nep-gth New Economics Papers
on Game Theory
Issue of 2014‒03‒30
thirteen papers chosen by
Laszlo A. Koczy
Hungarian Academy of Sciences and Obuda University

  1. Stable lexicographic rules for shortest path games By Eric Bahel; Christian Trudeau
  2. Strategic Exploitation of a Common-Property Resource Under Rational Learning About its Reproduction By Christos Koulovatianos
  3. House Allocation via Deferred-Acceptance By EHLERS, Lars; KLAUS, Bettina
  4. A Characterization of Exact Non-atomic Market Games By AMARANTE, Massimiliano
  5. An algorithm for identifying agent-k-linked allocations in economies with indivisibilities By ANDERSSON, Tommy; EHLERS, Lars
  6. Equilibrium Selection in Sequential Games with Imperfect Information By Jon X. Eguia; Aniol Llorente-Saguer; Rebecca Morton; Antonio Nicolò
  7. Threshold Effects in Self-Enforcing International Environmental Agreements By Renaud Foucart; Grégoire Garsous
  8. Gender differences and stereotypes in the beauty contest By María Cubel; Santiago Sanchez-Pages
  9. On the effects of mergers on equilibrium outcomes in a common property renewable asset oligopoly By BENCHEKROUN, Hassan; GAUDET, Gérard
  10. Robust Competitive Auctions: A Theory of Stable Markets By Seungjin Han
  11. Advances in Auctions By Kaplan, Todd R; Zamir, Shmuel
  12. Public Bads, Heterogeneous Beliefs, and the Value of Information By Hiroaki Sakamoto
  13. On the Interpretation of Giving, Taking, and Destruction in Dictator Games and Joy-of-Destruction Games. By Le Zhang; Andreas Ortmann

  1. By: Eric Bahel; Christian Trudeau
    Abstract: For the class of shortest path games, we propose a family of new cost sharing rules satisfying core selection. These rules allocate cost shares to the players according to some lexicographic preference relation. The average of all such lexicographic rules is shown to satisfy many desirable properties (core selection, symmetry, demand additivity,...). Our method relates to what Tijs et. al (2011) refer to as the Alexia value. We propose a procedure allowing to compute these lexicographic allocations for any shortest path game.
    Keywords: shortest path, core, algorithm, lexicographic minima
    Date: 2014
  2. By: Christos Koulovatianos (CREA, Université de Luxembourg)
    Abstract: We build a workable game of common-property resource extraction under rational Bayesian learning about the reproduction prospects of a resource. We focus on Markov-perfect strate- gies under truthful revelation of beliefs. For reasonable initial conditions, exogenously shif- ting the prior beliefs of one player towards more pressimism about the potential of natural resources to reproduce, can create anti-conservation incentives. The single player whose be- liefs have been shifted towards mor pessimism exhibits higher exploitation rate than before. In response, all other players reduce their exploitation rates in order to conserve the resource. However, the overall conservation incentive is weak, making the aggregate exploitation rate higher than before the pessimistic shift in beliefs of that single player. Due to this weakness in strategic conservation responses, if the number of players is relatively small, then in cases with common priors, jointly shifting all players' beliefs more pessimism exacerbates the commons problem.
    Keywords: renewable resources,resource exploitation, non-cooperative dynamic games, Bayesian learning, stochstic games, commons, rational learning, uncertainty, beliefs
    JEL: D83 D84 C72 C73 O13 Q20 Q50 L70
    Date: 2014
  3. By: EHLERS, Lars; KLAUS, Bettina
    Abstract: We study the simple model of assigning indivisible and heterogenous objects (e.g., houses, jobs, offices, etc.) to agents. Each agent receives at most one object and monetary compensations are not possible. For this model, known as the house allocation model, we characterize the class of rules satisfying unavailable object invariance, individual rationality, weak non-wastefulness, resource-monotonicity, truncation invariance, and strategy-proofness: any rule with these properties must allocate objects based on (implicitly induced) objects' priorities over agents and the agent-proposing deferred-acceptance-algorithm.
    Keywords: Deferred-acceptance-algorithm, indivisible objects allocation, resource-monotonicity, strategy-proofness
    JEL: D63 D70
    Date: 2013
  4. By: AMARANTE, Massimiliano
    Abstract: Continuous exact non-atomic games are naturally associated to certain operators between Banach spaces. It thus makes sense to study games by means of the corresponding operators. We characterize non-atomic exact market games in terms of the properties of the associated operators. We also prove a separation theorem for weak compact sets of countably additive measures, which is of independent interest.
    Keywords: Lower/upper envelopes; separation theorem; exact games; non-atomic market games
    JEL: C71
    Date: 2013
  5. By: ANDERSSON, Tommy; EHLERS, Lars
    Abstract: We consider envy-free (and budget-balanced) rules that are least manipulable with respect to agents counting or with respect to utility gains. Recently it has been shown that for any profile of quasi-linear preferences, the outcome of any such least manipulable envy-free rule can be obtained via agent-k-linked allocations. This note provides an algorithm for identifying agent-k-linked allocations.
