nep-gth New Economics Papers
on Game Theory
Issue of 2014‒03‒22
seventeen papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Reputation in Repeated Moral Hazard Games By Atakan, Alp Enver; Ekmekci, Mehmet
  2. On the Core of Games with Communication Structures By Albizuri, M. Josune; Sudhölter, Peter
  3. Strategic Stability in Poisson Games By Francesco De Sinopoli; Claudia Meroni; Carlos Pimienta
  4. Constitutions and social networks By MAULEON, Ana; ROEHL, Nils; VANNETELBOSCH, Vincent
  5. Network characteristics enabling efficient coordination: A simulation study By Uyttendaele P.; Khan A.; Peeters R.J.A.P.; Thuijsman F.
  6. Allocating value among farsighted players in network formation By CARAYOL, Nicolas; DELILLE, Rémy; VANNETELBOSCH, Vincent
  7. Equilibria in secure strategies in the Tullock contest By ISKAKOV, Mikhail; ISKAKOV, Alexey; ZAKHAROV, Alexey
  8. Commuting for meetings By Fosgerau, Mogens; Engelson, Leonid; Franklin, Joel
  9. Legitimacy, Communication and Leadership in the Turnaround Game By Jordi Brandts; David J. Cooper; Roberto A. Weber
  10. Fair and unfair punishers coexist in the Ultimatum Game By Pablo Branas-Garza; Antonio M. Espin; Benedikt Herrmann
  11. Second-best incentive compatible allocation rules for multiple-type indivisible objects By Anno, Hidekazu; Kurino, Morimitsu
  12. Strategy-proof package assignment By Erlanson, Albin; Szwagrzak, Karol
  13. Other-regarding behavior under collective action By Katerina Sherstyuk; Nori Tarui; Melinda Podor Wengrin; Jay Viloria; Tatsuyoshi Saijo
  14. Strategy-proof market clearing mechanisms By Szwagrzak, Karol
  15. Assigning agents to a line By Jens L. Hougaard; Juan D. Moreno-Ternero; Lars P. Osterdal
  16. Dynamic Repeated Random Dictatorship and Gender Discrimination By Dittrich, Dennis Alexis Valin; Büchner, Susanne; Kulesz, Micaela Maria
  17. Agent-based modeling of knowledge transfer within social networks By Widad Guechtouli

  1. By: Atakan, Alp Enver; Ekmekci, Mehmet
    Abstract: We study an infinitely repeated game where two players with equal discount factors play a simultaneous-move stage game. Player one monitors the stage- game actions of player two imperfectly, while player two monitors the pure stage- game actions of player one perfectly. Player one’s type is private information and he may be a “commitment type,” drawn from a countable set of commitment types, who is locked into playing a particular strategy. Under a full-support assumption on the monitoring structure, we prove a reputation result for repeated moral hazard games: if there is positive probability that player one is a particular type whose commitment payoff is equal to player one’s highest payoff, consistent with the players’ individual rationality, then a patient player one secures this type’s commitment payoff in any Bayes-Nash equilibrium of the repeated game.
    Keywords: Repeated Games, Reputation, Equal Discount Factor, Long-run Players, Imperfect Monitoring, Complicated Types, Finite Automaton
    JEL: C7 C72 C73 D0
    Date: 2014–01–01
  2. By: Albizuri, M. Josune (Faculty of Economics and Business Administration); Sudhölter, Peter (Department of Business and Economics)
    Abstract: It is well-known that the core on several domains of cooperative transferable utility (TU) and nontransferable utility (NTU) games is characterized by various combinations of axioms containing some versions of the reduced game property, of its converse, or of the reconfirmation property with respect to the Davis-Maschler reduced game. We show that these characterizations are still valid for games with communication structures a la Myerson when using the notion of the reduced communication structure that establishes a new link between two inside players if they can communicate via outside players. Thus, it is shown that, if communication structures are present, the core may still be characterized on balanced TU games, on totally balanced TU games, on NTU games with a nonempty core, on the domains of all TU or NTU games, and on several other interesting domains of TU and NTU games. As a byproduct we construct, for any NTU game with communication structure, a certain classical NTU game with the same core that may be regarded as its Myerson restricted NTU game.
