
on Game Theory 
Issue of 2013‒03‒09
thirteen papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University 
By:  Simon MacKenzie; Manfred Kerber; Colin Rowat 
Keywords:  pillage games, cooperative game theory, core, stable sets 
JEL:  C63 C71 P14 
Date:  2013–02 
URL:  http://d.repec.org/n?u=RePEc:bir:birmec:1307&r=gth 
By:  Matthew W. McCarter (Argyros School of Business and Economics, Chapman University); Anya C. Samak (School of Human Ecology, University of WisconsinMadison); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University) 
Abstract:  It is common in organizational life to be simultaneously involved in multiple collective actions. These collective actions may be modeled using public good dilemmas. The developing social dilemma literature has two perspectives – the “divided loyalties” and “conditional cooperation” perspectives – that give opposite predictions about how individuals will behave when they simultaneously play two identical public good games. The current paper creates consensus between these social dilemma perspectives by examining cooperative behavior of participants interacting in two public good games with either different or the same group members. In each round, individuals have a common budget constraint across the two games. In support of the conditional cooperator’s perspective of social dilemmas, we find that playing two games with different, rather than same, group members increases overall contributions. Over the course of the experiment, participants playing two games with different group members shift their contributions significantly more often toward more cooperative public good games than participants playing with the same group members. 
Keywords:  cooperation, conditional cooperation, public good, experiments, group composition 
JEL:  C72 C73 C91 D03 H41 
Date:  2013 
URL:  http://d.repec.org/n?u=RePEc:chu:wpaper:1308&r=gth 
By:  Kleppe, John (CentER and Department of Econometrics and Operations Research); Reijnierse, Hans (CentER and Department of Econometrics and Operations Research); Sudhölter, Peter (Department of Business and Economics) 
Abstract:  If the excesses of the coalitions in a transferable utility game are weighted, then we show that the arising weighted modifications of the wellknown (pre)nucleolus and (pre)kernel satisfy the equal treatment property if and only if the weight system is symmetric in the sense that the weight of a subcoalition of a grand coalition may only depend on the grand coalition and the size of the subcoalition. Hence, the symmetrically weighted versions of the (pre)nucleolus and the (pre)kernel are symmetric, i.e., invariant under symmetries of a game. They may, however, violate anonymity, i.e., they may depend on the names of the players. E.g., a symmetrically weighted nucleolus may assign the classical nucleolus to one game and the per capita nucleolus to another game. We generalize Sobolev's axiomatization of the prenucleolus and its modification for the nucleolus as well as Peleg's axiomatization of the prekernel to the symmetrically weighted versions. Only the reduced games have to be replaced by suitably modified reduced games whose definitions may depend on the weight system. Moreover, it is shown that a solution may only satisfy the mentioned sets of modified axioms if the weight system is symmetric. 
Keywords:  TU game; nucleolus; kernel 
JEL:  C71 
Date:  2013–02–01 
URL:  http://d.repec.org/n?u=RePEc:hhs:sdueko:2013_003&r=gth 
By:  Marilda Sotomayor 
Abstract:  Aiming to obtain new characterizations for the concepts of core, cooperative equilibrium and competitive equilibrium, and new correlations among these concepts, we introduce labor time into the assignment game. Two manytomany matching models are obtained, distinguished by the nature of the agreements  rigid and flexible. An example illustrates that the characteristic function form does not always fully represent the cooperative structure of the two markets. Two different notions of demand correspondence generate distinct sets of competitive equilibrium allocations. The connection between the cooperative structures of both markets and the cooperative and competitive structures of each market is established through five cooperative solution sets proved to be nonempty, distinct and correlated by the set inclusion  one set is a superset of the next: the maximal set is the core; the second one characterizes the cooperative equilibria for the rigid market; the third set characterizes the cooperative equilibria for the flexible market; the other two sets characterize the competitive equilibrium allocations for the two competitive markets. 
