on Game Theory
 Issue of 2014‒03‒01 sixteen papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University

1.  By: Tamas Solymosi (Momentum' Game Theory Research Group, Institute of Economics, Research Center for Economic and Regional Studies, Hungarian Academy of Sciences) Abstract: Permutation games are totally balanced transferable utility cooperative games arising from certain sequencing and re-assignment optimization problems. It is known that for permutation games the bargaining set and the core coincide, consequently, the kernel is a subset of the core. We prove that for permutation games the kernel is contained in the least core, even if the latter is a lower dimensional subset of the core. By means of a 5-player permutation game we demonstrate that, in sense of the lexicographic center procedure leading to the nucleolus, this inclusion result can not be strengthened. Our 5-player permutation game is also an example (of minimum size) for a game with a non-convex kernel. Keywords: permutation game, least core, kernel JEL: C71 Date: 2014–01 URL: http://d.repec.org/n?u=RePEc:has:discpr:1402&r=gth
2.  By: Flavio Pressacco (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy); Giacomo Plazzotta (Department of Mathematics - Imperial College London - Imperial College London); Laura Ziani (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy) Abstract: Parsimonious games are a subset of constant sum homogeneous weighted majority games unequivocally described by their free type representation vector. We show that the minimal winning quota of parsimonious games satisfies a second order, linear, homogeneous, finite difference equation with nonconstant coefficients except for uniform games. We provide the solution of such an equation which may be thought as the generalized version of the polynomial expansion of a proper k-Fibonacci sequence. In addition we show that the minimal winning quota is a symmetric function of the representation vector; exploiting this property it is straightforward to prove that twin Parsimonious games, i.e. a couple of games whose free type representations are each other symmetric, share the same minimal winning quota. Keywords: Homogeneous weighted majority games; parsimonious games; minimal winning quota; k-Fibonacci sequence; Fibonacci polynomials. Date: 2014–02–20 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00950090&r=gth
3.  By: Sylvain Béal (CRESE, Université de Franche-Comté); Marc Deschamps (Université de Nice Sophia-Antipolis, GREDEG (CNRS UMR 7321) and BETA (CNRS 7522)) Abstract: Article 30 of Regulation (EC) No 1907/2006 concerns the sharing of data between users of a chemical substance. We study this bargaining problem by means of a special class of games in coalitional form called data games (Dehez and Tellone, 2013). For such problems, compensation schemes specify how the data owners should be compensated by the agents in needs of data. On the class of data games, the Core, the Nucleolus and the Shapley value provide relevant compensation schemes. We provide three comparable axiomatic characterizations of the set of all (additive) compensation schemes belonging to the Core, of the Nucleolus and of the Shapley value. The axioms reflects principles of various theories of justice. Keywords: REACH, Data sharing problem, Core, Nucleolus, Shapley value, Pooling, Compensation, Reasonableness, Invariance to deleting non-exclusive data, Equal treatment of Equals, Invariance to enlarging the owner set, Equal concessions JEL: C71 D71 K32 L65 Date: 2014–02 URL: http://d.repec.org/n?u=RePEc:crb:wpaper:2014-01&r=gth
4.  By: Flavio Pressacco (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy); Giacomo Plazzotta (Department of Mathematics - Imperial College London - Imperial College London); Laura Ziani (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy) Abstract: We discuss the prominent role played by bilateral symmetry and modified Pascal triangles in self twin games, a subset of constant sum homogeneous weighted majority games. We show that bilateral symmetry of the free representations unequivocally identifies and characterizes this class of games and that modified Pascal triangles describe their cardinality for combinations of m and k, respectively linked through linear transforms to the key parameters n, number of players and h, number of types in the game. Besides, we derive the whole set of self twin games in the form of a genealogical tree obtained through a simple constructive procedure in which each game of a generation, corresponding to a given value of m, is able to give birth to one child or two children (depending on the parity of m), self twin games of the next generation. The breeding rules are, given the parity of m, invariant through generations and quite simple. Keywords: homogeneous weighted majority games; bilateral symmetry; modified Pascal triangles; games representations. Date: 2014–02–20 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00948123&r=gth
