nep-gth New Economics Papers
on Game Theory
Issue of 2013‒05‒11
sixteen papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. On pure strategy equilibria in large generalized games By Riascos Villegas, Alvaro; Torres-Martínez, Juan Pablo
  2. Sorting via Screening versus Signaling: A Theoretic and Experimental Comparison By Werner Güth; Fabian Winter
  3. Simultaneous Decision-Making in Competitive and Cooperative Environments By Savikhin , Anya; Sheremeta , Roman
  4. Characterizations of the cycle-complete and folk solutions for minimum cost spanning tree problems By Christian Trudeau
  5. Fairness norms can explain the emergence of specific cooperation norms in the Battle of the Prisoners Dilemma By Fabian Winter
  6. Side-Payments and the Costs of Conflict By Kimbrough , Erik; Sheremeta , Roman
  7. Cooperation in the Presence of an Advantaged Outsider By Cheikbossian, Guillaume; Mahenc, Philippe
  8. Who Should Pay the Sports Agent’s Commission? An Economic Analysis of Setting the Legal Rules in the Regulation of Matchmakers By Brocard, Jean-François; Cavagnac, Michel
  9. Analysis of different cost allocation methods in a collaborative transport setting By Vanovermeire Ch.; Vercruysse D.; Sörensen K.
  10. Majority rule in the absence of a majority By Nehring, Klaus; Pivato, Marcus
  11. Guidelines for cooperative legislation By Henrÿ, Hagen
  12. A degree-distance-based connections model with negative and positive externalities. By Philipp Möhlmeier; Agnieszka Rusinowska; Emily Tanimura
  13. Quelques éléments de calcul des équilibres de Nash By Annie Hofstetter; Mathieu Désolé; Mabel Tidball
  14. Equilibrium Theory under Ambiguity By Wei He; Nicholas C. Yannelis
  15. Visibility of Contributors and Cost of Information: An Experiment on Public Goods By Samak , Anya; Sheremeta , Roman
  16. The Cost of Segregation in Social Networks By Nizar Allouch

  1. By: Riascos Villegas, Alvaro; Torres-Martínez, Juan Pablo
    Abstract: We consider a game with a continuum of players where at most a finite number of them are atomic. Objective functions are continuous and admissible strategies may depend on the actions chosen by atomic players and on aggregate information about the actions chosen by non-atomic players. When atomic players have convex sets of admissible strategies and quasi-concave objective functions, a pure strategy Nash equilibria always exists.
    Keywords: Generalized games; Non-convexities; Pure-strategy Nash equilibrium
    JEL: C72 C62
    Date: 2013–03
  2. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Fabian Winter (Max Planck Institute of Economics, Strategic Interaction Group)
    Abstract: Similar to Kübler et al. (2008, GEB 64, p. 219-236), we compare sorting in games with asymmetric incomplete information theoretically and experimentally. Rather than distinguishing two very different sequential games, we use the same game format and capture the structural difference of screening and signaling only via their payoff specification. The experiment thus relies on the same verbal instructions. Although the equilibrium outcomes coincide, greater efficiency losses off the equilibrium play due to sorting under signaling, compared to screening, is predicted and confirmed experimentally.
    Keywords: sorting, screening, signaling, wage bargaining, off-equilibrium play
    JEL: C9 D82 J24 J40
    Date: 2013–04–24
  3. By: Savikhin , Anya; Sheremeta , Roman
    Abstract: We experimentally investigate simultaneous decision-making in two contrasting environments: one that encourages competition (lottery contest) and one that encourages cooperation (public good game). We find that simultaneous participation in the public good game affects behavior in the contest, decreasing sub-optimal overbidding. Contributions to the public good are not affected by participation in the contest. The direction of behavioral spillover is explained by differences in strategic uncertainty and path-dependence across games. Our design allows us to compare preferences for cooperation and competition. We find that in early periods, there is a negative correlation between decisions in competitive and in cooperative environments.
    Keywords: cooperation, competition, public goods, contests, experiments, behavioral spillover
    JEL: C72 C91
    Date: 2012–03–05
  4. By: Christian Trudeau (Department of Economics, University of Windsor)
    Abstract: Minimum cost spanning tree problems connect agents efficiently to a source when agents are located at different points and the cost of using an edge is fixed. The folk and cycle-complete cost sharing solutions always offer core allocations. We provide similar characterizations for both. A new property is based on the following observation: when all agents have the same cost to connect to the source, we can connect one of them to the source then connect all other agents to him, as if he was the source. Cost sharing should also be done in these two steps. We also use some common properties: Core Selection, Piecewise Linearity and an independence property. The solutions are differentiated by properties that apply when the cheapest edge to the source gets cheaper. Either the savings are equally distributed among all agents (folk) or the agent on that edge gets all of the savings (cycle-complete).
