nep-gth New Economics Papers
on Game Theory
Issue of 2008‒03‒01
five papers chosen by
Laszlo A. Koczy
University of Maastricht

  1. Rational Reasoning or Adaptive Behavior? Evidence from Two-Person Beauty Contest Games By Brit Grosskopf; Rosemarie Nagel
  2. The Influence of Secrecy on the Communication Structure of Covert Networks By Lindelauf, R.; Borm, P.E.M.; Hamers, H.J.M.
  3. Information Transmission and Core Convergence in Quasilinear Economies By Yusuke Kamishiro; Roberto Serrano
  4. Choosing and Sharing By Jérémy Laurent-Lucchetti; Justin Leroux
  5. Rationality and Personality in a Restaurant Entry Game: Is there an Entrepreneurial Personality Type? By Ted Bergstrom; Jon Sonstelie

  1. By: Brit Grosskopf; Rosemarie Nagel
    Abstract: Many experiments have shown that human subjects do not necessarily behave in line with game theoretic assumptions and solution concepts. The reasons for this non-conformity are multiple. In this paper we study the argument whether a deviation from game theory is because subjects are rational, but doubt that others are rational as well, compared to the argument that subjects, in general, are boundedly rational themselves. To distinguish these two hypotheses, we study behavior in repeated 2-person and many-person Beauty- Contest-Games which are strategically different from one another. We analyze four different treatments and observe that convergence toward equilibrium is driven by learning through the information about the other player’s choice and adaptation rather than self-initiated rational reasoning.
    Keywords: Beauty contest, Guessing game, Bounded rationality, Weak dominance, Learning
    JEL: C7 C9
    Date: 2007–06
  2. By: Lindelauf, R.; Borm, P.E.M.; Hamers, H.J.M. (Tilburg University, Center for Economic Research)
    Abstract: In order to be able to devise successful strategies for destabilizing terrorist organizations it is vital to recognize and understand their structural properties. This paper deals with the opti- mal communication structure of terrorist organizations when considering the tradeoff between secrecy and operational efficiency. We use elements from game theory and graph theory to determine the `optimal' communication structure a covert network should adopt. Every covert organization faces the constant dilemma of staying secret and ensuring the necessary coordina- tion between its members. For several different secrecy and information scenarios this dilemma is modeled as a game theoretic bargaining problem over the set of connected graphs of given order. Assuming uniform exposure probability of individuals in the network we show that the Nash bargaining solution corresponds to either a network with a central individual (the star graph) or an all-to-all network (the complete graph) depending on the link detection probabil- ity, which is the probability that communication between individuals will be detected. If the probability that an individual is exposed as member of the network depends on the information hierarchy determined by the structure of the graph, the Nash bargaining solution corresponds to cellular-like networks.
    Keywords: covert networks;terrorist networks;Nash bargaining;game theory;information;secrecy.
    JEL: C50 C78
    Date: 2008
  3. By: Yusuke Kamishiro; Roberto Serrano
    Abstract: We study core convergence in interim quasilinear economies with asymmetric information, concentrating on core notions in which information is transmitted endogenously within coalitions and the incentive constraints are relevant. Specifically, we shall focus on the credible core and randomized mediated core concepts. We consider independent replicas of the basic economy: independent copies of the economy in which each individual’s utility only depends on the information of the individuals who belong to the same copy. We provide an example in which core convergence does not obtain for the Dutta-Vohra credible core and for Myerson’s randomized mediated core. On the other hand, we establish a positive convergence result for a refinement of Myerson’s core for which information disseminates across coalitions within a given random blocking mechanism. Under some conditions, this core converges to the set of incentive compatible ex-post Walrasian allocations.
    Keywords: Core Convergence; Information Transmission; Coalitional Voting; Mechanisms; Mediation; Rational Expectations Equilibrium
    Date: 2008
  4. By: Jérémy Laurent-Lucchetti; Justin Leroux (IEA, HEC Montréal)
    Abstract: Choosing a project for which benefits accrue to all involved agents but brings major costs or additional benefits to only one agent is often problematic. Siting a nationwide nuclear waste disposal or hosting a major sporting event are examples of such a problem: costs or benefits are tied to the identity of the host of the project. Our goals are twofold: to choose the efficient site (the host with the lowest cost or the highest localized surplus) and to share the cost, or surplus, in a predetermined way so as to achieve redistributive goals. We propose a simple mechanism to implement both objectives. The unique subgame-perfect Nash equilibrium of our mechanism coincides with truthtelling, is efficient, budget-balanced and immune to coalitional deviations.
    Date: 2007–12
  5. By: Ted Bergstrom (University of California, Santa Barbara); Jon Sonstelie (University of California, Santa Barbara)
    Abstract: Students in a large principles class participated in a market experiment in which they had opportunities to take entrepreneurial action. These students had also taken the Meyers-Briggs personality test. We explore the relation between personality characteristics and participation decisions.
    Keywords: entrepreneurship, personality test,
    Date: 2006–08–01

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