5.  By: Flavio Pressacco (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy); Giacomo Plazzotta (Department of Mathematics - Imperial College London - Imperial College London); Laura Ziani (DIES - DIES - Dept. of Economics and Statistics - University of Udine, Italy) Abstract: In a vintage paper concerning Parsimonious games, a subset of constant sum homogeneous weighted majority games, Isbell introduced a twin relationship based on transposition properties of the incidence matrices upon minimal winning coalitions of such games. A careful investigation of such properties allowed the discovery of some results on twin games presented in this paper. In detail we show that a) twin games have the same minimal winning quota and b) each Parsimonious game admits a unique balanced lottery on minimal winning coalitions, whose probabilities are given by the individual weights of its twin game. Keywords: Homogeneous weighted majority games; incidence matrices; twin relationships; minimal winning quota; balanced lottery. Date: 2014–02–20 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00950076&r=gth
6.  By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences) Abstract: Lab-in-the-field Hawk-Dove game experiments were played by spouses in a rural sample of households in Southern Ethiopia where women/wives traditionally have a weak position. Randomized treatments included a 3x3 design with simultaneous, one-way signaling and sequential games as the first dimension and Pareto-efficient, Pareto-inferior and Pareto-superior (Dove;Dove) payout treatments as the second dimension, with a sequence of six game rounds per household. The experiments allow for the assessment of the presence of alternative player types, such as players that prioritize household income maximization, players that prioritize personal income, players that are Hawkish and punish their spouse at their own expense, and cooperative reciprocators (Doves) who cooperate even at the expense of household and personal income. The experiments revealed that all player types were present in the sample. Husbands played significantly less Hawkish than their wives and played gradually less Hawkish over the six game rounds, whereas wives remained Hawkish. Keywords: Intra-household cooperation; Hawk-Dove game; Pareto-efficiency; simultaneous games; one-way signaling games; sequential games JEL: C71 C72 C93 H31 J16 Q15 Date: 2014–02–25 URL: http://d.repec.org/n?u=RePEc:hhs:nlsclt:2014_003&r=gth
7.  By: Ahmet Ozkardas (Turgut Özal Üniversitesi et Centre d'Economie de la Sorbonne); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics) Abstract: We provide an equilibrium analysis of a wage bargaining model between a union and a firm in which the union must choose between strike and holdout in case of a disagreement. While in the literature it is assumed that the parties of wage bargaining have constant discount factors, in our model preferences of the union and the firm are expressed by sequences of discount rates varying in time. First, we describe necessary conditions under arbitrary sequences of discount rates for the supremum of the union's payoffs and the infimum of the firm's payoffs under subgame perfect equilibrium in all periods when the given party makes an offer. Then, we determine the equilibrium payoffs for particular cases of sequences of discount rates varying in time. Besides deriving the exact bounds of equilibrium payoffs, we also characterize the equilibrium strategy profiles that support these extreme payoffs. Keywords: Union, firm bargaining, varying discount rates, subgame perfect equilibrium, equilibrium payoffs. JEL: J52 C78 Date: 2014–02 URL: http://d.repec.org/n?u=RePEc:mse:cesdoc:14011&r=gth
8.  By: Flip Klijn; Joana Pais; Marc Vorsatz Abstract: Minority reserves are an affirmative action policy proposed by Hafalir (2013) in the context of school choice. We study in the laboratory the effect of minority reserves on the outcomes of two prominent matching mechanisms, the Gale-Shapley and the Top Trading Cycles mechanisms. Our first experimental result is that the introduction of minority reserves enhances truth-telling of some minority students under the Gale-Shapley but not under the Top Trading Cycles mechanism. Secondly, for the Gale-Shapley mechanism we also find that the stable matchings that are more beneficial to students are obtained more often relative to the other stable matchings when minority reserves are introduced. Finally, the overall expected payoff increases under the Gale-Shapley but decreases under the Top Trading Cycles mechanism if minority reserves are introduced. However, the minority group benefits and the majority group is harmed under both mechanisms. Keywords: sequencing situations, outsourcing, first best solution, game theory, price of anarchy, coordinating mechanism JEL: C78 C91 C92 D78 I20 Date: 2014–02 URL: http://d.repec.org/n?u=RePEc:bge:wpaper:752&r=gth
