|
on Game Theory |
|
Issue of 2012‒06‒25
fifteen papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University |
| By: | Dominik Karos (Department of Economics and Statistics, Saarland University) |
| Abstract: | The class of games with one apex player is generalized to the class of games with a collection of apex sets. These simple games, together with a power index, canonically induce a hedonic coalition formation game. A monotonicity property of solutions is introduced and its meaning for the induced hedonic game is analyzed. Necessary and sufficient conditions for the existence of core stable partitions are stated and core stable partitions are characterized. |
| Keywords: | Apex Games, Core Stability, Hedonic Games, Strong Monotonicity |
| JEL: | C71 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.38&r=gth |
| By: | Heinrich H. Nax; Bary S.R. Pradelski; H. Peyton Young |
| Abstract: | Decentralized matching platforms on the internet allow large numbers of agents to interact anonymously at virtually no cost. Very little information is available to market participants and trade takes place at many different prices simultaneously. We propose a decentralized learning process in such environments that leads to stable and efficient outcomes. Agents on each side of the market make demands of potential partners and are matched if their demands are mutually compatible. Matched agents occasionally experiment with higher demands, while unmatched agents lower their demands in the hope of attracting partners. This learning process implements core allocations even though agents have no knowledge of other agents’ strategies, payoffs, or the structure of the game, and there is no central authority with such knowledge either. |
| Keywords: | Assignment games, Cooperative games, Core, Evolutionary game theory, Learning, Matching markets, Stochastic stability |
| JEL: | C71 C73 C78 D83 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:607&r=gth |
| By: | Demichelis, Stefano |
| Abstract: | We show that in long repeated games- or in infinitely repeated games with discount rate close to one- payoffs corresponding to evolutionary stable sets are asymptotically efficient, as intuition suggests. Actions played at the beginning of the game are used as messages that allow players to coordinate on Pareto optimal outcomes in the following stages. Strategies following some simple and intuitive "behavioral maxims" are shown to be able to drive out inefficient ones from a population. The result builds a bridge between the theory of repeated games and that of communication games that will be further investigated. |
| Keywords: | Repeated Games; Evolution; Communication; Efficiency |
| JEL: | C7 |
| Date: | 2012–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39311&r=gth |
| By: | Nizar Allouch (Queen Mary, University of London, School of Economics and Finance) |
| Abstract: | This paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors’ provisions. We present a proof for existence and uniqueness of a Nash equilibrium with general best-reply functions. Our uniqueness result simultaneously extends similar results in Bergstrom, Blume, and Varian (1986) on the private provision of public goods to networks and Bramoullé, Kranton, and D'Amours (2011) on games of strategic substitutes to nonlinear best-reply functions. In addition, we investigate the neutrality result of Warr (1983) and Bergstrom, Blume, and Varian (1986) whereby consumers are able to offset income redistributions and tax-financed government contributions. To this effect, we establish that the neutrality result has a limited scope of application beyond regular networks. |
| Keywords: | Public Goods, Uniqueness Of Nash Equilibrium, Network Games, Neutrality, Bonacich Centrality, Main Eigenvalue |
| JEL: | C72 D31 H41 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.40&r=gth |
| By: | Fabrizio Germano; Peio Zuazo-Garin |
| Abstract: | We extend Aumann's theorem [Aumann, 1987] deriving correlated equilibria as a consequence of common priors and common knowledge of rationality by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker notion, joint p-belief of rationality, where agents believe the other agents are rational with probability p or more. We show that behavior in this case constitutes a constrained correlated equilibrium of a doubled game satisfying certain p-belief constraints and characterize the topological structure of the resulting set of p-rational outcomes. We establish continuity in the parameter p and show that, for p sufficiently close to one, the p-rational outcomes are close to the correlated equilibria and, with high probability, supported on strategies that survive the iterated elimination of strictly dominated strategies. Finally, we extend Aumann and Dreze's theorem [Aumann and Dreze, 2008] on rational expectations of interim types to the broader p-rational belief systems, and also discuss the case of non-common priors. |
| Keywords: | correlated equilibrium, approximate common knowledge, bounded rationality, p-rational belief system, common prior, information, noncooperative game |
| JEL: | C72 D82 D83 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:642&r=gth |
| By: | Klaus Abbink (Department of Economics, Monash University, Clayton, Australia); David Masclet (University of Rennes 1, CREM-CNRS, France); Daniel Mirza (Université François Rabelais de Tours, France) |