    Keywords: TU and NTU game; Solution; Communication structure; Core
    JEL: C71
    Date: 2014–03–10
  3. By: Francesco De Sinopoli (Department of Economics, University of Verona); Claudia Meroni (Department of Economics, University of Milano-Bicocca); Carlos Pimienta (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: In Poisson games, an extension of perfect equilibrium based on perturbations of the strategy space does not guarantee that players use admissible actions. This observation suggests that such a class of perturbations is not the correct one. We characterize the right space of perturbations to define perfect equilibrium in Poisson games. Furthermore, we use such a space to define the corresponding strategically stable sets of equilibria. We show that they satisfy existence, admissibility, and robustness against iterated deletion of dominated strategies and inferior replies.
    Keywords: Poisson games, voting, perfect equilibrium, strategic stability, stable sets
    JEL: C63 C70 C72
    Date: 2014–01
  4. By: MAULEON, Ana (CEREC, Saint Louis University; Université catholique de Louvain, CORE, Belgium); ROEHL, Nils (Department of Economics, University of Paderborn; BiGSEM, Bielefeld University, Germany); VANNETELBOSCH, Vincent (CEREC, Saint Louis University; Université catholique de Louvain, CORE, Belgium)
    Abstract: The objective of the paper is to analyze the formation of social networks where individuals are allowed to engage in several groups at the same time. These group structures are interpreted here as social networks. Each group is supposed to have specific rules or constitutions governing which members may join or leave it. Given these constitutions, we consider a social network to be stable if no group is modified any more. We provide requirements on constitutions and players’ preferences under which stable social networks are induced for sure. Furthermore, by embedding many-to-many matchings into our setting, we apply our model to job markets with labor unions. To some extent the unions may provide job guarantees and, therefore, have influence on the stability of the job market.
    Keywords: social networks, constitutions, stability, many-to-many matchings
    JEL: C72 C78 D85
    Date: 2014–02–12
  5. By: Uyttendaele P.; Khan A.; Peeters R.J.A.P.; Thuijsman F. (GSBE)
    Abstract: The primary question in coordination games concerns the possibility of achieving efficient coordination. We consider a situation where individuals from a finite population are randomly matched to play a coordination game. While this interaction is global in the sense that the co-player can be drawn from the entire population, individuals observe the strategies and payoffs of only the direct connections or neighbors in their social network. The most successful strategy used in the neighborhood is imitated. We study how the network structure in fluences the dynamic process of achieving efficient coordination. We simulate this coordination game for small-world and scale-free networks and find that segregation is an important factor in determining the possibility of efficient coordination. In addition, a classification tree analysis reveals segregation to be an important variable of the nonoccurrence of efficient coordination.
    Keywords: Stochastic and Dynamic Games; Evolutionary Games; Repeated Games;
    JEL: C73
    Date: 2014
  6. By: CARAYOL, Nicolas (GREThA, Université de Bordeaux IV, France); DELILLE, Rémy (GREThA, Université de Bordeaux IV, France); VANNETELBOSCH, Vincent (CEREC, Saint Louis University; Université catholique de Louvain, CORE, Belgium)
    Abstract: We propose a concept to study the stability of social and economic networks when players are farsighted and allocations are determined endogenously. A set of networks is a von Neumann-Morgenstern farsightedly stable set with bargaining if there exists an allocation rule and a bargaining threat such that (i) there is no farsighted improving path from one network inside the set to another network inside the set, (ii) from any network outside the set there is a farsighted improving path to some network inside the set, (iii) the value of each network is allocated among players so that players suffer or benefit equally from being linked to each other compared to the allocation they would obtain at their respective credible bargaining threat. We show that the set of strongly efficient networks is the unique von Neumann-Morgenstern farsightedly stable set with bargaining if the allocation rule is anonymous and component efficient and the value function is top convex. Moreover, the componentwise egalitarian allocation rule emerges endogenously.