Keywords:  stable allocations, core, competitive equilibrium allocations, feasible 
JEL:  C78 D78 
Date:  2013–02–19 
URL:  http://d.repec.org/n?u=RePEc:spa:wpaper:2013wpecon02&r=gth 
By:  Giovanna Devetag; Sibilla Di Guida; Luca Polonio 
Abstract:  We analyze subjects' eye movements while they make decisions in a series of oneshot games. The majority of them perform a partial and selective analysis of the payoff matrix, often ignoring the payoffs of the opponent and/or paying attention only to specific cells. Our results suggest that subjects apply boundedly rational decision heuristics that involve best responding to a simplification of the decision problem, obtained either by ignoring the other players' motivations or by considering them only for a subset of outcomes. Finally, we find a correlation between types of eye movements observed and choices in the games. 
Keywords:  oneshot games, eyetracking, similarity, categorization, focal points, individual behavior, experimental economics, behavioral economics 
Date:  2013–02–13 
URL:  http://d.repec.org/n?u=RePEc:ssa:lemwps:2013/05&r=gth 
By:  David PérezCastrillo; Marilda Sotomayor 
Abstract:  We prove a “General Manipulability Theorem” for general onetoone twosided matching markets with money. This theorem implies two folk theorems, the Manipulability Theorem and the General Impossibility Theorem, and provides a sort of converse of the NonManipulability Theorem (Demange, 1982, Leonard, 1983, Demange and Gale, 1985). 
Keywords:  Matching, competitive equilibrium, optimal competitive equilibrium, manipulability, competitive equilibrium mechanism, competitive equilibrium rule 
JEL:  C78 D78 
Date:  2013–02–18 
URL:  http://d.repec.org/n?u=RePEc:spa:wpaper:2013wpecon1&r=gth 
By:  Bobtcheff, Catherine (Toulouse School of Economics (CNRS, LERNA)); Bolte, Jérôme (Toulouse School of Economics (GREMAQ)); Mariotti, Thomas (Toulouse School of Economics (CNRS, GREMAQ, IDEI)) 
Abstract:  We model academic competition as a game in which researchers ¯ght for priority. Researchers privately experience breakthroughs and decide how long to let their ideas mature before making them public, thereby establishing priority. In a tworesearcher, symmetric environment, the resulting preemption game has a unique equilibrium. We study how the shape of the breakthrough distribution affects equilibrium maturation delays. Making researchers better at discovering new ideas or at developing them has contrasted effects on the quality of research outputs. Finally, when researchers have different innovative abilities, speed of discovery and maturation of ideas are positively correlated in equilibrium. 
Keywords:  Academic Competition, Preemption Games, Private Information. 
JEL:  C73 D82 
Date:  2013–02 
URL:  http://d.repec.org/n?u=RePEc:ide:wpaper:26784&r=gth 
By:  Paula Jaramillo 
Abstract:  Consider a problem in which the cost of building an irrigation canal has to be divided among a set of people. Each person has different needs. When the needs of two or more people overlap, there is congestion. In problems without congestion, a unique canal serves all the people and it is enough to finance the cost of the largest need to accommodate all the other needs. In contrast, when congestion is considered, more than one canal might need to be built and each canal has to be financed. In problems without congestion, axioms related with fairness (equal treatment of equals) and group participation constraints (nosubsidy or core constraints) are compatible. With congestion, we show that these two axioms are incompatible. We define weaker axioms of fairness (equal treatment of equals per canal) and group participation constraints (nosubsidy across canals). These axioms in conjunction with a solidarity axiom (congestion monotonicity) and another axiom (independence of atleastaslargelength) characterize the sequential weighted contribution family. Moreover, when we include a stronger version of congestion monotonicity and other axioms, we characterize subfamilies of these rules. 
