords: Experiment; Investment game; Trust; Group identity
    JEL: C72 C92
    Date: 2007–01
  10. By: Edi Karni
    Date: 2007–01–26
  11. By: Jurdziak, Leszek
    Abstract: Based on the simple model of the deposit the methodology of finding the optimal solution for bilateral monopoly (BM) of lignite mine and power plant is shown taking into account pit optimisation. It is proposed to treat lignite price negotiation as a kind of game. In the first stage (cooperative) both sides should select the ultimate pit maximising joint profits of BM and in the second one (competitive) the agreement should be achieved regarding profit division. This can be realised through side payments or by establishing the lignite transfer price. Lack of cooperation and opportunism can lead to the suboptimal solution – excavation of the smaller pit. Due to information asymmetry realisation of the optimal solution is more probably in vertically integrated firms. Dynamic adjustments of LOM BM plan to short-term changes of energy market using optimisation, BM model, game theory and their valuation as real options is the new direction of further re-search.
    Keywords: bilateral monopoly; co-operative game; price negotiation; non-zero sum game; Pareto optimal solution; lignite price; power plant; lignite mine; pit optimisation; optimal ultimate pit; pit phases;
    JEL: L22 D82 D43 D86 C78 D24 L13 D74 L11 L14 Q31 L72 C71 L94
    Date: 2006–09–24
  12. By: Masahiro Okuno-Fujiwara (Faculty of Economics, University of Tokyo); Takako Fujiwara-Greve (Department of Economics, Keio University); Nobue Suzuki (Department of Economics, Komazawa University)
    Abstract: Unlike the ordinary repeated games, in the real world, people can run away after cheating. In this paper we construct a social game, in which players can repeat Prisoners' Dilemma only if both players agree to continue the partnership. We investigate how a social sanction prevents moral hazard in such a voluntary relationship. We have three conclusions. First, it is possible to enforce voluntary long-term cooperation by trust-building. Second, the trust-building periods can be shortened under diverse strategy distributions. Third, if there is a reference letter system which conveys information that a partnership ended by an unavoidable cause, then the trust-building periods can be shortened as well.
    Date: 2007–01

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