nep-gth New Economics Papers
on Game Theory
Issue of 2010‒04‒04
seven papers chosen by
Laszlo A. Koczy
Obuda University

  1. Let me sleep on it: Delay reduces rejection rates in Ultimatum Games By Grimm Veronika; Mengel Friederike
  2. Choosing `Me' and `My Friends': Identity in a Non-Cooperative Network Formation Game with Cost Sharing By Dev, Pritha
  3. On Lie point symmetries in differential games By A. Palestini
  4. Constrained Interactions and Social Coordination By Mathias Staudigl; Simon Weidenholzer
  5. Market Structure and Matching with Contracts By Alexander Westkamp
  6. Identity and Fragmentation in Networks By Dev, Pritha
  7. Quantum mechanism helps agents combat Pareto-inefficient social choice rules By Wu, Haoyang

  1. By: Grimm Veronika; Mengel Friederike (METEOR)
    Abstract: We show that delaying acceptance decisions in the Ultimatum Game drastically increases acceptance rates of low offers. While in standard treatments without delay less than 20% of low offers are accepted, these numbers increase to around 65-75% as we delay the acceptance decisions by around 10 minutes. Our findings provide precise evidence for familiar notions such as ''sleeping on it'' and show that there may be a good reason why public administrations often communicate bad news on Friday afternoons. They shed new light on recent evidence in Neuroscience on brain activation after receiving bad news and raise questions about the extent to which decisions reveal the preferences of a decision-maker.
    Keywords: microeconomics ;
    Date: 2010
  2. By: Dev, Pritha
    Abstract: This paper introduces the choice of identity characteristics, and, commitments to these characteristics, in a network formation model where links costs are shared. Players want to link to the largest group given that linking costs are decreasing (increasing) in commitments for same (different) identity. We study conditions under which these choices allow for networks with multiple identities. We find that whether the choice of identity itself gives any utility or not, there will be Nash networks featuring multiple identities. Moreover, if the choice of identity directly adds utility, networks with multiple identities will be efficient and survive the dynamic process.
    Keywords: Identity; Network Formation; Cost Sharing Links
    JEL: Z13 D85 C72
    Date: 2010–03
  3. By: A. Palestini
    Abstract: A technique to determine closed-loop Nash equilibria of n-player differential games is developed when their dynamic state-control system is composed of decoupled ODEs. In particular, the theory of Lie point symmetries is exploited to achieve first integrals of such systems.
    JEL: C72 C73
    Date: 2010–03
  4. By: Mathias Staudigl; Simon Weidenholzer
    Abstract: We consider a co-evolutionary model of social coordination and network formation whereagents may decide on an action in a 2 £ 2- coordination game and on whom to establish costly links to. We ¯nd that a payo® dominant convention is selected for a wider parameter range when agents may only support a limited number of links as compared to a scenario where agents are not constrained in their linking choice. The main reason behind this result is that constrained interactions create a tradeo® between the interactions an agent has and those he would rather have. Further, we discuss convex linking costs and provide su±cient conditions for the payo® dominant convention to be selected in m£m coordination games.
    JEL: C72 D83
    Date: 2010–03
  5. By: Alexander Westkamp
    Abstract: Ostrovsky [10] develops a theory of stability for a model of matching in exogenously given networks. For this model a generalization of pairwise stability, chain stability, can always be satisfied as long as agents’ preferences satisfy same side substitutability and cross side complementarity. Given this preference domain I analyze the interplay between properties of the network structure and (cooperative) solution concepts. The main structural condition is an acyclicity notion that rules out the implementation of trading cycles. It is shown that this condition and the restriction that no pair of agents can sign more than one contract with each other are jointly necessary and sufficient for (i) the equivalence of group and chain stability, (ii) the core stability of chain stable networks, (iii) the efficiency of chain stable networks, (iv) the existence of a group stable network, and (v) the existence of an efficient and individually stable network. These equivalences also provide a rationale for chain stability in the unrestricted model. The (more restrictive) conditions under which chain stability coincides with the core are also characterized.
    Keywords: Matching with Contracts, Network Structure, Chain Stability, Acyclicity, Group Stability, Core, Efficiency
    JEL: C71 C78 D85
    Date: 2010–02
  6. By: Dev, Pritha
    Abstract: This paper looks at the role of identity in the fragmentation of networks by incorporating the choice of commitment to identity characteristics, into a noncooperative network formation game. The Nash network will feature divisions based on identity, moreover, it will have layers of such divisions. Using the renement of strictness, I get stars of highly committed players linked together by less committed players. Next, I propose an empirical methodology to deduce which dimensions of identity cause the fragmentation of a given network. I propose a practical algorithm for the estimation and apply this to data from villages in Ghana.
    Keywords: Identity; Network formation; Community Structure
    JEL: C45 Z13 D85
    Date: 2010–03
  7. By: Wu, Haoyang
    Abstract: Quantum strategies have been successfully applied in game theory for years. However, as a reverse problem of game theory, the theory of mechanism design is ignored by physicists. In this paper, we generalize the classical theory of mechanism design to a quantum domain and obtain two results: 1) We find that the mechanism in the proof of Maskin's sufficiency theorem is built on the Prisoners' Dilemma. 2) By virtue of a quantum mechanism, agents who satisfy a certain condition can combat Pareto-inefficient social choice rules instead of being restricted by the traditional mechanism design theory.
    Keywords: Quantum games; Mechanism design; Implementation theory; Nash implementation; Maskin monotonicity
    JEL: D71 C72
    Date: 2010–02–18

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