| Abstract: | In this paper, we study the determinants of inter-groups conflicts, focusing our attention on the role of inequality aversion. First, we experimentally investigate whether inequality is a driving force of inter-group conflicts. Second, we investigate the factors that make preferences for conflict translate into actions. Inter-group conflicts require both coordination and necessary financial material resources. Our experiment consists of a two-stage game. First, subjects play a proportional rent-seeking game to share a prize. In a second stage players can coordinate with the other members of their group to reduce (“burn”) the other group members’ payoff. Treatments differ in the degree of social inequality set between the two groups by attributing to some subjects (the advantaged group) a larger share of the price than other subjects (the disadvantaged group) for the same amount of effort. We observe frequent conflicts, where, as expected, disadvantaged groups “burn” more money than advantaged groups. Surprisingly, however the frequency of conflicts decreases with the degree of inequality. Our data allow us to identify resignation as the driving force behind this phenomenon. |
| Keywords: | Design of experiments, Experimental economics, Social Inequality, Conflicts |
| JEL: | D72 C91 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cccrwp:2012-07-ccr&r=gth |
| By: | Fabrizio Germano; Peio Zuazo-Garin |
| Abstract: | We extend Aumann's theorem (Aumann, 1987) in deriving correlated equilibria as a consequence of common priors and common knowledge of rationality by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker notion, p-belief of rationality, where agents believe the other agents are rational with probabilities p or more. We show that behavior in this case constitutes a constrained correlated equilibrium of a doubled game satisfying certain p-belief constraints and characterize the topological structure of the resulting set of p-rational outcomes. We establish continuity in the parameters p and show that, for p sufficiently close to one, the p-rational outcomes are close to the correlated equilibria and, with high probability, supported on strategies that survive the iterated elimination of strictly dominated strategies. Finally, we extend Aumann and Dreze's theorem (Aumann and Dreze, 2008) on rational expectations of interim types to the broader p-rational belief systems, and also discuss the case of non-common priors. |
| Keywords: | Correlated equilibrium, approximate common knowledge, bounded rationality, p-rational belief system, common prior, information, noncooperative game |
| JEL: | C72 D82 D83 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp610&r=gth |
| By: | Jeremy T. Fox; Chenyu Yang |
| Abstract: | Agents in two-sided matching games vary in characteristics that are unobservable in typical data on matching markets. We investigate the identification of the distribution of these unobserved characteristics using data on who matches with whom. The distribution of match-specific unobservables cannot be fully recovered without information on unmatched agents, but the distribution of a combination of unobservables, which we call unobserved complementarities, can be identified. Knowledge of the unobserved complementarities is sufficient to construct certain counterfactuals. The distribution of agent-specific unobservables is identified under different conditions. |
| JEL: | C35 C78 J12 L0 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18168&r=gth |
| By: | Idione Soza (School of Economics, The University of Queensland); Paulo Barelli |
| Abstract: | In this note we prove an equilibrium existence theorem for games with discontinuous pay- offs and convex and compact strategy spaces. It generalizes the classical result of Reny (1999) [Econometrica 67, p. 1029-1056], as well as the recent paper of McLennan, Monteiro, and Tourky (2011) [Econometrica 79, p. 1643-1664]. Our condition is simple and easy to verify. Importantly, an example of a spatial location model shows that our conditions allow for eco- nomically meaningful payoff discontinuities, that are not covered by other conditions in the literature. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:467&r=gth |
| By: | Donja Darai; Silvia Grätz |
| Abstract: | Physical attractiveness is associated with goodness in the literature. In particular, people think of attractive ones as being more socially skillful, trustworthy, or likeable. This "beauty-is-good" stereotype can induce a beauty premium in various economic interactions. Cooperative behavior might be one more such attribute that is elicited by physical attractiveness. In this paper we analyze this potential relationship. We combine data from 211 episodes of a television game show, in which contestants play a face-to-face prisoner's dilemma game, with data from independent facial appearance ratings of these contestants. The main finding is that attractiveness is an important factor for cooperative behavior even in an environment of very high stakes, communication, and past behavior. Although there is no difference between facially attractive and unattractive contestants regarding the decision to cooperate, facing a facially attractive opponent increases cooperation significantly. Especially, in mixed-gender interactions males and females are more likely to cooperate with a facially attractive counterpart. The marginal beauty premium for a one standard deviation increase in facial attractiveness amounts to an increase of a contestant's expected earnings of £2 153. Moreover, the probability to obtain positive earnings increases by 5.9 percentage points for facially attractive contestants. |
