nep-gth New Economics Papers
on Game Theory
Issue of 2012‒05‒29
twelve papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Weighted Solidarity Values By Emilio Calvo; Esther Gutiérrez
  2. An optimal bound to access the core in TU-games By Béal, Sylvain; Rémila, Eric; Solal, Philippe
  3. Strategic behavior in Schelling dynamics: A new result and experimental evidence By Juan Miguel Benito; Pablo Brañas-Garza; Penélope Hernández; Juan A. Sanchis
  4. Participation games and international environmental agreements: a nonparametric model By Karp, Larry; Simon, Leo
  5. Robustness of equilibrium price dispersion in finite market games By Breton, Régis; Gobillard, Bertrand
  6. Public-good experiments with large groups By Joachim Weimann; Jeannette Brosig-Koch; Heike Hennig-Schmidt; Claudia Keser; Christian Stahr
  7. Pipeline Power By Franz Hubert; Onur Cobanli
  8. When overconfident agents slow down collective learning By Juliette Rouchier; Emily Tanimura
  9. Stability and Index of the Meet Game on a Lattice By Joseph Abdou
  10. Dynamic Models of International Environmental Agreements: A Differential Game Approach By Emilio Calvo; Santiago J. Rubio
  11. Optimal nondiscriminatory auctions with favoritism By Federico Weinschelbaum; Leandro Arozamena; Nicolas Shunda
  12. Gender Differences in Bargaining Outcomes: A Field Experiment on Discrimination By Marco Castillo; Ragan Petrie; Máximo Torero; Lise Vesterlund

  1. By: Emilio Calvo (ERI-CES); Esther Gutiérrez (Universidad del País Vasco/EHU)
    Abstract: We present a noncooperative bargaining protocol among n players, applied to the setting of cooperative games in coalitional form with transferable utility. In this model, players are chosen randomly to make proposals until one is accepted unanimously, and after each proposal rejection, the probability that players leave the game increases. If after a rejection, some players withdraw the bargaining, the remaining players continue the process. We define a new family of values, called the weighted solidarity values, and we show that these values arise as the associated equilibrium payoffs of this bargaining protocol. In these values players have an altruistic behavior between them as the null player property is not satisfied.
    Keywords: n-person bargaining; coalitional games; altruism; Solidarity value; Shapley value
    JEL: C71
    Date: 2012–03
  2. By: Béal, Sylvain; Rémila, Eric; Solal, Philippe
    Abstract: For any transferable utility game in coalitional form with a nonempty core, we show that that the number of blocks required to switch from an imputation out of the core to an imputation in the core is at most n-1, where n is the number of players. This bound exploits the geometry of the core and is optimal. It considerably improves the upper bounds found so far by Koczy (2006), Yang (2010, 2011) and a previous result by ourselves (2012) in which the bound was n(n-1)/2.
    Keywords: Core ; Block ; Weak dominance relation ; Strong dominance relation ; Davis-Maschler reduced games
    JEL: C71
    Date: 2012–05–23
  3. By: Juan Miguel Benito (Universidad Pública de Navarra); Pablo Brañas-Garza (Universidad de Granada); Penélope Hernández (ERI-CES); Juan A. Sanchis (ERI-CES)
    Abstract: In this paper we experimentally test Schelling's (1971) segregation model and confirm the striking result of segregation. In addition, we extend Schelling's model theo- retically by adding strategic behavior and moving costs. We obtain a unique subgame perfect equilibrium in which rational agents facing moving costs may find it optimal not to move (anticipating other participants' movements). This equilibrium is far for full segregation. We run experiments for this extended Schelling model. We find that the percentage of strategic players dramatically increases with the cost of moving and that the degree of segregation depends on the distribution of rational subjects.
    Keywords: Subgame perfect equilibrium, segregation, experimental games
    Date: 2012–03
  4. By: Karp, Larry (University of California, Berkeley. Dept of agricultural and resource economics); Simon, Leo (University of California, Berkeley. Dept of agricultural and resource economics)
    Abstract: We examine the size of stable coalitions in a participation game that has been used to model international environmental agreements, cartel formation, R&D spillovers, and monetary policy. The literature to date has relied on parametric examples; based on these examples, a consensus has emerged that in this kind of game, the equilibrium coalition size is small, except possibly when the potential benefits of cooperation are also small. In this paper, we develop a non-parametric approach to the problem, and demonstrate that the conventional wisdom is not robust. In a general setting, we identify conditions under which the equilibrium coalition size can be large even when potential gains are large. Contrary to previously examined leading special cases, we show that reductions in marginal abatement costs in an international environmental game can increase equilibrium membership, and we provide a measure of the smallest reduction in costs needed to support a coalition of arbi- trary size.
    Keywords: stable coalitions, participation games, international environmental agreement, climate agreement, trans-boundary pollution, investment spellovers
    JEL: C72 H4 Q54
    Date: 2012–02
  5. By: Breton, Régis; Gobillard, Bertrand
    Abstract: We propose an approach to restricting the set of equilibria in a market game and use it to assess the robustness of the price dispersion results obtained by Koutsougeras [2003, J. Econ. Theory 108, 169–175] in the multiple trading posts setup. More precisely, we perturb the initial game by the introduction of transaction costs and our main results are the following. (i) No equilibrium with price dispersion of the game with costless transactions can be approached by equilibria with positive transaction costs as costs get arbitrarily small. (ii) When this type of perturbation is considered the set of equilibrium outcomes is not affected by the number of trading posts. In addition, the analysis hints at conditions required for non-zero transaction costs to serve as a source of price dispersion in this class of exchange economies.
