nep-gth New Economics Papers
on Game Theory
Issue of 2011‒09‒05
six papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Political Motivations and Electoral Competition: Equilibrium Analysis and Experimental Evidence By Michalis Drouvelis; Alejandro Saporiti; Nicolaas J. Vriend
  2. Quasi-option Value under Strategic Interactions By Tomoki Fujii; Ryuichiro Ishikawa
  3. Payoff Uncertainty, Bargaining Power, and the Strategic Sequencing of Bilateral Negotiations By Silvana Krasteva; Huseyin Yildirim
  4. Big Experimenter Is Watching You! Anonymity and Prosocial Behavior in the Laboratory By Barmettler, Franziska; Fehr, Ernst; Zehnder, Christian
  5. Mechanism Design via Consensus Estimates, Cross Checking, and Profit Extraction By Bach Q. Ha; Jason D. Hartline
  6. The EU legislation game: the case of asylum law. By Jenny Monheim-Helstroffer; Marie Obidzinski

  1. By: Michalis Drouvelis (University of Birmingham); Alejandro Saporiti (University of Manchester); Nicolaas J. Vriend (Queen Mary, University of London)
    Abstract: We study both theoretically and experimentally the complete set of Nash equilibria of a classical one-dimensional, majority rule election game with two candidates, who might be interested in power as well as in ideology, but not necessarily in the same way. Apart from obtaining the well known median voter result and the two-sided policy differentiation outcome, the paper uncovers the existence of two new equilibrium configurations, called 'one-sided' and 'probabilistic' policy differentiation, respectively. Our analysis shows how these equilibrium configurations depend on the relative interests in power (resp., ideology) and the uncertainty about voters' preferences. The theoretical predictions are supported by the data collected from a series of laboratory experiments, as we observe convergence to the Nash equilibrium values at the aggregate as well as the individual levels in all treatments, and the comparative statics effects across treatments are as predicted by the theory.
    Keywords: Electoral competition, Power, Ideology, Uncertainty, Nash equilibrium, Experimental evidence
    JEL: C72 C90 D72
    Date: 2011–08
  2. By: Tomoki Fujii (School of Economics, Singapore Management University); Ryuichiro Ishikawa (Graduate School of Systems and Information Engineering, University of Tsukuba)
    Abstract: We consider a simple two-period model with irreversible investment with strategic interactions. In this setup, we try to extend the concept of the quasi-option value (QOV) by Arrow and Fisher (1974), Henry (1974), Fisher and Hanemann (1987) and Hanemann (1989) to a game-theoretic situation. In doing so, we demostrate some conceptual difficulties with the QOV, and stress the potential importance of information-induced inefficiency. We also show that this inefficiency can be remedied by incorporating sophisticated control of information flow. Our model is potentially applicable to various global environmental problems.
    Keywords: Biodiversity, Irreversibility, Quasi-option value, Uncertainty, Value of Information
    JEL: C72 H43 Q50
    Date: 2011–03
  3. By: Silvana Krasteva; Huseyin Yildirim
    Date: 2011–08–25
  4. By: Barmettler, Franziska (Foundation for Global Sustainability); Fehr, Ernst (University of Zurich); Zehnder, Christian (University of Lausanne)
    Abstract: Social preference research has received considerable attention in recent years. Researchers have demonstrated that the presence of people with social preferences has important implications in many economic domains. However, it is important to be aware of the fact that the empirical basis of this literature relies to a large extent on experiments that do not provide anonymity between experimenter and subject. It has been argued that this lack of experimenter-subject anonymity may create selfish incentives to engage in seemingly other-regarding behavior. If this were the case these experiments would overestimate the importance of social preferences. Previous studies provide mixed results and methodological differences within and across studies make it difficult to isolate the impact of experimenter-subject anonymity on prosocial behavior. In this paper we use a novel procedure that allows us to examine the impact of the exact same ceteris-paribus variation in anonymity on behavior in three of the most commonly used games in the social preference literature. Our data does not support the hypothesis that introducing experimenter-subject anonymity affects observed prosocial behavior. We do not observe significant effects of experimenter-subject anonymity on prosocial behavior in any of our games.
    Keywords: laboratory experiments, anonymity, scrutiny, prosocial behavior
    JEL: C91
    Date: 2011–08
  5. By: Bach Q. Ha; Jason D. Hartline
    Abstract: There is only one technique for prior-free optimal mechanism design that generalizes beyond the structurally benevolent setting of digital goods. This technique uses random sampling to estimate the distribution of agent values and then employs the Bayesian optimal mechanism for this estimated distribution on the remaining players. Though quite general, even for digital goods, this random sampling auction has a complicated analysis and is known to be suboptimal. To overcome these issues we generalize the consensus technique from Goldberg and Hartline (2003) to structurally rich environments that include, e.g., single-minded combinatorial auctions. JEL Code: C18, C53, D89
    Keywords: calibration, prediction
    Date: 2011–08–24
  6. By: Jenny Monheim-Helstroffer; Marie Obidzinski
    Abstract: The newly introduced codecision procedure in asylum lawmaking at the EU level is analyzed through the lens of bargaining theory. We find a substantial institutional status quo bias, which can contribute to explain the current delays in asylum lawmaking. When a policy is agreed on, codecision increases the European Parliament’s influence, although the bargaining outcome is biased towards the Council of Ministers. It can nonetheless improve asylum seekers’ welfare. The Commission detains an agenda setting power.
    Keywords: Asylum policy, Public choice, Codecision, EU institutions, Human rights.
    JEL: D72 D78 F22 K42 H53
    Date: 2011

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