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on Game Theory |
| By: | Eliaz, K.; Spiegler, R. |
| Abstract: | When two agents hold different priors over an unverifiable state of nature, which affects the outcome of a game they are about to play, they have an incentive to bet on the game's outcome. We pose the following question: what are the limits to the agents' ability to realize gains from such speculative bets when their priors are private information? We apply a “mechanism design” approach to this question. We characterize interim-efficient bets and discuss their implementability in terms of the underlying game's payoff structure. In particular, we show that as the costs of unilaterally manipulating the bet's outcome become more symmetric across states and agents, implementation becomes easier. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://eprints.ucl.ac.uk/17323/&r=gth |
| By: | Kukushkin, Nikolai S. |
| Abstract: | If the preferences of the players in a strategic game satisfy certain continuity conditions, then the acyclicity of individual improvements implies the existence of a Nash equilibrium. Moreover, starting from any strategy profile, an arbitrary neighborhood of the set of Nash equilibria can be reached after a finite number of individual improvements. |
| Keywords: | potential game; compact-continuous game; finite improvement property |
| JEL: | C72 |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20713&r=gth |
| By: | Kukushkin, Nikolai S. |
| Abstract: | We study what useful implications strategic complementarity or substitutability may have when the indifference relation(s) need not be transitive. Two results are obtained about the existence of a monotone selection from the best response correspondence when both strategies and parameters form chains. Two more results are obtained about the existence of a Nash equilibrium in games with strategic complementarities where strategy sets are chains, but monotone selections from the best response correspondences need not exist. |
| Keywords: | Strong acyclicity; interval order; single crossing; monotone selection; Nash equilibrium |
| JEL: | C72 |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20714&r=gth |
| By: | Fuhito Kojima (Stanford University); M. Utku Ünver (Boston College) |
| Abstract: | The Boston mechanism is a popular student placement mechanism in school choice programs around the world. We provide two characterizations of the Boston mechanisms. We introduce two new axioms, respect of preference rankings and rank-respecting Maskin monotonicity. A mechanism is the Boston mechanism for some priority if and only if it respects preference rankings and satisfies consistency, resource monotonicity, and rank-respecting Maskin monotonicity. In environments where each type of object has exactly one unit, as in house allocation, a characterization is given by respect of preference rankings, individual rationality, population monotonicity, and rank-respecting Maskin monotonicity. |
| Keywords: | Mechanism design, matching, school choice, market design, Boston mechanism |
| JEL: | C78 D78 |
| Date: | 2010–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:729&r=gth |
| By: | Arthur Charpentier (Departement des Sciences Economiques, Universite Rennes I,); Stephane Mussard (Lameta-Cnrs Université de Montpellier I. Address: Lameta-Cnrs, Université Montpellier I, GREDI-Universite de Sherbrooke) |
| Abstract: | The paper explores different applications of the Shapley value for either inequality or poverty measures. We first investigate the problem of source decomposition of inequality measures, the so-called additive income sources inequality games, baed on the Shapley Value, introduced by Chantreuil and Trannoy (1999) and Shorrocks (1999). We show that multiplicative income sources inequality games provide dual results compared with Chantreuil and Trannoy's ones. We also investigate the case of multiplicative poverty games for which indices are non additively decomposable in order to capture contributions of sub-indices, which are multiplicatively connected with, as in the Sen-Shorrocks-Thon poverty index. We finally show in the case of additive poverty indices that the Shapley value may be equivalent to traditional methods of decomposition such as subgroup consistency and additive decompositions. |
| Keywords: | Inequality, Poverty, Shapley, Source decomposition |
| JEL: | D31 D63 |
| Date: | 2010–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:10-03&r=gth |
| By: | Ryo Adachi; Akimichi Takemura |
| Abstract: | In this paper we propose an investing strategy based on neural network models combined with ideas from game-theoretic probability of Shafer and Vovk. Our proposed strategy uses parameter values of a neural network with the best performance until the previous round (trading day) for deciding the investment in the current round. We compare performance of our proposed strategy with various strategies including a strategy based on supervised neural network models and show that our procedure is competitive with other strategies. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1002.2265&r=gth |
| By: | James W. Bono; David H. Wolpert |
| Abstract: | We examine the potential for simple auction mechanisms to efficiently allocate arrival and departure slots during Ground Delay Programs (GDPs). The analysis is conducted using a new approach to predicting strategic behavior called Predictive Game Theory (PGT). The difference between PGT and the familiar Equilibrium Concept Approach (ECA) is that PGT models produce distribution-valued solut tion concepts rather than set-valued ones. The advantages of PGT over ECA in policy analysis and design are that PGT allows for decision-theoretic prediction and policy evaluation. Furthermore, PGT allows for a comprehensive account of risk, including two types of risk, systematic and modeling, that cannot be considered with the ECA. The results show that the second price auction dominates the first price auction in many decision-relevant categories, including higher expected efficiency, lower variance in efficiency, lower probability of significant efficiency loss and higher probability of significant efficiency gain. These findings are despite the fact that there is no a priori reason to expect the second price auction to be more efficient because none of the conventional reasons for preferring second price over first price auctions, i.e. dominant strategy implementability, apply to the GDP slot auction setting. |
| Keywords: | auction, ground delay program, entropy, predictive game theory, strategic risk |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2010-04&r=gth |
| By: | Heifetz, Aviad (Open University of Israel); Meier, Martin (Institut fur Hohere Studien, Vienna and IAE, Barcelona); Schipper, Burkhard C. (University of California, Davis) |
| Abstract: | We define a generalized state-space model with interactive unawareness and probabilistic beliefs. Such models are desirable for potential applications of asymmetric unawareness. We compare unawareness with probability zero belief. Applying our unawareness belief structures, we show that the common prior assumption is too weak to rule out speculative trade in all states. Yet, we prove a generalized "No-trade" theorem according to which there can not be common certainty of strict preference to trade. Moreover, we show a generalization of the "No-agreeing-to-disagree" theorem. |
| JEL: | C70 C72 D80 D82 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:09-20&r=gth |
| By: | Meier, Martin (Institut fur Hohere Studien, Vienna and Instituto de Analisis Economico, Barcelona); Schipper, Burkhard C. (University of California, Davis) |
| Abstract: | We generalize the "No-trade" theorem for finite unawareness belief structures in Heifetz, Meier, and Schipper (2009) to thinfinite case. |
| JEL: | C70 C72 D53 D80 D82 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:10-2&r=gth |