Date:  2013–02–10 
URL:  http://d.repec.org/n?u=RePEc:col:000089:010553&r=gth 
By:  Walter Bossert; Yves Sprumont 
Abstract:  A choice function is backwardsinduction rationalizable if there exists a finite perfectinformation extensiveform game such that, for each subset of alternatives, the backwardsinduction outcome of the restriction of the game to that subset of alternatives coincides with the choice from that subset. We prove that every choice function is backwardsinduction rationalizable. 
JEL:  C72 D70 
Date:  2013 
URL:  http://d.repec.org/n?u=RePEc:mtl:montec:012013&r=gth 
By:  Massimiliano Amarante 
Abstract:  Let E be a class of event. Conditionally Expected Utility decision makers are decision makers whose conditional preferences %E, E 2 E, satisfy the axioms of Subjective Expected Utility theory (SEU). We extend the notion of unconditional preference that is conditionally EU to unconditional preferences that are not necessarily SEU. We give a representation theorem for a class of such preferences, and show that they are Invariant Biseparable in the sense of Ghirardato et al.[7]. Then, we consider the special case where the unconditional preference is itself SEU, and compare our results with those of Fishburn [6]. 
Date:  2013 
URL:  http://d.repec.org/n?u=RePEc:mtl:montec:022013&r=gth 
By:  Richter, Jan (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Viehmann, Johannes (Energiewirtschaftliches Institut an der Universitaet zu Koeln) 
Abstract:  We study two electricity markets connected by a fixed amount of crossborder capacity. The total amount of capacity is known to all electricity traders and allocated via an auction. The capacity allocated to each bidder in the auction remains private information. We assume that traders are faced with a demand function reflecting the relationship between electricity transmitted between the markets and the spot price difference. Therefore, traders act like BayesianCournot oligopolists in exercising their transmission rights when presented with incomplete information about the competitors’ capacities. Our analysis breaks down the welfare effect into three different components: Cournot behavior, capacity constraints, and incomplete information. We find that social welfare increases with the level of information with which traders are endowed. 
Keywords:  Cournot Oligopoly; incomplete information; capacity constraints; electricity markets; interconnector; crossborder trade 
JEL:  C72 D43 L13 L94 
Date:  2013–02–18 
URL:  http://d.repec.org/n?u=RePEc:ris:ewikln:2013_005&r=gth 
By:  Yohei Tenryu (Graduate School of Economics, Kyoto University) 
Abstract:  Using a differential game, we analyze a multiple agent economy in which there are common and private capital stocks. Each interest group can access the common capital and its own private capital stocks but not anyone else's private capital stocks. Considering the situation in which each interest group can observe and has interest in the opponents' private capital stocks, we show the following. The capital stocks have a negative effect on the consumption of each agent. The growth rate of the common capital does not depend on the technology level of the common sector; that is there is no voracity effect. Each agent's welfare is always lower than it is in the case that each agent has no interest in the opponents' private capital stocks. 
Keywords:  differential game, Markovperfect equilibrium, the voracity effect 
JEL:  C73 O10 O40 
Date:  2013–02 
URL:  http://d.repec.org/n?u=RePEc:kyo:wpaper:850&r=gth 
By:  Damien S.Eldridge (School Economics, La Trobe University) 
Abstract:  The health care industry in some countries displays a gated structure. Rather than approaching a specialist directly, a patient will first seek a referral from a general practitioner. We provide one possible explanation for such an industry structure. If the outcome of treatment depends on the effort exerted by the treating specialist, then a market failure might occur. By aggregating many patients, general practitioners can sometimes create an artificial long run relationship between a patient and a specialist that otherwise would have a shortrun relationship. Such an artificial longrun relationship reduces the incidence of shirking on the part of the specialist. 
Keywords:  Gatekeepers, Reputation, Moral Hazard, Referral 
JEL:  C73 D82 I11 
Date:  2013 
URL:  http://d.repec.org/n?u=RePEc:trb:wpaper:2013.01&r=gth 