
on Game Theory 
By:  Grimm, Veronika; Mengel, Friederike (METEOR) 
Abstract:  We study experimentally how players learn to make decisions if they face many different (normalform) games. Games are generated randomly from a uniform distribution in each of 100 rounds. We find that agents do extrapolate between games but learn to play strategically equivalent games in the same way. If either there are few games or if explicit information about the opponent''s behavior is provided (or both) convergence to the unique Nash equilibrium generally occurs. Otherwise this is not the case and play converges to a distribution of actions which is NonNash. Action choices, though, that cannot be explained by theoretical models of either beliefbundling or action bundling are never observed. Estimating different learning models we find that Nash choices are best explained by finer categorizations than NonNash choices. Furthermore participants scoring better in the "Cognitive Reflection Test" choose Nash actions more often than other participants. 
Keywords:  microeconomics ; 
Date:  2009 
URL:  http://d.repec.org/n?u=RePEc:dgr:umamet:2009007&r=gth 
By:  Atila Abdulkadiroglu; Parag A. Pathak; Alvin E. Roth 
Abstract:  The design of the New York City (NYC) High School match involved tradeoffs among efficiency, stability and strategyproofness that raise new theoretical questions. We analyze a model with indifferencestiesin school preferences. Simulations with field data and the theory favor breaking indifferences the same way at every school single tie breaking in a studentproposing deferred acceptance mechanism. Any inefficiency associated with a realized tie breaking cannot be removed without harming student incentives. Finally, we empirically document the extent of potential efficiency loss associated with strategyproofness and stability, and direct attention to some open questions. 
JEL:  C78 D60 I20 
Date:  2009–04 
URL:  http://d.repec.org/n?u=RePEc:nbr:nberwo:14864&r=gth 
By:  Edgar Sanchez Carrera 
Abstract:  We study an evolutionary game in which the individual behavior of the economic agents can lead the economy either into a lowlevel or a highlevel equilibrium. The model represents two asymmetric populations, “leaders and followers”, where in each round an economic agent of population 1 is paired with a member of population 2. Our evolutionary game is a signaling game in which only the leader has private information. The leader moves first; the follower observes the leader's action, but not the leader's type, before choosing her own action. We found the equilibria both as selfconfirming and evolutionarily stable strategies. Furthermore, considering an imitative behavior of the followers, we show that to overcome the poverty trap there exists a threshold value equals to the ratio "education costsefficiency wages" of the number of highprofile economic agents 
Keywords:  Evolutionary games, imitation rule, poverty traps, replicator dynamics, signaling games, strategic complementarities 
JEL:  C70 C72 C73 I30 O10 O40 
Date:  2009–02 
URL:  http://d.repec.org/n?u=RePEc:usi:wpaper:555&r=gth 
By:  Anders U. Poulsen (School of Economics, University of East Anglia); Michael V. M. Roos (Fakultät für Wirtschaftswissenschaft, RuhrUniversität Bochum) 
Abstract:  The strategic commitment moves that game theory predicts players make may sometimes seem counterintuitive. We therefore conducted an experiment to see if people make the predicted strategic move. The experiment uses a simple bargaining situation. A player can make a strategic move of committing to not seeing what another player will demand. Our data show that subjects do, but only after substantial time, learn to make the predicted strategic move. We find only weak evidence of physical timing effects. 
Keywords:  strategic moves; commitment; bargaining; strategic value of information; physical timing effects; endogenous timing; experiment 
JEL:  C72 C78 C90 C92 D63 D80 
Date:  2009–02 
URL:  http://d.repec.org/n?u=RePEc:kud:kuiedp:0906&r=gth 
By:  Tomoki Inoue (Institute of Mathematical Economics, Bielefeld University) 
Abstract:  We consider an exchange economy where every commodity can be consumed only in integer amounts. Inoue [Inoue, T., 2005. Do pure indivisibilities prevent core equivalence? Core equivalence theorem in an atomless economy with purely indivisible commodities only. Journal of Mathematical Economics 41, 571601] proved that in such an economy with a continuum of agents, the core coincides with the set of Walras allocations. We show that this equivalence holds only in an atomless economy by giving two examples of the sequence of replica economies such that in any replica economy, there exists a core allocation that is not a Walras allocation. 