9.  By: Pablo Branas-Garza (Business School, Middlesex University London); Antonio M. Espin (GLOBE,Universidad de Granada; Departamento de Teoría e Historia Económica, Universidad de Granada); Benedikt Herrmann (Behavioural Economics Team, Institute for Health and Consumer Protection, Joint Research Centre, European Commission) Abstract: Fairness norms are crucial in understanding the emergence and enforcement of large-scale cooperation in human societies. The most widely applied framework in the study of human fairness is the Ultimatum Game (UG). In the UG, a proposer suggests how to split a sum of money with a responder. If the responder rejects the proposer’s offer, both players get nothing. Rejection of unfair offers is considered to be a form of punishment implemented by fair-minded individuals, who are willing to sacrifice their own resources in order to impose the fairness norm. However, an alternative interpretation is equally plausible: punishers might actually be using rejections in a competitive, spiteful fashion as a means to increase their relative standing. This hypothesis is in line with recent evidence demonstrating that “prosocial” and “antisocial” punishers coexist in other experimental games. Using two large-scale experiments, we explore the nature of UG punishers by analyzing their behavior in a Dictator Game. In both studies, we confirm the coexistence of two entirely different sub-populations: prosocial punishers, who behave fairly as dictators, and spiteful (antisocial) punishers, who are totally unfair. Such a result is fundamental for research on the foundations of punishment behavior employing the UG. We discuss how focusing only on the fairness-oriented part of human behavior might give rise to misleading conclusions regarding the evolution of cooperation and the behavioral underpinnings of stable social systems. Date: 2014–01 URL: http://d.repec.org/n?u=RePEc:beb:wpaper:201402&r=gth
10.  By: Kaustav Das (Department of Economics, University of Exeter) Abstract: This paper considers a two-armed bandit problem with one safe arm and one risky arm. The risky arm if good, can potentially experience two kinds of arrivals. One is publicly observable and the other is private to the agent who experiences it. The safe arm experiences publicly observable arrivals according to a given intensity. Private arrivals yield no payoff. Only the first publicly observed arrival(in any of the arms) yields a payo of 1 unit. Players start with a common prior about the quality of the risky arm. It has been shown that in a particular kind symmetric equilibrium, conditional on no arrival players tend to experiment too much along the risky arm if they start with too high a prior and experiment too less if they start with a low prior. Keywords: Two-armed Bandit, R&D competition, Duplication, Learning. JEL: C73 D83 O31 Date: 2014 URL: http://d.repec.org/n?u=RePEc:exe:wpaper:1404&r=gth
11.  By: Anya Savikhin Samek (School of Human Ecology, University of Wisconsin-Madison); Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and the Economic Science Institute, Chapman University,) Abstract: Studies show that identifying contributors significantly increases contributions to public goods. In practice, however, viewing identifiable information is costly, which may discourage people from accessing such information. To address this question, we design a public goods experiment in which participants can pay a fee to view information about identities and corresponding contributions of their group members. We then compare this to a treatment in which there is no identifiable information, and a treatment in which all contributors are freely identified. Our main findings are that: (1) contributions in the treatment with costly information are as high as those in the treatment with free information, (2) participants choose to view the information about 10% of the time, and (3) being a high contributor is positively correlated with choosing to view identifiable information about others. Thus, it seems that having access to information is important even when such information is rarely viewed. Or findings have practical implications for non-profit organizations with a large pool of donors and for designers of recognition systems, especially in online communities with many participants. Keywords: public-goods, information, experiments JEL: C72 C91 H41 Date: 2014 URL: http://d.repec.org/n?u=RePEc:chu:wpaper:14-04&r=gth
12.  By: R. Pablo Arribillaga; Jordi Massó Abstract: We propose a simple criterion to compare generalized median voter schemes according to their manipulability. We identify three nec- essary and sufficient conditions for the comparability of two generalized median voter schemes in terms of their vulnerability to manipulation. The three conditions are stated using the two associated families of monotonic fixed ballots and depend very much on the power each agent has to unilat- erally change the outcomes of the two generalized median voter schemes. We perform a specific analysis of all median voter schemes, the anonymous subfamily of generalized median voter schemes. Keywords: : Generalized Median Voting Schemes; Strategy-proofness; Anonymity. JEL: C78 D78 Date: 2014–02–17 URL: http://d.repec.org/n?u=RePEc:aub:autbar:946.14&r=gth