    Keywords: farsighted players, stability, equal bargaining power
    JEL: A14 C70 D20
    Date: 2014–02–12
  7. By: ISKAKOV, Mikhail (V.A. Trapeznikov Institute of Control Sciences, Moscow); ISKAKOV, Alexey (V.A. Trapeznikov Institute of Control Sciences, Moscow); ZAKHAROV, Alexey (Higher School of Economics, Moscow)
    Abstract: It is well known that a pure-strategy Nash equilibrium does not exist for a two-player rent-seeking contest when the contest success function parameter is greater than two. We analyze the contest using the concept of equilibrium in secure strategies, which is a generalization of the Nash equilibrium. It is defined by two conditions: (i) no player can make a profitable deviation that decreases the payoff of another player and (ii), for any profitable deviation there is a subsequent deviation by another player, that is profitable for the second deviator and worse than the status quo for the first deviator. We show that such equilibrium always exists in the Tullock contest. Moreover, when the success function parameter is greater than two, this equilibrium is unique up to a permutation of players, and has a lower rent dissipation than in a mixed-strategy Nash equilibrium.
    Keywords: rent-seeking, Tullock contest, equilibrium in secure strategies, rent dissipation, non-cooperative games
    JEL: D72 D03 L12 C72
    Date: 2014–03–12
  8. By: Fosgerau, Mogens; Engelson, Leonid; Franklin, Joel
    Abstract: Urban congestion causes travel times to exhibit considerable variability, which leads to coordination problems when people have to meet. We analyze a game for the timing of a meeting between two players who must each complete a trip of random duration to reach the meeting, which does not begin until both are present. Players prefer to depart later and also to arrive sooner, provided they do not have to wait for the other player. We find a unique Nash equilibrium, and a continuum of Pareto optima that are strictly better than the Nash equilibrium for both players. Pareto optima may be implemented as Nash equilibria by penalty or compensation schemes.
    Keywords: congestion; random travel time variability; coordination game
    JEL: C7 D1 R4
    Date: 2014
  9. By: Jordi Brandts; David J. Cooper; Roberto A. Weber
    Abstract: We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all interventions yield shifts to more efficient equilibria, communication from leaders has a greater effect than incentives. Moreover, leaders who are elected by followers are significantly better at improving their group’s outcome than randomly selected ones. The improved effectiveness of elected leaders results from sending more performance-relevant messages. Our results are evidence that the way in which leaders are selected affects their legitimacy and the degree to which they influence followers. Finally, we observed that a combination of factors— incentive increases and elected leaders—yield near universal turnarounds to full efficiency.
    Keywords: leadership, job selection, coordination failure, experiments, communication
    JEL: C72 C92 D83
    Date: 2014–03
  10. 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
  11. By: Anno, Hidekazu; Kurino, Morimitsu
    Abstract: We consider the problem of allocating several types of indivisible goods when preferences are separable and monetary transfers are not allowed. Our finding is that the coordinatewise application of strategy-proof and non-wasteful rules yields a strategy-proof rule with the following efficiency property: no strategy-proof rule Pareto-dominates the rule. Such rules are abundant as they include the coordinate-wise use of the two well-known priority-based rules of the top trading cycles (TTC) and the deferred acceptance (DA). Moreover, our result supports the current practice in Market Design that separately treats each type of market for its design. --
    Keywords: strategy-proofness,second-best incentive compatibility,top trading cycles rules,deferred acceptance rules
    JEL: C78 D71
    Date: 2014
  12. By: Erlanson, Albin (Department of Economics); Szwagrzak, Karol (Department of Business and Economics)
    Abstract: We examine the strategy-proof allocation of multiple divisible and indivisible resources; an application is the assignment of packages of tasks, workloads, and compensations among the members of an organization. We find that any allocation mechanism obtained by maximizing a separably concave function over a polyhedral extension of the set of Pareto-efficient allocations is strategy-proof. Moreover, these are the only strategy-proof and unanimous mechanisms satisfying a coherence property and responding well to changes in the availability of resources. These mechanisms generalize the parametric rationing mechanisms (Young, 1987), some of which date back to the Babylonian Talmud.
