nep-gth New Economics Papers
on Game Theory
Issue of 2011‒11‒01
thirteen papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Learning in Networks - An Experimental Study using Stationary Concepts By Siegried K. Berninghaus; Thomas Neumann; Bodo Vogt
  2. Fairness, Efficiency, and the Nash Bargaining Solution By Rachmilevitch, Shiran
  3. Trust, reciprocity and altruism: An impossible addition By Di Bartolomeo Giovanni; Stefano Papa
  4. Gradual Negotiations and Proportional Solutions By Rachmilevitch, Shiran
  5. Task Assignment with Autonomous and Controlled Agents By Florian Biermann; Victor Naroditskiy; Maria Polukarov; Alex Rogers; Nicholas Jennings
  6. On the Evolutionary Stability of Rational Expectations By William R. Parke; George A. Waters
  7. Computations on Simple Games using RelView By Rudolf Berghammer; Agnieszka Rusinowska; Harrie De Swart
  8. Endogenous Bid Rotation in Repeated Auctions By Rachmilevitch, Shiran
  9. Come misurare fiducia, reciprocità e altruismo By Stefano Papa
  10. Evolutionarily Stable Strategies in Sports Contests By Martin Grossmann
  11. Fair School Placement By José Alcalde Pérez; Antonio Romero-Medina
  12. Correlated Equilibrium in Games with Incomplete Information By Dirk Bergemann; Stephen Morris
  13. Robust Predictions in Games with Incomplete Information By Dirk Bergemann; Stephen Morris

  1. By: Siegried K. Berninghaus (Karlsruhe Institute of Technology (KIT), Institute for Economic Theory and Statistics); Thomas Neumann (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management, Empirical Economics); Bodo Vogt (Otto-von-Guericke-University Magdeburg, Faculty of Economics and Management, Empirical Economics)
    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 attice 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: 2011–10–19
  2. By: Rachmilevitch, Shiran (Department of Economics, University of Haifa)
    Abstract: A bargaining solution balances fairness and efficiency if each player's payoff lies between the minimum and maximum of the payoffs assigned to him by the egalitarian and utilitarian solutions. In the 2-person bargaining problem, the Nash solution is the unique scale-invariant solution satisfying this property. Additionally, a similar result, relating the weighted egalitarian and utilitarian solutions to a weighted Nash solution, is obtained. These results are related to a theorem of Shapley, which I generalize. For n>=3, there does not exist any n-person scale-invariant bargaining solution that balances fairness and efficiency.
    Keywords: Bargaining; fairness; efficiency; Nash solution
    JEL: D63 D71
    Date: 2011–10–09
  3. By: Di Bartolomeo Giovanni; Stefano Papa
    Abstract: This paper attempts to measure conditional and unconditional other-regarding preferences in two versions of an investment game: a canonical one and a cheap-talk variant where some pre-play is also allowed (i.e., non-binding unilateral messages). We find that counter-factual measures, as the well-known triadic design (Cox, 2004 [G&EB]) may systematically fail in distinguishing between conditional and unconditional other-regarding preferences due to the existence of frame effects. Specifically, by using indirect methods, we document conditional other-regarding preferences that are systematically neglected by the triadic approach. By inspecting result from the cheap-talk variant of the game, we also find that messages have no effect on average, but they affect the participants’ behavior leading to a polarization of their choices.
    Keywords: Conditional and unconditional other-regarding preferences, trust, reciprocity, investment game, frame effect, polarization effect, cheap talk
    JEL: C91 D83
    Date: 2011–10
  4. By: Rachmilevitch, Shiran (Department of Economics, University of Haifa)
    Abstract: I characterize the proportional N-person bargaining solutions by individual rationality, translation invariance, feasible set continuity, and a new axiom - interim improvement. The latter says that if the disagreement point d is known, but the feasible set is not - it may be either S or T, where S is a subset of T - then there exists a point d' in S, d' > d, such that replacing d with d' as the disagreement point would not change the final bargaining outcome, no matter which feasible set will be realized, S or T. In words, if there is uncertainty regarding a possible expansion of the feasible set, the players can wait until it is resolved; in the meantime, they can find a Pareto improving interim outcome to commit to - a commitment that has no effect in case negotiations succeed, but promises higher disagreement payoffs to all in case negotiations fail prior to the resolution of uncertainty.
