nep-gth New Economics Papers
on Game Theory
Issue of 2011‒04‒23
eleven papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Learning in networks: An experimental study using stationary concepts By Berninghaus, Siegfried K.; Neumann, Thomas; Vogt, Bodo
  2. The Impact of Managerial Flexibility on Negotiation Strategy and Bargaining Power By Elmar Lukas; Andreas Welling
  3. Finitely repeated games with social preferences By Oechssler, Jörg
  4. Tipping Climate Negotiations By Geoffrey Heal; Howard Kunreuther
  5. Social vs. risk preferences under the veil of ignorance By Nicola Frignani; Giovanni Ponti
  6. Lyapunov Stability in an Evolutionary Game Theory Model of the Labor Market By Araujo, Ricardo Azevedo
  7. Comment on Promises and Partnership By Cary Deck; Maroš Servátka; Steven Tucker
  8. Words Speak Louder Than Money By Maroš Servátka; Steven Tucker; Radovan Vadovič
  9. Verhaltensmodelle fur Softwareagenten im Public Goods Game By Müller, Marcus; Stern, Guillaume; Jacob, Ansger; Kirn, Stefan
  10. Voting Power in the EU Council of Ministers and Fair Decision Making in Distributive Politics By Michel Le Breton; Maria Montero; Vera Zaporozhets
  11. The network structure of mutual support links: Evidence from rural Tanzania By Margherita Comola

  1. By: Berninghaus, Siegfried K.; Neumann, Thomas; Vogt, Bodo
    Abstract: Our study analyzes theories of learning for strategic interactions in networks. Participants played two of the 2 x 2 games used by Selten and Chmura (2008) and in the comment by Brunner, Camerer and Goeree (2009). Every participant played against four neighbors and could choose a different strategy against each of them. The games were played in two network structures: a lattice and a circle. We compare our results with the predictions of different theories (Nash equilibrium, quantal response equilibrium, action-sampling equilibrium, payoff-sampling equilibrium, and impulse balance equilibrium) and the experimental results of Selten and Chmura (2008). One result is that the majority of players choose the same strategy against each neighbor. As another result we observe an order of predictive success for the stationary concepts that is different from the order shown by Selten and Chmura. This result supports our view that learning in networks is different from learning in random matching. --
    Keywords: experimental economics,networks,learning
    JEL: C70 C73 C91 D83 D85
    Date: 2011
  2. By: Elmar Lukas (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Andreas Welling (Economics Institute, Brandenburg University of Technology, Cottbus)
    Abstract: Using a dynamic real options approach we show that in a sequential bargaining framework managerial flexibility is strengthening the first-mover advantage by undermining the bargaining power of the second mover. Furthermore we compare the results of the sequential framework with the results of cooperative bargaining.
    Keywords: real option, game theory, sale, negotiation, flexibility, ultimatum game
    JEL: G3 D81
    Date: 2011–04
  3. By: Oechssler, Jörg
    Keywords: social preferences; finitely repeated games; inequity aversion; ERC
    JEL: C73 C72
    Date: 2011–04–11
  4. By: Geoffrey Heal; Howard Kunreuther
    Abstract: Thinking about tipping provides a novel perspective on finding a way forward in climate negotiations and suggests an alternative to the current framework of negotiating a global agreement on reductions in greenhouse gas emissions. Recent work on non-cooperative games shows games with increasing differences have multiple equilibria and have a “tipping set,” a subset of agents who by changing from the inefficient to the efficient equilibrium can induce all others to do the same. We argue that international climate negotiations may form such a game and so have a tipping set. This set is a small group of countries who by adopting climate control measures can make in the interests of all others to do likewise.
    JEL: C72 F53 Q56
    Date: 2011–04
  5. By: Nicola Frignani (Università di Ferrara); Giovanni Ponti (Universidad de Alicante)
    Abstract: This paper reports experimental evidence from a Dictator Game experiment in which subjects choose repeatedly one out of four options involving a pair of fixed monetary prizes, one for them, one for another anonymously matched subject. In some sessions, player position (i.e. the identity of the best paid agent, constant across all options) is known in advance before subjects have to make their decision; in other sessions subjects choose “under the veil of ignorance”, not knowing to which player position they will be eventually assigned. We also collect evidence from additional sessions in which the same options correspond to binary lotteries, in which subjects may win the high or the low prize, but their decisions do not affect other participants. We frame subjects’ decisions within the realm of a simple mean-variance utility maximization problem, where the parameter associated to the variance is interpreted, depending on the treatment conditions, as a measure of pure risk aversion, pure inequality aversion, or some combination of the two. We also condition our estimates to subjects’ individual socio-demographic characteristics.
    Keywords: Keywords: dictator games, social preferences, risk preferences, functional identification.
    JEL: D86
    Date: 2011–03
  6. By: Araujo, Ricardo Azevedo
    Abstract: In this paper the existence and stability of equilibria in an evolutionary game theory model of the labor market is studied by using the Lyapunov method. The model display multiple equilibria and it is shown that the Nash Equilibria of the static game are evolutionary stable equilibria in the game theory evolutionary set up. In this vein a complete characterization of the dynamics of an evolutionary model of the labor market is provided.