    Keywords: Package assignment; Indivisible objects; Strategy-proofness
    JEL: D61 D63 D70
    Date: 2014–03–07
  13. By: Katerina Sherstyuk (Department of Economics, University of Hawaii at Manoa); Nori Tarui (Department of Economics, University of Hawaii at Manoa); Melinda Podor Wengrin (University of Hawaii at Manoa); Jay Viloria (California Institute of Technology); Tatsuyoshi Saijo (Kochi University of Technology)
    Abstract: In many collective action settings, such as decisions on public education or climate change mitigation, actions of a group have welfare consequences for themselves as well as their followers. We conduct laboratory experiments with two-stage predecessor-follower prisoners' dilemma and coordination games with dynamic externalities to study whether concerns for the followers' welfare affect the predecessors' behavior. We find that predecessors often give up own payoffs to avoid imposing negative externalities on the followers, but not to generate positive externalities for the followers. A concern for the followers aligned with own group payoff maximization motive helps to resolve socialdilemma and coordination problems; yet, a conffict in motives greatly exacerbates both free-riding and coordination on the payoff-inferior equilibrium. We also find strong evidence of social learning: the followers tend to blindly mimic their own predecessor, but act opposite to their match's predecessor, no matter whether these actions are welfare-improving or not.
    Keywords: economic experiments; other-regarding behavior; collective action
    JEL: C90 C73
    Date: 2014–03
  14. By: Szwagrzak, Karol (Department of Business and Economics)
    Abstract: Consider a market for a resource under disequilibrium prices where suppliers and demanders are privately informed about their optimal supply and consumption levels. Strategy-proof market clearing mechanisms give suppliers and demanders dominant strategy incentives to truthfully reveal this information. We describe the class of strategy-proof and efficient mechanisms responding well to changes in supplies and demands, as formalized by the "replacement principle" (Thomson, 2007). Since no symmetry or anonymity conditions are imposed, these mechanisms can implement a wide array of distributional objectives in both indivisible and divisible resource allocation situations. These mechanisms apply to allocation problems involving network constraints modeling necessary conditions for a transfer of the resource from a supplier to a demander.
    Keywords: Strategy-proofness; Replacement principle; Network constraints; Indivisible resourcces
    JEL: C70 D61 D63
    Date: 2014–03–06
  15. By: Jens L. Hougaard (Department of Food and Resource Economics, University of Copenhagen); Juan D. Moreno-Ternero (Department of Economics, Universidad Pablo de Olavide; CORE, Université catholique de Louvain); Lars P. Osterdal (Department of Business and Economics, University of Southern Denmark)
    Abstract: We consider the problem of assigning agents to slots on a line, where only one agent can be served at a slot and each agent prefers to be served as close as possible to his target. Our focus is on aggregate gap minimizing methods, i.e., those that minimize the total gap between targets and assigned slots. We first consider deterministic assignment of agents to slots, and provide a direct method for testing if a given deterministic assignment is aggregate gap minimizing. We then consider probabilistic assignment of agents to slots, and make use of the previous method to propose an aggregate gap minimizing modification of the classic random priority method to solve this class of problems. We also provide some logical relations in our setting among standard axioms in the literature on assignment problems, and explore the robustness of our results to several extensions of our setting.
    Keywords: Probabilistic assignment, random priority, aggregate gap minimizing, sd-efficiency, bottleneck
    JEL: C78 D61 D63
    Date: 2014–03
  16. By: Dittrich, Dennis Alexis Valin; Büchner, Susanne; Kulesz, Micaela Maria
    Abstract: To reduce the cognitive experimenter demand effect we embed a dictator game in a more complex decision environment, a dynamic household savings decision problem, thus rendering the dictator decision to share some endowment less salient. We then use this game in a laboratory experiment to investigate gender specific allocation behaviour and discrimination. We observe that dictators treat females nicer than males independent of their own gender. Participants are not aware of their discriminating behaviour.
    Keywords: repeated dictator game; altruistic preferences; gender discrimination
    JEL: C73 C91 D91
    Date: 2014–02–07
  17. By: Widad Guechtouli
    Abstract: In this paper, we study both processes of direct and indirect knowledge transfer, from a modelling perspective, using agent-based models. In fact, there are several ways to model knowledge. We choose to study three different representations, and try to determine which one allows to better capture the dynamics of knowledge diffusion within a social network. Results show that when knowledge is modelled as a binary vector, and not cumulated, this enables us to observe some heterogeneity in agents' learning and interactions, in both types of knowledge transfer.
    Keywords: knowledge model, knowledge transfer, social networks, communication.
    Date: 2014–02–25

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