nep-gth New Economics Papers
on Game Theory
Issue of 2008‒10‒13
ten papers chosen by
Laszlo A. Koczy
Budapest Tech and Maastricht University

  1. Evolution of Coalition Structures under Uncertainty By De Marco, Giuseppe; Romaniello, Maria
  2. Axiomatic Models of Bargaining By Alvin E Roth
  3. Axiomatic Theory of Equilibrium Selection in Signalling Games with Generic Payoffs By Srihari Govindan; Robert Wilson
  4. Threats and demonstrations of power: experimental results on bilateral bargaining By Noemí Navarro; Róbert Veszteg
  5. Ergodic Equilibria in Stochastic Sequential Gamse By Jeremy H. Large; Tom Norman
  6. International Environmental Agreement: a Dynamic Model of Emissions Reduction By Marta Biancardi; Andrea Di Liddo
  7. Individual behavior and group membership: Comment By Matthias Sutter
  8. Strategic Voting in Sequential Committees By Matias Iaryczower
  9. "Auction Price Formation with Costly Occupants: Evidence Using Data from the Osaka District Court" By Takako Idee; Shinichiro Iwata; Teruyuki Taguchi
  10. Identification in First-Price and Dutch Auctions when the Number of Potential Bidders is Unobservable By Shneyerov, Art; Wong, Adam Chi Leung

  1. By: De Marco, Giuseppe; Romaniello, Maria
    Abstract: In Hart and Kurz (1983), stability and formation of coalition structures has been investigated in a noncooperative framework in which the strategy of each player is the coalition he wishes to join. However, given a strategy profile, the coalition structure formed is not unequivocally determined. In order to solve this problem, they proposed two rules of coalition structure formation: the $\gamma$ and the $\delta$ models. \par In this paper we look at the evolutionary games arising from the $\gamma$ and $\delta$ models in which players determine at every instant their strategies and, in particular, we study how the coalition structure evolve according to the strategic choices. For this purpose we consider mixed strategies and, firstly, we notice that natural generalizations of the $\gamma$ and $\delta$ models to this case lead to multiplicity of beliefs (on the set of coalition structures) coherent with the probability assignments given by the strategy profile. Coherency is regarded as a viability constraint for the differential inclusions describing the evolutionary games. Therefore, we investigate viability properties of the constraints and characterize velocities of pairs belief/strategies which guarantee that coherency of beliefs is always satisfied. Finally, among many coherent belief revisions (evolutions), we investigate those characterized by minimal change and provide existence results.
    Keywords: Coalition formation; coherent beliefs; differential inclusions; viability theory; minimal change belief revision
    JEL: D71 C71 D83 C72 C73
    Date: 2008–03–26
  2. By: Alvin E Roth
    Date: 2008–10–04
  3. By: Srihari Govindan; Robert Wilson
    Date: 2008–10–05
  4. By: Noemí Navarro (Department of Economic Theory, Universidad de Málaga); Róbert Veszteg (Institute of Social and Economic Research, Osaka University)
    Abstract: We test the empirical effectiveness of threats in equilibrating bargaining power in simple bilateral bargaining games. Our experimental design is based on the two-player versions of the multibidding game (Pérez-Castrillo and Wettstein, 2001) and the bid-and-propose game (Navarro and Perea, 2005) that build on the ultimatum game and balance parties' bargaining power by auctioning the role of the proposer in the first stage. We show that, while both mechanisms implement the fair split in their subgame-perfect Nash-equilibrium, they induce different results in the laboratory. Subjects do not react to threats that lie off the the equilibrium path in the expected way, even if these threats are theoretically credible as they belong to the subgame-perfect Nash equilibrium. In particular, it seems that subjects feel the need to show their bargaining power as if punishment that never happens could not constitute a credible threat.
    Keywords: bargaining, experiments, fairness, Myerson value, ultimatum game
    JEL: C72 C91 D63
    Date: 2008–10
  5. By: Jeremy H. Large; Tom Norman
    Abstract: Many dynamic economic situations, including certain markets, can be fruitfully modeled as binary-action stochastic sequential games. Such games have a state variable, which in the case of a market might be the inventory of the good waiting for sale. Conditional on the state, players choose in sequence whether to subtract from it (buy) or add to it (sell). Under two assmptions - called Self-Regulation and Separable Preferences - we can derive the existence of a stationary, sequential equilibrium where the state is geometrically ergodic and stationary, and the two actions are played in the ratio required to avoid drift. We solve for the equilibrium strategies of a particular class of uninformed player. In equilibrium, players must solve a potentially complicated forecasting problem, but our analysis used stationarity to bypass the details of this problem, thus avoiding the (often intractable) dynamic programming usually required to solve stochastic games. This simplification allows us to develop powerful invariance and welfare results, and to provide a microfoundation for market-clearing price adjustment.
    Keywords: Stochastic Games, Sequential Games, Ergodicity, Market Games
    JEL: D73 D41
    Date: 2008
  6. By: Marta Biancardi; Andrea Di Liddo
    Abstract: We model an International Environmental Agreement as a two stages game: during the first stage each country decides whether or not to join the agreement while, in the second stage, the quantity of emissions reduction is choosen. Players determine their abatement levels in a dynamic setting, given the dynamics of pollution stock and the strategies of other countries. Players may act cooperatively, building coalitions and acting according to the interest of the coalition, or they make their choices taking care of their individual interest only. Countries can behave myopically or in a farsighted way. As a consequence, the size of stable coalition can completely change. A continuous time framework is choosen in the present paper and consequently the problem is studied by a differential game.
    Keywords: IEA, Differential games, Coalition stability.
    Date: 2008–09
  7. By: Matthias Sutter (Department of Public Finance, University of Innsbruck, and Department of Economics, University of Gothenburg.)
    Abstract: Charness et al. (2007) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment I show that their findings also apply to non-strategic decisions, even when no outgroup exists, and I relate the effects of group membership on individual decisions to joint decision making in teams. I find in an investment experiment that individual decisions with salient group membership are largely the same as team decisions. This finding bridges the literature on team decision making and on group membership effects.
    Keywords: Individual behavior, group membership, team decision-making, experiment
    JEL: C91 C92 D71
    Date: 2008–10–07
  8. By: Matias Iaryczower
    Date: 2008–10–05
  9. By: Takako Idee (Faculty of Economics, Seikei University); Shinichiro Iwata (Faculty of Economics, University of Toyama); Teruyuki Taguchi (National Federation of Credit Guarantee Corporations)
    Abstract: Foreclosure properties sold at Japanese judicial auctions are delivered to buyers with an unclear title when occupants exist, because the foreclosure laws protect occupants from compulsory execution of auctions. The existence of occupants theoretically affects the auction price through two channels. First, it affects the reserve price, and this changes in auction price. Second, the number of bidders changes in response to changes in the reserve price that is controlled by occupants, and this changes the auction price. Using data from the Osaka District Court, we empirically find that the existence of occupants in properties reduces the auction price through two channels.
    Date: 2008–09
  10. By: Shneyerov, Art; Wong, Adam Chi Leung
    Abstract: Within the IPV paradigm, we show nonparametric identification of model primitives for first-price and Dutch auctions with a binding reserve price and auction-specific, unobservable sets of potential bidders.
    Keywords: auctions, identification
    Date: 2008–10–01

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