    Keywords: Evolutionary game theory approach; labour market; informal economy; Lyapunov function
    JEL: C73 J23
    Date: 2011–03
  7. By: Cary Deck; Maroš Servátka; Steven Tucker (University of Canterbury)
    Abstract: Charness and Dufwenberg (2006) find that promises increase cooperation and suggest that the behavior of subjects in their experiment is driven by guilt aversion. By modifying the procedures to include a double blind social distance protocol we test an alternative explanation that promise keeping was due to external influence and reputational concerns. Our data are statistically indistinguishable from those of Charness and Dufwenberg and therefore provide strong evidence that their observed effects regarding the impact of communication are due to internal factors and not due to an outside bystander.
    Keywords: Experiment; promises; partnership; guilt aversion; psychological game theory; trust; lies; social distance; behavioral economics; hidden action
    JEL: C70 C91
    Date: 2011–04–11
  8. By: Maroš Servátka; Steven Tucker; Radovan Vadovič (University of Canterbury)
    Abstract: Should one use words or money to foster trust of the other party if no means of enforcing trustworthiness are available? This paper reports an experiment studying the effectiveness of two types of mechanisms for promoting trust: a costly gift and a costless message as well as their mutual interaction. We nest our findings in the standard version of the investment game. Our data provide evidence that while both stand-alone mechanisms enhance trust, and a gift performs significantly worse than a message. Moreover, when a gift is combined with sending a message, it can be counterproductive
    Keywords: Communication; content analysis; experimental economics; gift giving; investment game; message; trust; trustworthiness
    JEL: C70 C91
    Date: 2011–04–12
  9. By: Müller, Marcus; Stern, Guillaume; Jacob, Ansger; Kirn, Stefan
    Abstract: Gegenstand der vorliegenden Arbeit ist das Verhaltensmodell von Softwareagenten in einem Public Goods Game. Agenten im Sinne der Arbeit besitzen jeweils eigene, individuelle Ziele und müssen sich im Hinblick auf ein übergeordnetes Gesamtziel im Multiagentensystem koordinieren. Dabei hängen die individuell und kollektiv erzielbaren Ergebnisse von der Wahl der Verhaltensmodelle der Agenten ab. Die Wahl eines rein eigennützigen Verhaltens kann zu Nutzeneinbußen führen; die Wahl eines selbstlosen Verhaltens kann die individuell erzielbaren Ergebnisse eines Agenten massiv beeinträchtigen, falls andere Agenten im System eigennützig spielen. Die Auswirkungen verschiedener, aus der sozio-ökonomischen Theorie entlehnter Verhaltensmodelle in unterschiedlich gestalteten Agenten-Gesellschaften wird mittels einer Simulation untersucht. Die vorliegende Arbeit soll somit einen Beitrag liefern, um auf Basis deskriptiver sozio-öokonomischer Verhaltensmodelle Aussagen über das Verhalten von Softwareagenten (präskriptive Modelle) zu erlauben. Die Erkenntnisse helfen Entwicklern von Multiagentensystemen bei der Implementierung eines problemadäquaten Agentenverhaltens. --
    Keywords: Agent,multi-agent technologies,Public Goods Game,Verhaltensmodelle
    Date: 2011
  10. By: Michel Le Breton; Maria Montero; Vera Zaporozhets
    Abstract: We analyze and evaluate the different decision rules describing the Council of Ministers of the EU starting from 1958 up to date. All the existing studies use the Banzhaf index (for binary voting) or the Shapley-Shubik index (for distributive politics). We argue that the nucleolus can be considered an appropriate power measure in distributive situations and an alternative to the Shapley-Shubik index. We then calculate the nucleolus and compare the results of our calculations with the conventional measures. In the second part, we analyze the power of the European citizens as measured by the nucleolus under the egalitarian criterion proposed by Felsenthal and Machover (1998), and characterize the first best situation. Based on these results we propose a methodology for the design of the optimal (fair) decision rules. We perform the optimization exercise for the earlier stages of the EU within a restricted domain of voting rules, and conclude that Germany should receive more than the other three large countries under the optimal voting rule.
    Date: 2011–03
  11. By: Margherita Comola (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: This paper takes a network perspective t oinvestigate how rural households in developing countries form the links through which they provide and get economic support. I test the hypothesis that indirect contacts (e.g. friends of friends) matter for link formation. An estimation procedure of a network formation model à la Jackson and Wolinsky (1996) is proposed and applied to data on a single village in Tanzania. Results show that when agents evaluate the net advantage of forming a link they also consider the wealth and the position of indirect contacts. The network externalities from indirect contacts are negative, which suggests a mechanism of competition over scarce resources. This paper proposes the first structural estimation of an endogenous network formation model, and also contributes to the development literature by overcoming the dyadic regression approach and providing evidence that village-level network structure has an explanatory value disregarded by all previous studies.
    Keywords: mutual support ; network formation ; structural estimation ; indirect contacts
    Date: 2010–06

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