    Keywords: Strategic market games, law of one price, perturbed games, equilibrium refinement.
    JEL: C72 D43 D50
    Date: 2011–08
  6. By: Joachim Weimann (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Jeannette Brosig-Koch; Heike Hennig-Schmidt; Claudia Keser; Christian Stahr (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: Many of real-world public-goods are characterized by a marginal per capita return (MPCR) close to zero and have to be provided by large groups. Up until now, there is almost no evidence on how large groups facing a low MPCR behave in controlled public-good laboratory experiments involving financial incentives. Connecting four experimental laboratories located in four di¤erent German universities via Internet, we are able to run such experiments. In ad-dition to the group size (60 and 100 subjects), we vary the MPCR which is as small as 0:02 or 0:04. Our data reveal a strong MPCR effect, but almost no group-size e¤ect. Our data demonstrates that, even in large groups and for low MPCRs, considerable contributions to public goods can be expected. Interestingly, the contribution patterns observed in large and very small groups are very similar. To the best of our knowledge, this study is the first one that includes large-group laboratory experiments with a small MPCR under conditions comparable to previous small-group standard public-good experiments.
    JEL: C91 C72 H42
    Date: 2012–03
  7. By: Franz Hubert; Onur Cobanli
    Abstract: We use cooperative game theory to analyze the strategic impact of three controversial pipeline projects. Two of them, Nord Stream and South Stream, allow Russian gas to bypass transit countries, Ukraine and Belarus. Nord Stream’s strategic value turns out to be huge, justifying the high investment cost for Germany and Russia. The additional leverage obtained through South Stream, in contrast, appears small. The third project, Nabucco, aims at diversifying Europe’s gas imports by accessing producers in Middle East and Central Asia. The project has a large potential to curtail Russia’s power, but the benefits accrue mainly to Turkey, while the gains for the EU are negligible.
    Keywords: Bargaining Power, Transport Network, Natural Gas
    JEL: L5 L9 O22
    Date: 2012–05
  8. By: Juliette Rouchier (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Emily Tanimura (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: This paper presents a model of influence where agents' beliefs are based on an objective reality, such as the properties of an environment. The perception of the objective reality is not direct: all agents know is that the more correct a belief, the more successful the actions that are deduced from this belief. (A pair of agents can influence each other when )Agents can influence eachother by pair when they perform a joint action. They are not only defined by individual beliefs, but also idyosynchratic confidence in their belief - this means that they are not all willing to (engage in action with) act with agents with a different belief and to be influenced by them. We show here that the distribution of confidence in the group has a huge impact on the speed and quality of collective learning and in particular that a small number of overconfident agents can prevent the whole group frow learning properly.
    Date: 2011–07–06
  9. By: Joseph Abdou (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We study the stability and the stability index of the meet game form defined on a meet semilattice. Given any active coalition structure, we show that the stability index relative to the equilibrium, to the beta core and to the exact core is a function of the Nakamura number, the depth of the semilattice and its gap function.
    Keywords: Effectivity Function, Lattice, Stability Index, Equilibrium, Nakamura Number
    Date: 2011–07
  10. By: Emilio Calvo (ERI-CES); Santiago J. Rubio (ERI-CES)
    Abstract: This article provides a survey of dynamic models of international environmental agreements (IEAs). The focus is on environmental problems that are caused by a stock pollutant as are the cases of the acid rain and climate change. For this reason, the survey only reviews the literature that utilizes dynamic state-space games to analyze the formation of international agreements to control pollution. The survey considers both the cooperative approach and the noncooperative approach. In the case of the latter, the survey distinguishes between the models that assume binding agreements and those that assume the contrary. An evaluation of the state of the art is presented in the conclusions along with suggestions for future research.
    Keywords: Externalities; public goods; pollution; international environmental agreements; state-space dynamic games; differential games; cooperative and noncooperative games; trigger strategies
    JEL: C73 D62 H41 Q50
    Date: 2012–04
  11. By: Federico Weinschelbaum (Department of Economics, Universidad de San Andres & CONICET); Leandro Arozamena (Department of Economics, UTDT & CONICET); Nicolas Shunda (University of Redlands)
    Abstract: In many auction settings, there is favoritism: the seller's welfare depends positively on the utility of a subset of potential bidders. However, laws or regulations may not allow the seller to discriminate among bidders. We find the optimal nondiscriminatory auction in a private value, single-unit model under favoritism. At the optimal auction there is a reserve price, or an entry fee, which is decreasing in the proportion of preferred bidders and in the intensity of the preference. Otherwise, the highest-valuation bidder wins. We show that, at least under some conditions, imposing a no-discrimination constraint raises expected seller revenue.
    Keywords: auctions,favoritism,nondiscriminatorymechanisms
    JEL: C72 D44
    Date: 2012–03
  12. By: Marco Castillo; Ragan Petrie; Máximo Torero; Lise Vesterlund
    Abstract: We examine gender differences in bargaining outcomes in a highly competitive and commonly used market: the taxi market in Lima, Peru. Examining the entire path of negotiation we find that men face higher initial prices and rejection rates. These differentials are consistent with both statistical and taste-based discrimination. To identify the source of the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating. The signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination. Our study secures identification within the market of interest and demonstrates that there are environments where sophisticated statistical inference is the sole source of differential gender outcomes.
    JEL: C78 C93 J16
    Date: 2012–05

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