nep-gth New Economics Papers
on Game Theory
Issue of 2008‒10‒21
ten papers chosen by
Laszlo A. Koczy
Budapest Tech and Maastricht University

  1. Computational Complexity in Additive Hedonic Games By Sung, Shao-Chin; Dimitrov, Dinko
  2. Cooperative Games in Strategic Form By Sergiu Hart; Andreu Mas-Colell
  3. Satisficing in strategic environments: a theoretical approach and experimental evidence By Werner Güth; M. Vittoria Levati; Matteo Ploner
  4. Network Structure and Strategic Investments: An Experimental Analysis By Stephanie Rosenkranz; Utz Weitzel
  5. Adjusting Prices in the Many-to-many Assignment Game By Marilda Sotomayor
  6. Compliance by Believing: An Experimental Exploration on Social Norms and Impartial Agreements By Marco Faillo; Stefania Ottone; Lorenzo Sacconi
  7. Who's Who in Networks. Wanted: the Key Group By Umed Temurshoev; ;
  8. One person, Many Votes: Divided Majority and Information Aggregation By Laurent Bouton; Micael Castanheira
  9. Efficiency Gains from Team-Based Coordination: Large-Scale Experimental Evidence By Feri, Francesco; Irlenbusch, Bernd; Sutter, Matthias
  10. The Incentives to Cooperate in Local Public Goods Supply: A Repeated Game with Imperfect Monitoring By CHEIKBOSSIAN, Guillaume; SAND-ZANTMAN, Wilfried