Keywords:  indivisible commodities, core, Walras equilibrium, strong core, costminimized Walras equilibrium 
JEL:  C71 D51 
Date:  2009–03 
URL:  http://d.repec.org/n?u=RePEc:bie:wpaper:419&r=gth 
By:  Kukushkin, Nikolai S. 
Abstract:  For a correspondence from a partially ordered set to a lattice, three sets of sufficient conditions for the existence of a monotone selection are obtained. (1) The correspondence is weakly ascending while each value is chaincomplete. (2) The correspondence is ascending while the target is a sublattice of the Cartesian product of a finite number of chains. (3) Both source and target are chains while the correspondence is generated by the maximization of a strongly acyclic interval order with the single crossing property. The theorems give new sufficient conditions for the existence of (epsilon) Nash equilibria. 
Keywords:  Monotone selection; (weakly) ascending correspondence; interval order; single crossing; (epsilon) Nash equilibrium 
JEL:  C72 
Date:  2009–04–03 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:14451&r=gth 
By:  Coralio Ballester (Universidad de Alicante); Antoni CalvóArmengol (ICREA,Universitat Autònoma de Barcelona); Yves Zenou (Stockholm University, Research Institute of Industrial Economics (IFN) and CREAM) 
Abstract:  Delinquents are embedded in a network of relationships. Social ties among delinquents are modeled by means of a graph where delinquents compete for a booty and benefit from local interactions with their neighbors. Each delinquent decides in a noncooperative way how much delinquency effort he will exert. Using the network model developed by Ballester et al. (2006), we characterize the Nash equilibrium and derive an optimal enforcement policy, called the keyplayer policy, which targets the delinquent who, once removed, leads to the highest aggregate delinquency reduction. We then extend our characterization of optimal single player network removal for delinquency reduction, the key player, to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The keyplayer policy turns out to be much more complex since it depends on wages and on the structure of the network. 
Date:  2008–04 
URL:  http://d.repec.org/n?u=RePEc:crm:wpaper:200912&r=gth 
By:  Tomoki Inoue (Institute of Mathematical Economics, Bielefeld University) 
Abstract:  We consider a pure exchange economy with finitely many indivisible commodities that are available only in integer quantities. We prove that in such an economy with a sufficiently large number of agents, but finitely many agents, the strong core coincides with the set of costminimized Walras allocations. Because of the indivisibility, the preference maximization does not imply the cost minimization. A costminimized Walras equilibrium is a state where, under some price vector, all agents satisfy both the preference maximization and the cost minimization. 
Keywords:  Indivisible commodities, strong core, costminimized Walras equilibrium, core equivalence 
JEL:  C71 D51 
Date:  2009–03 
URL:  http://d.repec.org/n?u=RePEc:bie:wpaper:417&r=gth 
By:  Tomoki Inoue (Institute of Mathematical Economics, Bielefeld University) 
Abstract:  We consider an atomless exchange economy with indivisible commodities. Every commodity can be consumed only in integer amounts. In such an economy, because of the indivisibility, the preference maximization does not imply the cost minimization. We prove that the strong core coincides with the set of costminimized Walras allocations which satisfy both the preference maximization and the cost minimization under the same price vector. 
Keywords:  indivisible commodities, core equivalence, strong core, costminimized Walras equilibrium 
JEL:  C71 D51 
Date:  2009–03 
URL:  http://d.repec.org/n?u=RePEc:bie:wpaper:418&r=gth 
By:  Daniela Del Boca; Christopher Flinn 
Abstract:  There is a long history of the theoretical and empirical investigation of the labor supply decisions of married women. Perhaps the starting point for modern econometric analysis of this question is Heckman (1974), in which a neoclassical model of wives’ labor supply was estimated using disaggregated data. He explicitly estimated the parameters characterizing a household utility function, which included as arguments the leisure levels of wives and household consumption. With the addition of a wage function, Heckman was able to consistently estimate household preference parameters and the wage function in a manner that eliminated the types of endogenous sampling problems known to create estimator bias when the participation decision is ignored.... 
Keywords:  Household Time Allocation, Grim Trigger Strategy, Household Production, Method of Simulated Moments 
JEL:  C79 D19 J22 
Date:  2009–02 
URL:  http://d.repec.org/n?u=RePEc:wpc:wplist:wp08_09&r=gth 