|
on Game Theory |
|
Issue of 2013‒11‒14
eight papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University |
| By: | Jean-François Caulier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michel Grabisch (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); Agnieszka Rusinowska (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: | Most allocation rules for network games presented in the literature assume that the network structure is fixed. We put explicit emphasis on the construction of networks and examine the dynamic formation of networks whose evolution across time periods is stochastic. Time-series of networks are studied that describe processes of network formation where links may appear or disappear at any period. Moreover, convergence to an efficient network is not necessarily prescribed. Transitions from one network to another are random and yield a Markov chain. We propose the link-based allocation rule for such dynamic random network formation processes and provide its axiomatic characterization. By considering a monotone game and a particular (natural) network formation process we recover the link-based flexible network allocation rule of Jackson. |
| Keywords: | Dynamic networks; network game; link-based allocation rule; Markov chain; characterization |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00881125&r=gth |
| By: | Stéphane Gonzalez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michel Grabisch (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: | The paper proposes a new concept of solution for TU games, called multicoalitional solution, which makes sense in the context of production games, that is, where v(S) is the production or income per unit of time. By contrast to classical solutions where elements of the solution are payoff vectors, multicoalitional solutions give in addition an allocation time to each coalition, which permits to realize the payoff vector. We give two instances of such solutions, called the d-multicoalitional core and the c-multicoalitional core, and both arise as the strong Nash equilibrium of two games, where in the first utility per active unit of time is maximized, while in the second it is the utility per total unit of time. We show that the d-core (or aspiration core) of Benett, and the c-core of Guesnerie and Oddou are strongly related to the d-multicoalitional and c-multicoalitional cores, respectively, and that the latter ones can be seen as an implementation of the former ones in a noncooperative framework. |
| Keywords: | Cooperative game; core; aspiration core; strong Nash equilibrium |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00881108&r=gth |
| By: | Matias Iaryczower; Santiago Oliveros |
| Abstract: | We consider a model of decentralized bargaining among three parties. Parties meet one-on-one after being randomly matched, and can sell or buy votes to one another. The party with a majority of the votes can decide to implement its preferred policy or extend negotiations to capture additional rents. We provide necessary and suffcient conditions for the existence of an equilibrium in which a party acts as an intermediary, transferring resources and voting rights among parties that wouldn't negotiate directly with one another. These conditions are generic, do not require special frictions, and include `well-behaved' (i.e., single-peaked) preference profiles. |
| Date: | 2013–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:731&r=gth |
| By: | Pidong Huang (Korea University); Yoske Igarashi (Department of Economics, University of Exeter) |
| Abstract: | This paper investigates a Trejos-Wright random matching model of money with a consumer take-it-or-leave-it offer and with individual money holdings in the set {0, 1, 2}. It is shown that three kinds of monetary steady state exist generically: (1) pure-strategy full-support steady states, (2) mixed-strategy full-support steady states, and (3) non-full-support steady states. A full-support steady state exists if and only if a non-full-support steady state exists. Stability of these steady states is also studied. Both pure-strategy and mixedstrategy full-support steady states are locally stable. However, non-full-support steady states are unstable. |
| Keywords: | random matching model; monetary steady state; local stability; determinacy; instability; Zhu (2003). |
| JEL: | C62 C78 E40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:1311&r=gth |
| By: | Pidong Huang (Korea University); Yoske Igarashi (Department of Economics, University of Exeter) |
| Abstract: | We study the stability of monetary steady states in a random matching model of money where money is indivisible, the bound on individual money holding is finite, and the trading protocol is buyer take-it-or-leave-it offers. The class of steady states we study have a non-full-support money-holding distribution and are constructed from the steady states of Zhu (2003). We show that no equilibrium path converges to those steady states if the initial distribution has a different support. |
| Keywords: | random matching model; monetary steady state; instability; Zhu (2003). |
| JEL: | C62 C78 E40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:1310&r=gth |
| By: | Jens Leth Hougaard (Department of Food and Resource Economics, University of Copenhagen); Kurt Nielsen (Department of Food and Resource Economics, University of Copenhagen); Athanasios Papakonstantinou (Department of Food and Resource Economics, University of Copenhagen) |
| Abstract: | We analyze a simple multi-attribute procurement auction that uses yardstick competition to settle prices. Upon receiving the submitted bids, a mediator computes the yardstick prices (bids) by a linear weighting of the other participants’ bids. The auction simplifies the procurement process by reducing the principal’s articulation of his preferences to simply choosing the most preferred offer as if it was a market with posted prices. Although truthful reporting does not constitute a Nash equilibrium, we demonstrate by simulations that truth-telling may indeed be some kind of focal point. By focusing on the initial winner in case everyone tells the truth, we show that even if the other bidders are allowed to misreport by as much as 20% of their true cost, the initial winner remains the winner in 80% of all simulated auctions in the case of 3 competing bidders. Furthermore, as it takes aggressive bidding to become the new winner of the auction, we show that the new winners typically win with a loss. Combining the two results we have that, almost independently of the number of competing bidders and the degree of misreporting, approximately 90% of all simulations will either have the same initial winner or a new winner who wins the auction with a loss in its utility. |
| Keywords: | Multi-attribute auction, yardstick competition, articulation of preferences, simulation |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:foi:msapwp:02_2013&r=gth |
| By: | Heuson, Clemens; Peters, Wolfgang; Schwarze, Reimund; Topp, Anna-Katharina |
| Abstract: | It is well established that adaptation and technological investment in each case may serve as a commitment device in international climate politics. This paper for the first time analyzes the combined impact of these two strategic variables on global mitigation within a noncooperative framework where countries either decide on mitigation before or after adaptation. By investment, which is assumed to be made in the first place due to its considerable lead time, countries commit to lower national contributions to the global public good of mitigation. We find that the sequencing of adaptation before mitigation reinforces this strategic effect of technological investments at least for sufficiently similar countries. As a consequence, the subgame-perfect equilibrium yields a globally lower level of mitigation and higher global costs of climate change when adaptation is decided before mitigation. Besides this theoretical contribution, the paper proposes some strategies to combat the unfortunate rush to adaptation which can be currently observed in climate politics. -- |
| Keywords: | adaptation,climate policy,investment,mitigation,non-cooperative behavior |
| JEL: | Q54 H41 H87 C72 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:132013&r=gth |
| By: | Ted Theodosopoulos |
| Abstract: | This essay discusses the advantages of a probabilistic agent-based approach to questions in theoretical economics, from the nature of economic agents, to the nature of the equilibria supported by their interactions. One idea we propose is that "agents" are meta-individual, hierarchically structured objects, that include as irreducible components groupings of different dimensions. We also explore the effects of non-ergodicity, by constructing a simple stochastic model for the contingent nature of economic interactions. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1311.0414&r=gth |