| Keywords: | Beauty premium, stereotypes, cooperation, prisoner's dilemma |
| JEL: | C71 D83 Z13 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:082&r=gth |
| By: | Hervés-Estévez, Javier; Moreno-García, Emma |
| Abstract: | We analyze bargaining mechanisms for allocating resources in atomless econo- mies. We provide results proving that it is not necessary to consider the forma- tion of all coalitions in order to obtain the bargaining sets. This is shown under restrictions of different nature, triggering different equivalence results. In addi- tion, several counterexamples state boundaries for the possibility of extending and generalizing our results. |
| Keywords: | Bargaining sets; coalitions; core; veto mechanism |
| JEL: | D11 D41 D51 D00 |
| Date: | 2012–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39385&r=gth |
| By: | Erik O. Kimbrough (Department of Economics, Simon Fraser University, Canada); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University, USA) |
| Abstract: | We design an experiment to explore the impact of earned entitlements on the frequency and intensity of conflicts in a two-stage bargaining and conflict game with side-payments. In this game, residents (Proposers) make side-payment offers and contestants (Responders) decide whether to accept the offers and whether to engage in a conflict. When subjects earn their roles, conflicts are 44% more likely to be avoided than when roles are assigned randomly. Earned rights impact behavior in three important ways: (1) residents who have earned their position persistently offer larger side-payments; (2) larger offers lead to a lower probability of conflict, but (3) residents whose offers do not lead to conflict resolution respond spitefully and exhibit greater conflict expenditure. Hence, with earned rights, the positive welfare effects of reduced conflict frequency are offset by higher conflict intensity. |
| Keywords: | contests, conflict resolution, side-payments, entitlements, experiments |
| JEL: | C72 C91 D72 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:12-16&r=gth |
| By: | Stéphane Robin (GATE Lyon Saint-Etienne); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics); Marie-Claire Villeval (GATE Lyon Saint-Etienne) |
| Abstract: | We provide experimental evidence of worker's ingratiation by opinion conformity and of managers' discrimination in favor of workers with whom they share similar opinions. In our Baseline, managers can observe both workers' performance at a task and opinions before assigning unequal payoffs. In the Ingratiation treatment, workers can change their opinion after learning that held by manager. In the Random treatment, workers can also change opinion but payoffs are assigned randomly, which gives a measure of non-strategic opinion conformism. We find evidence of high ingratiation indices, as overall, ingratiation is effective. Indeed, managers rewards opinion conformity, and even more so when opinions cannot be manipulated. Additional treatments reveal that ingratiation is cost sensitive and that the introduction of performance pay for managers as well as a less noisy measure of performance increase the role of relative performance in the assignment of payoffs, without eliminating the reward of opinion conformity. |
| Keywords: | Ingratiation, opinion conformity, favoritism, discrimination, social distance, experiment. |
| JEL: | C7 C92 D03 D86 M51 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12032&r=gth |
| By: | Jose Apesteguia; Miguel Ballester; Yusufcan Masatlioglu |
| Abstract: | We offer complete characterizations of the equilibrium outcomes of two prominent agenda voting institutions that are widely used in the democratic world: the amendment, also known as the Anglo-American procedure, and the successive, or equivalently the Euro-Latin procedure. Our axiomatic approach provides a proper understanding of these voting institutions, and allows comparisons between them, and with other voting procedures. |
| Keywords: | Strategic Voting, Agendas, Committees, Institutions, Axioms |
| JEL: | C72 D02 D71 D72 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1302&r=gth |
| By: | Houba, Harold; Pham Do, Kim Hang; Zhu, Xueqin |
| Abstract: | The Mekong River is shared by six Asian countries. Over the years there has been both conict and cooperation on managing the water resources to meet population growth, climate change and the desire for economic development. This paper exploits an axiomatic bargaining approach to examine how China and the Mekong River Commission (MRC) might negotiate e¤ective joint management. We show that there are signi cant welfare gains from cooperation in this region; an exogenous budget provides stronger incentives for cooperation; and the MRC should be extended to include all a¤ected nations for sustainable management and future development. The economic costs of the current weak governance and its e¤ects on the negotiated joint management are discussed.. |
| Keywords: | Joint River-Basin Management, Transboundary River, Nash Bargaining Solution, Optimization, Mekong River., International Development, Resource /Energy Economics and Policy, C71, C72, D62, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare12:125063&r=gth |