  1. By: Sung, Shao-Chin; Dimitrov, Dinko
    Abstract: We investigate the computational complexity of several decision problems in hedonic coalition formation games and demonstrate that attaining stability in such games remains NP-hard even when they are additive. Precisely, we prove that when either core stability or strict core stability is under consideration, the existence problem of a stable coalition structure is NP-hard in the strong sense. Furthermore, the corresponding decision problems with respect to the existence of a Nash stable coalition structure and of an individually stable coalition structure turn out to be NP-complete in the strong sense.
    Keywords: additive preferences; coalition formation; computational complexity; hedonic games; NP-hard; NP-complete
    JEL: C63 C70 C71
    Date: 2008–10–07
  2. By: Sergiu Hart; Andreu Mas-Colell
    Date: 2008–10–12
  3. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); Matteo Ploner (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany, and University of Trento, Italy)
    Abstract: The satisficing approach is generalized and applied to finite n-person games. Based on direct elicitation of aspirations, we formally define the concept of satisficing, which does not exclude (prior-free) optimality but includes it as a border case. We also review some experiments on strategic games illustrating and partly supporting our theoretical approach.
    Keywords: Strategic interaction, Satisficing behavior, Bounded rationality
    JEL: C72 C92 D01
    Date: 2008–10–16
  4. By: Stephanie Rosenkranz; Utz Weitzel
    Abstract: This paper analyzes the effects of network positions and individual risk attitudes on individuals' strategic decisions in an experiment where actions are strategic substitutes. The game theoretic basis for our experiment is the model of Bramoulle and Kranton (2007). In particular, we are interested in disentangling the influence of global, local and individual factors. We study subjects' strategic investment decisions in four basic network structures. As predicted, we find that global factors, such as the regularity of the network structure, influence behavior. However, we also find evidence that individual play in networks is to some extent boundedly rational, in the sense that coordination is influenced by local and individual factors, such as the number of (direct) neighbors, local clustering and individuals' risk attitudes.
    Keywords: networks, experiment, coordination, strategic substitutes, risk aversion
    JEL: C91 D00 D81 D85 C72 H41
    Date: 2008–05
  5. By: Marilda Sotomayor
    Abstract: Starting with an initial price vector, prices are adjusted in order to eliminate the demand excess and at the same time to keep the transfers to the sellers as low as possible. In each step of the auction, to which sellers should those transfers be made (minimal overdemanded sets) is the key definition in the description of the algorithm. Such approach was previously used by several authors. We introduce a novel distinction by considering multiple sellers owing multiple identical objects and multiple buyers with a quota greater than one consuming at most one unit of each seller’s good. This distinction induces a necessarily more complicated construction of the overdemanded sets than the constructions existing in the literature, even in the simplest case of additive utilities considered here. As the previous papers, our mechanism yields the minimum competitive equilibrium price vector. A procedure to find the maximum competitive equilibrium price vector is also provided.
    Keywords: matching; stable payoff; competitive equilibrium payoff; optimal stable payoff; lattice social costs; pure comparative vigilance; super-symmetric rule
    Date: 2008
  6. By: Marco Faillo (University of Trento - Faculty of Economics); Stefania Ottone (Università degli Studi di Milano-Bicocca); Lorenzo Sacconi (University of Trento - Faculty of Economics)
    Abstract: The main contribution of this paper is twofold. First of all, it focuses on the decisional process that leads to the creation of a social norm. Secondly, it analyses the mechanisms through which subjects conform their behaviour to the norm. In particular, our aim is to study the role and the nature of Normative and Empirical Expectations and their influence on people's decisions. The tool is the Exclusion Game, a sort of 'triple mini-dictator game'. It represents a situation where 3 subjects - players A - have to decide how to allocate a sum S among themselves and a fourth subject - player B - who has no decisional power. The experiment consists of three treatments. In the Baseline Treatment participants are randomly distributed in groups of four players and play the Exclusion Game. In the Agreement Treatment in each group participants are invited to vote for a specific non-binding allocation rule before playing the Exclusion Game. In the Outsider Treatment, after the voting procedure and before playing the Exclusion Game, a player A for each group (the outsider) is reassigned to a different group and instructed about the rule chosen by the new group. In all the treatments, at the end of the game and before players are informed about the decisions taken during the Exclusion Game by the other co-players, first order and second order expectations (both normative and empirical) are elicited through a brief questionnaire. The first result we obtained is that subjects' choices are in line with their empirical (not normative) expectations. The second result is that even a non-binding agreement induces convergence of empirical expectations - and, consequently, of choices. The third results is that expectation of conformity is higher in the partner protocol. This implies that a single outsider breaks the 'trust and cooperation' equilibrium.
    Keywords: fairness, social norms, beliefs, psychological games, experimental games
    JEL: C72 C91 A13
    Date: 2008–07
  7. By: Umed Temurshoev (Department of Economics and SOM Research School, University of Groningen); ;
    Abstract: Ballester, Calvo-Armengol, and Zenou (2006, Econometrica, 74/5, pp. 1403-17) show that in a network game with local payoff complementarities, together with global uniform payoff substitutability and own concavity effects, the intercentrality measure identifies the key player - a player who, once removed, leads to the optimal change in overall activity. In this paper we search for the key group in such network games, whose members are, in general, different from the players with the highest individual intercentralities. Thus the quest for a single target is generalized to a group selection problem targeting an arbitrary number of players, where the key group is identified by a group intercentrality measure. We show that the members of a key group are rather nonredundant actors, i.e., they are largely heterogenous in their patterns of ties to the third parties.
    Keywords: social networks, centrality measures, intercentrality measures, clusters, policies
    JEL: A14 C72 L14
    Date: 2008–09
  8. By: Laurent Bouton; Micael Castanheira
    Abstract: In elections, majority divisions pave the way to focal manipulations and coordination failures, which can lead to the victory of the wrong candidate. This paper shows how this flaw can be addressed if voter preferences over candidates are sensitive to information. We consider two potential sources of divisions: majority voters may have similar preferences but opposite information about the candidates, or opposite preferences. We show that when information is the source of majority divisions, Approval Voting features a unique equilibrium with full information and coordination equivalence. That is, it produces the same outcome as if both information and coordination problems could be resolved. Other electoral systems, such as Plurality and Two-Round elections, do not satisfy this equivalence. The second source of division is opposite preferences. Whenever the fraction of voters with such preferences is not too large, Approval Voting still satisfies full information and coordination equivalence.
    Keywords: Information Aggregation; Multicandidate Elections; Approval Voting; Poisson Games
    JEL: C72 D72 D81 D82
    Date: 2008
  9. By: Feri, Francesco (University of Innsbruck); Irlenbusch, Bernd (London School of Economics); Sutter, Matthias (University of Innsbruck)
    Abstract: The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision-making so far. In reality, however, teams often have to coordinate with other teams. We present an experiment with 825 participants, using six different coordination games, where either individuals or teams interact with each other. We find that teams coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model.
    Keywords: coordination games, individual decision-making, team decision-making, experience-weighted attraction learning, experiment
    JEL: C71 C91 C92
    Date: 2008–10
  10. By: CHEIKBOSSIAN, Guillaume; SAND-ZANTMAN, Wilfried
    JEL: H7 C73
    Date: 2008–07

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