    Keywords: Minimum cost spanning tree problems; folk solution; cycle-complete solution; core.
    JEL: C71 D63
    Date: 2013–05
  5. By: Fabian Winter (Max Planck Institute of Economics, Jena)
    Abstract: Cooperation norms often emerge in situations, where the long term collective benefits help to overcome short run individual interests, for instance in repeated Prisoner's Dilemma (PD) situations. Often, however, there are different paths to cooperation, benefiting different kinds of actors to different degrees. This leads to payoff asymmetries even in the state of cooperation, and consequently can give rise to normative conflicts about which norms should be in place. This norm-coordination problem will be modeled as a Battle of the Sexes game (BoS) with different degrees of asymmetry in payoffs. We combine the PD and the BoS to the 3×3 Battle of the Prisoners Dilemma (BOPD) with several asymmetric cooperative and one non-cooperative equilibria. Bame theoretical and "behavioral" predictions are derived about the kind of norms that are likely to emerge under different shadows of the future and degrees of asymmetry and tested in a lab-experiment. Our experimental data show that game theory fairly well predicts the basic main effects of our experimental manipulations, but "behavioral" predictions perform better in describing the equilibrium selection process of emerging norms.
    Keywords: Social norms, normative conflict, Prisoner's Dilemma, coordination, experiment
    JEL: Z13 C92 C72 D31
    Date: 2013–04–24
  6. By: Kimbrough , Erik; Sheremeta , Roman
    Abstract: Conflict and competition often impose costs on both winners and losers, and conflicting parties may prefer to resolve the dispute before it occurs. The equilibrium of a conflict game with side-payments predicts that with binding offers, proposers make and responders accept side-payments, generating settlements that strongly favor proposers. When side-payments are non-binding, proposers offer nothing and conflicts always arise. Laboratory experiments confirm that binding side-payments reduce conflicts. However, 30% of responders reject binding offers, and offers are more egalitarian than predicted. Surprisingly, non-binding side-payments also improve efficiency, although less than binding. With binding side-payments, 87% of efficiency gains come from avoided conflicts. However, with non-binding side-payments, only 39% of gains come from avoided conflicts and 61% from reduced conflict expenditures.
    Keywords: contests, conflict resolution, side-payments, experiments
    JEL: C72 C91 D72
    Date: 2013–02–03
  7. By: Cheikbossian, Guillaume (University of Montpellier, TSE); Mahenc, Philippe (University of Montpellier)
    Abstract: This paper analyzes how the stability of the tacit cooperation within a fringe of sev- eral identical ?rms is a¤ected by the presence of a more e¢ cient ?rm which does not take part in their cooperative agreement. The model assumes that the ?rms of the fringe adopt ?stick and carrot?strategies à la Abreu (1986, 1988) to support cooperation, while the outside ?rm plays its one-period best response function to these strategies, regardless of the history of play. Assuming a linear demand function and constant marginal costs, we then obtain conditions for the coopera- tion within the fringe to be sustainable and focus on the most cooperative symmetric punishment (MCSP) that sustains cooperation. We show that the MCSP is harsher when the number of ?rms involved in the agreement is relatively large or when their relative cost disadvantage is relatively small. However, both a larger number of ?rms and a larger cost disadvantage make it more di¢ cult to sustain the cooperation.
    Keywords: Repeated Game; Tacit Collusion; Optimal Punishments; Cost Asymmetry, Outsider
    JEL: C73 D43 L13
    Date: 2012–08
  8. By: Brocard, Jean-François (CDES); Cavagnac, Michel (University of Limoges, TSE)
    Abstract: We study the effects of completing the legal framework of matchmakers with a rule designating which party must pay the commission. The paper examines the two rules currently open to debate at the international level in sport: the "player-pays" principle and the "club-pays" principle. We find that the most appropriate measure entails designating the party with the lesser bargaining power to pay the intermediary’s fee. However, our main result indicates that the appropriateness of imposing an additional rule in the legal framework is a preliminary issue. Indeed, even if the best rule is chosen, welfare may be decreased by this legal initiative.
