nep-gth New Economics Papers
on Game Theory
Issue of 2007‒10‒06
eight papers chosen by
Laszlo A. Koczy
University of Maastricht

  1. Games of Social Influence By Andrea Galeotti; Sanjeev Goyal
  2. Response Time under Monetary Incentives: the Ultimatum Game By Pablo Branas-Garza; Ana Leon-Mejia; Luis M. Miller
  3. Comment: Identification of a Simple Dynamic Discrete Game under Rationalizability By Victor Aguirregabiria
  4. The Devil is in the Details - Sex Differences in Simple Bargaining Games By Ana Leon-Mejia; Luis M. Miller
  5. A Characterization of Strategy-Proof Rules over the Condorcet Domain with an Even Number of Individuals By Lauren N. Merrill
  6. Matching and Sorting when Like Attracts Like By Simon Clark
  7. The Impact of the Accession of the Western Balkan Countries on Voting and Coalition Formation within the European Council of Ministers By Eleni Mylona
  8. Lower bounds and recursive methods for the problem of adjudicating conflicting claims. By Diego Dominguez

  1. By: Andrea Galeotti; Sanjeev Goyal
    Abstract: This paper considers a game played among players who seek to extract payoffs from a group of individuals subject to local interaction effects. We are interested in the relation between the network of social interaction and equilibrium actions and payoffs. We start with an analysis of two economic examples – strategic advertising in the presence of word of mouth advertising and social non-competitive marketing – to bring out the simple point that changing network connections can increase as well as decrease equilibrium actions and payoffs. This leads to an investigation of general conditions on payoffs under which equilibrium actions and payoffs increase/decrease with an increase in density of connections. We also develop conditions under which a greater dispersion in network connections leads unambiguously to positive and negative effects on actions as well as payoffs.
    Date: 2007–09–25
  2. By: Pablo Branas-Garza (Departamento de Teoria Economica, Universidad de Granada); Ana Leon-Mejia (IESA-CSIC); Luis M. Miller (IESA-CSIC and Max Planck Institute of Economics,)
    Abstract: This paper studies the response times of experimental subjects playing the Ultimatum game in a laboratory setting using monetary incentives. We find that proposals are not significantly correlated with response time, whereas responders' behavior is positively and significantly correlated. Hence, consistent with Rubisntein (forthcoming) we find that response times may capture relevant cognitive processes. However, the use of monetary incentives causes a reversal of his findings. These results have implications for the information about cognitive mechanisms that can be obtained from response times.
    Keywords: Monetary incentives, Ultimatum game, response time
    JEL: C72 C91
    Date: 2007–09–25
  3. By: Victor Aguirregabiria
    Abstract: This paper studies the identification power of rationalizability in a simple dynamic discrete game model. The paper extends to dynamic games some of the results in Aradillas-Lopez and Tamer (2007). The most commonly used equilibrium concept in empirical applications of dynamic games is Markov Perfect Equilibrium (MPE). I study the identification of structural parameters when we replace the MPE assumption with weaker conditions such as rational behavior or rationalizability. I present identification results for a simple dynamic game of market entry-exit with two players. Under the assumption of level-2 rationalizability (i.e., players are rational and they know that they are rational), exclusion restrictions and large-support conditions on the exogenous explanatory variables are sufficient for point-identification of all the structural parameters. Though the model is fully parametric, the key identifying assumptions are nonparametric in nature and it seems that these identification results might be extended to a semiparametric version of the model.
    Keywords: Identification, Empirical dynamic discrete games, Rational behavior, Rationalizability.
    JEL: C50 C51
    Date: 2007–09–25
  4. By: Ana Leon-Mejia (IESA-CSIC); Luis M. Miller (IESA-CSIC and Max Planck Institute of Economics)
    Abstract: The study of gender differences in social preferences has shown mixed results, preventing economists and other social scientists from drawing definitive conclusions on this topic. Several original investigations and experimental reviews have hypothesized that the main reason of this heterogeneity of results is the myriad of experimental designs used to study gender differences. In this paper we test this hypothesis by making male and female participants to face two different but related experimental games and two different information treatments. Through this 2x2 factorial design, we obtain results in line with some recent papers: women are sensitive to the design and context of the experiment in ways that men are not. In addition, we go further providing a well-grounded account on the importance of the context for female decision-making.
    Keywords: Beliefs, economic experiments, empathy, gender differences, social preferences.
    JEL: C78 C91
    Date: 2007–09–25
  5. By: Lauren N. Merrill (Department of Economics, College of William and Mary)
    Abstract: For an odd number of individuals Campbell and Kelly [2] show that over the set of profiles that admit a strong Condorcet winner, majority rule is the only non-dictatorial strategy-proof social choice function. This paper shows that the situation is quite different in the case of an even number of individuals, and provides a characterization of strategy-proof social choice rules in this case.
    Keywords: majority rule, Condorcet domain, dicatorial rule, stratefy-proof
    JEL: D70 D71
    Date: 2007–10–03
  6. By: Simon Clark
    Abstract: This paper examines a class of two-sided matching problems with non-transferable utility. Agents are horizontally differentiated, and each would prefer to be matched to a similar partner, i.e. "like attracts like". such preferences imply a unique equilibrium assignment describing the pattern of matching; however, the pattern of assortment in equilibrium is found to depend critically on the distribution of types among the two sexes. Classification-JEL: C7
    Keywords: Matching, sorting, uniqueness, horizontal heterogeneity, marriage.
  7. By: Eleni Mylona
    Abstract: This paper looks into the impact the accession of the Western Balkan countries of Albania, Serbia, Montenegro, Croatia, Bosnia and Herzegovina, and FYROM would have on voting power in the EU Council. Particular attention is paid to the implications of a priori coalitions between member states. The Shapley-Shubik power index is used to estimate voting power and two scenarios are considered: accession under the Nice Treaty and the Reform Treaty rules. If the Western Balkans accede under the Nice Treaty rules then the efficiency and workability of the EU would deteriorate, although the “paradox of new members” might occur where the power of some existing members is increased. Conversely if the accession took place under the Reform Treaty rules then there would be little impact on the ability of the EU to act. The inefficiency of a priori coalition formation between countries of dissimilar size is revealed, as well as the likely occurrence of the “paradox of size” where some countries are made worse off through cooperation. The enlargement will not affect this.
    Date: 2007–10
  8. By: Diego Dominguez (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))
    Abstract: For the problem of adjudicating conflicting claims, we study lower bounds on the awards of each agent. We propose extending a lower bound by performing the following operation: (i) for each problem, assign the lower bound and revise the problem accordingly; (ii) assign the bound of the revised problem. The “recursive-extension” of a bound is the lower bound obtained by recursive application of this operation. We provide necessary and sufficient conditions on a lower bound for there to be a unique rule satisfying its recursive-extension. We show that, under these conditions, the rule satisfying the recursive-extension of a bound is the unique rule satisfying the following property: the awards assigned by a rule should be obtainable in two ways: (i) directly applying the rule to the problem or (ii) first assigning the bound and revising the problem accordingly, and then applying the rule to the revised problem. Then, we study whether this procedure leads to well-behaved lower bounds.
    Keywords: Claims problems, Lower bounds, Recursive methods.
    JEL: C79 D63 D74
    Date: 2007–09

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