13.  By: Dong, Baomin; Fu, Shihe; Gong, Jiong; Fan, Hanwen Abstract: This paper develops a signaling theory where brain drain as well as the opposite of brain drain, a phenomenon we call “lame-drain” can result. In particular, we assume there are three types of agents according to their intrinsic abilities; education (with endogenous intensity) consists of two stages: undergraduate and graduate. There are two types of jobs: entry level and managerial. It is shown that under some circumstances the equilibrium is semi-pooling where the medium type chooses to work after undergraduate education while (a fraction of) both high and low types pursue graduate studies at home and abroad. Some high and low ability students return to work in the indigenous country in equilibrium. However, our model differs from the traditional brain drain models in that some low ability agents also go abroad in equilibrium and work in the host country after graduation, resulting in the recipient country hiring low ability agents, a phenomenon we call lame-drain. We then provide empirical evidence that lame-drain is indeed happening using U.S. Census data. Keywords: Brain Drain; Lame Drain; Signalling JEL: C72 F22 J61 Date: 2014–02–14 URL: http://d.repec.org/n?u=RePEc:pra:mprapa:53825&r=gth
14.  By: Michele Gori (Dipartimento di Scienze per l'Economia e l'Impresa, Universita' degli Studi di Firenze); Daniela Bubboloni (Dipartimento di Scienze per l'Economia e l'Impresa, Universita' degli Studi di Firenze) Abstract: In the standard arrovian framework and under the assumption that individual preferences and social outcomes are linear orders on the set of alternatives, we study the rules which satisfy suitable symmetries and obey the majority principle. In particular, supposing that individuals and alternatives are exogenously partitioned into subcommittees and subclasses, we provide necessary and sucient conditions for the existence of reversal symmetric majority rules that are anonymous and neutral with respect to the considered partitions. We also determine a general method for constructing and counting those rules and we explicitly apply it to some simple cases. Keywords: social welfare function, anonymity, neutrality, reversal symmetry, majority, group theory. JEL: D71 Date: 2014–02 URL: http://d.repec.org/n?u=RePEc:flo:wpaper:2014-02&r=gth
15.  By: Kazumi Hori (College of Economics, Ritsumeikan University) Abstract: This paper investigates how a buyer and a seller exchanging two goods should write the contract, where the seller makes sequences of unobservable relation-specific investments and the buyer privately learns valuations for goods which are stochastically influenced by the investments and these two types of asymmetric information cause inefficiency in trading. Three types of contract structures are possible. In a dynamic contract, the goods are traded sequentially and the order for the second good can be canceled to restore efficiency for the first good. In separate contracts, two goods are treated independently, whereas the two goods are bundled as a single good in bundled contracts. It will be shown that the dynamic contract is suboptimal and that the second-best contract is either a separate or a bundle contract, depending on the costs of investments. Keywords: bilateral trading, cooperative investment, dynamic contract, hidden action, hidden information. JEL: C72 D23 D82 D86 Date: 2014–02 URL: http://d.repec.org/n?u=RePEc:kyo:wpaper:888&r=gth
16.  By: Cyrille Piatecki (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans) Abstract: Depuis la contribution de Becker (1964), l'accumulation de capital humain n'a été développée que dans le cadre des choix individuels fondés sur les attentes salariales. Pour plus de quarante ans, cette approche s'est montrée fructueuse. Cependant, avec la raréfaction des emplois en période de crise, elle semble incapable d'expliquer la plupart des décisions concernant l'accumulation de capital humain. En effet, parce que personne ne peut être sûr d'obtenir un emploi qui donnera un rendement positif à son niveau d'études, la décision d'acquérir la formation continue ne peut être appréhendée comme une décision stratégique prise dans une situation d'information imparfaite. Cette décision individuelle dépendra de la réponse à la question simple suivante: avec le niveau d'études que j'ai l'intention d'acquérir, vais-je avoir de plus grandes chances d'obtenir un emploi que mes camarades de classe qui ont arrêté leurs études à un niveau inférieur? Keywords: Economie du travail, jeux évolutionnaires, interactions stratégiques Date: 2014–02–03 URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00945790&r=gth

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