    JEL: C78 D83 K23
    Date: 2012–07
  9. By: Vanovermeire Ch.; Vercruysse D.; Sörensen K.
    Abstract: In collaborative transport, dividing the total cost of the coalition between its different partners is a key issue. However, as each coalition has its own set of preferences and has partners with different characteristics, a cost allocation method suitable in all situations does not exist. In this paper, a set of cost allocation methods, some academic, some used in practice, are evaluated in different situations. We investigate how well these methods behave when partners have different characteristics. E.g., when one partner ships a much larger volume than the others, it is very likely that this partner does not agree to allocate costs according to the volume of each partner. We show which cost allocation methods suce in which situations, showing that a right cost allocation is highly dependent on the characteristics of the coalition.
    Date: 2013–04
  10. By: Nehring, Klaus; Pivato, Marcus
    Abstract: What is the meaning of "majoritarianism" as a principle of democratic group decision-making in a judgement aggregation problem, when the propositionwise majority view is logically inconsistent? We argue that the majoritarian ideal is best embodied by the principle of "supermajority efficiency" (SME). SME reflects the idea that smaller supermajorities must yield to larger supermajorities. We show that in a well-demarcated class of judgement spaces, the SME outcome is generically unique. But in most spaces, it is not unique; we must make trade-offs between the different supermajorities. We axiomatically characterize the class of "additive majority rules", which specify how such trade-offs are made. This requires, in general, a hyperreal-valued representation.
    Keywords: judgement aggregation; majority rule; majoritarian; hyperreal; Condorcet
    JEL: D71
    Date: 2013–05–02
  11. By: Henrÿ, Hagen
    Keywords: cooperative legislation, cooperative, législation coopérative, coopérative, legislación cooperativa, cooperativa
    Date: 2012
  12. By: Philipp Möhlmeier (Bielefeld University - BiGSEM, Center for Mathematical Economics); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics); Emily Tanimura (Centre d'Economie de la Sorbonne)
    Abstract: We develop a modification of the connections model by Jackson and Wolinsky (1996) that takes into account negative externalities arising from the connectivity of direct and indirect neighbors, thus combining aspects of the connections model and the co-author model. We consider a general functional form for agents' utility that incorporates both the effects of distance and of neighbors' degree. Consequently, we introduce a framework that can be seen as a degree-distance-based connections model with both negative and positive externalities. Our analysis shows how the introduction of negative externalities modifies certain results about stability and efficiency compared to the original connections model. In particular, we see the emergence of new stable structures, such as a star with links between peripheral nodes. We also identify structures, for example, certain disconnected networks, that are efficient in our model but which could not be efficient in the original connections model. While our results are proved for the general utility function, some of them are illustrated by using a specific functional form of the degree-distance-based utility.
    Keywords: Connections model, degree, distance, negative externalities, positive externalities, pairwise stability, efficiency.
    JEL: D85 C70
    Date: 2013–04
  13. By: Annie Hofstetter; Mathieu Désolé; Mabel Tidball
    Abstract: Le calcul des équilibres de Nash est évident pour les chercheurs en économie mais [...]
    Date: 2013–04
  14. By: Wei He; Nicholas C. Yannelis
    Date: 2013
  15. By: Samak , Anya; Sheremeta , Roman
    Abstract: We experimentally investigate the impact of visibility of contributors and cost of information on public good contributions. First, we vary recognizing all, highest or lowest contributors. Second, we investigate the effect of imposing a cost on viewing contributors. Recognizing all contributors significantly increases contributions relative to the baseline, even when viewing contributors’ information is costly. This effect holds even though the identities of contributors are viewed less than ten percent of the time. Recognizing only highest contributors does not increase contributions compared to not recognizing contributors, but recognizing only lowest contributors is as effective as recognizing all contributors. These findings support our conjecture that aversion from shame is a more powerful motivator for giving than anticipation of prestige.
    Keywords: public-goods, information, experiments
    JEL: C72 C90 H41
    Date: 2013–05–06
  16. By: Nizar Allouch (Queen Mary, University of London)
    Abstract: This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an "asymptotic neutrality" of redistributive policies.
    Keywords: Public goods, Segregated society, Private provision, Networks, Bonacich transfer index
    JEL: C72 D31 H41
    Date: 2013–05

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