    Keywords: Bargaining; Proportional solutions
    JEL: C78 D74
    Date: 2011–10–09
  5. By: Florian Biermann (International School of Economics at TSU, Tbilisi, Republic of Georgia); Victor Naroditskiy (School of Electronics and Computer Science, University of Southampton, UK); Maria Polukarov (School of Electronics and Computer Science, University of Southampton, UK); Alex Rogers (School of Electronics and Computer Science, University of Southampton, UK); Nicholas Jennings (School of Electronics and Computer Science, University of Southampton, UK)
    Abstract: We analyse assignment problems in which not all agents are controlled by the central planner. The autonomous agents search for vacant tasks guided by their own preference orders defined over subsets of the available tasks. The goal of the central planner is to maximise the total value of the assignment, taking into account the behaviour of the uncontrolled agents. This setting can be found in numerous real-world situations, ranging from organisational economics to "crowdsourcing" and disaster response. We introduce the Disjunctively Constrained Knapsack Game and show that its unique Nash equilibrium reveals the optimal assignment for the controlled agents. This result allows us to find the solution of the problem using mathematical programming techniques.
    Date: 2011–09
  6. By: William R. Parke (Department of Economics, University of North Carolina); George A. Waters (Department of Economics, Illinois State University)
    Abstract: Evolutionary game theory provides a fresh perspective on the prospects that agents with heterogeneous expectations might eventually come to agree on a single expectation corresponding to the efficient markets hypothesis. We establish conditions where agreement on a unique forecast is stable, but also show that persistent heterogeneous expectations can arise if those conditions do not hold. The critical element is the degree of curvature in payoff weighting functions agents use to value forecasting performance. We illustrate our results in the context of an asset pricing model where a martingale solution competes with the fundamental solution for agents’ attention.
    Keywords: rational expectations, hetergeneous expectations, evolutionary game theory, asset pricing, efficient markets hypothesis
    JEL: C73 D84 G12 C22
    Date: 2011–10
  7. By: Rudolf Berghammer (Institut für Informatik - Universitat Kiel); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Harrie De Swart (Faculteit Wijsbegeerte-Logica en taalanalyse - Universiteit van Tilburg)
    Abstract: Simple games are a powerful tool to analyze decision-making and coalition formation in social and political life. In this paper we present relational models of simple games and develop relational algorithms for solving some game-theoretic basic problems. The algorithms immediately can be transformed into the language of the Computer Algebra system RelView and, therefore, the system can be used to solve the problems and to visualize the results of the computations.
    Keywords: relational algebra ; RelView ; simple games
    Date: 2011
  8. By: Rachmilevitch, Shiran (Department of Economics, University of Haifa)
    Abstract: I study collusion between two bidders in a general symmetric IPV repeated auction, without communication, side transfers, or public randomization. I construct a collusive scheme, endogenous bid rotation, that generates a payoff larger than the bid rotation payoff.
    Keywords: Auctions; Bid rotation; Collusion; Repeated games
    JEL: D44 D82
    Date: 2011–10–09
  9. By: Stefano Papa
    Abstract: Questo paper illustra dal punto di vista sperimentale come la letteratura ha affrontato il problema della misurazione della fiducia, reciprocità e altruismo (conditional and unconditional other-regarding preferences) nel gioco dell’investimento.
    Keywords: Conditional and unconditional other-regarding preferences, trust, reciprocity, investment game
    JEL: C91 D83
    Date: 2011–09
  10. By: Martin Grossmann (Department of Business Administration, University of Zurich)
    Abstract: Abstract: In the recent years, many clubs in the biggest European soccer leagues have run into debts. The sports economic literature provides several explanation for this development, e.g., the league structure (open versus closed league), club constitutions, ruinous rat races between clubs. While the majority of the articles presume the well-known Nash equilibrium concept, I apply evolutionary game theory in a sports contest model. If clubs follow evolutionarily stable strategies (ESS), then ESS generate higher investments and lower profits than predicted by Nash strategies independent of win maximizing or profit maximizing clubs. Overdissipation of the rent is possible for Nash strategies as well as for ESS.
    Keywords: Contest, evolutionary stable strategies, utility maximization, team sports league
    JEL: C72 C73 D74 L13 L83
    Date: 2011–10
  11. By: José Alcalde Pérez (Universidad de Alicante); Antonio Romero-Medina (Universidad Carlos III de Madrid)
    Abstract: This paper introduces &tao;-fairness as a compromise solution reconciling Pareto efficiency and equity in School Choice Problems. We show that, by considering a weak notion of equity that we refer to as ¿-equity, it is possible to contribute positively to solve an open debate, originated by the efficiency-equity trade-off of the schooling problem. We also suggest a slight modification to some allocative procedures recently introduced in the United States to compute ¿-fair allocations and provide support for this (possible) reformulation.
    Keywords: School Choice Problem, Fair Matching
    JEL: C78 D63 I28
    Date: 2011–10
  12. By: Dirk Bergemann; Stephen Morris
    Date: 2011–10–20
  13. By: Dirk Bergemann; Stephen Morris
    Date: 2011–10–20

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