    Keywords: Least manipulable envy-free rules; algorithm
    JEL: C71 C78 D63 D71 D78
    Date: 2013
  6. By: Jon X. Eguia (Department of Economics, Univ. of Bristol. and Department of Politics, New York Univ.); Aniol Llorente-Saguer (School of Economics and Finance, Queen Mary, Univ. of London); Rebecca Morton (Department of Politics, NYU-NYC and NYU-Abu Dhabi.); Antonio Nicolò (School of Social Sciences, Univ. of Manchester)
    Abstract: Games with imperfect information often feature multiple equilibria, which depend on beliefs off the equilibrium path. Standard selection criteria such as passive beliefs, symmetric beliefs or wary beliefs rest on ad hoc restrictions on beliefs. We propose a new selection criterion that imposes no restrictions on beliefs: we select the action profi?le that is supported in equilibrium by the largest set of beliefs. We conduct experiments to test the predictive power of the existing and our novel selection criteria in two applications: a game of vertical multi-lateral contracting, and a game of electoral competition. We fi?nd that our selection criterion outperforms the other selection criteria.
    Keywords: imperfect information, equilibrium selection, passive beliefs, symmetric beliefs, vertical contract- ing, multiple equilibria
    JEL: H41 C72 D86 D72
    Date: 2014–03
  7. By: Renaud Foucart; Grégoire Garsous
    Keywords: climate change; self-enforcing international agreements; threshold effects
    JEL: Q54 C72
    Date: 2013–10
  8. By: María Cubel (Universitat de Barcelona & IEB); Santiago Sanchez-Pages (Universitat de Barcelona)
    Abstract: Recent literature has emphasized that individuals display different depths of reasoning when playing games. In this paper, we explore gender differences in strategic sophistication and study whether these differences are endogenous. We report results from two different experiments employing the beauty contest. In the first, large study, we show that females react very strongly to incentives to the extent that gender differences disappear when a monetary prize is awarded. In the second study, we use a within subject design to analyze how depth of reasoning varies with gender priming and the gender composition of the set of players. We corroborate that females display higher levels of sophistication and even overtake males when incentives are provided and gender is primed. On the other hand, males who believe that females are better in the game display higher sophistication when playing against females.
    Keywords: Guessing game, strategic sophistication, gender, beliefs, stereotype threat
    JEL: C72 C91 D81 J16
    Date: 2014
  9. By: BENCHEKROUN, Hassan; GAUDET, Gérard
    Abstract: This paper examines a dynamic game of exploitation of a common pool of some renewable asset by agents that sell the result of their exploitation on an oligopolistic market. A Markov Perfect Nash Equilibrium of the game is used to analyze the effects of a merger of a subset of the agents. We study the impact of the merger on the equilibrium production strategies, on the steady states, and on the profitability of the merger for its members. We show that there exists an interval of the asset's stock such that any merger is profitable if the stock at the time the merger is formed falls within that interval. That includes mergers that are known to be unprofitable in the corresponding static equilibrium framework.
    Keywords: Mergers; dynamic games; oligopoly; common property; renewable resources
    JEL: C73 D43 L13 Q20
    Date: 2013
  10. By: Seungjin Han
    Abstract: This paper shows that a competitive distribution of auctions (Peters 1997) is robust to the possibility of a seller's deviation to any arbitrary mechanism, let alone any direct mechanism because the sufficient condition for the robustness is embedded in its notion of equilibrium. This sufficient condition is generalized to examine the robustness of equilibrium in any decentralized market institution where competing principals (e.g. sellers) can offer mechanisms only from a set of mechanisms available in that market institution. The equivalence result (Gershkov et al. 2013) between Bayesian incentive compatible direct mechanisms and dominant strategy direct mechanism is also extended to express the generalized sufficient condition in terms of dominant strategy direct mechanisms.
    Keywords: competitive auctions, robust equilibrium, competing mechanism design
    JEL: C71 D82
    Date: 2014–03
  11. By: Kaplan, Todd R; Zamir, Shmuel
    Abstract: As a selling mechanism, auctions have acquired a central position in the free market economy all over the globe. This development has deepened, broadened, and expanded the theory of auctions in new directions. This chapter is intended as a selective update of some of the developments and applications of auction theory in the two decades since Wilson (1992) wrote the previous Handbook chapter on this topic.
    Keywords: Auctions; Private-Value Auctions; Multi-Unit Auctions; All-Pay Auctions; Resale; Position Auctions; Dynamic Auctions; Spectrum Auctions; Monotone Equilibrium
    JEL: C72 D44 D82 H57
    Date: 2014–03–20
  12. By: Hiroaki Sakamoto
    Abstract: This paper develops a simple model of public bads where players have heterogeneous beliefs about the consequence of their collective action. Properties of equilibrium and its relation to beliefs and preference are examined, followed by a detailed investigation of the impacts of new information. Our analysis sheds light on an important trade-off associated with information policies in the presence of belief heterogeneity and ambiguity. In particular, we show that newly available information can unambiguously worsen the free-riding problem even when it better reflects the correct risk than the players’ beliefs. Adding information noise will never mitigate the public-bad nature of the problem if players are equally confident about their beliefs. When the beliefs are highly heterogeneous, however, a certain amount of information noise can be Pareto-improving, for which the degrees of risk and ambiguity aversion play asymmetric roles.
    Keywords: externality; uncertainty; heterogeneous beliefs; information
    JEL: C72 D80 D81 Q54 H23
  13. By: Le Zhang (University of New South Wales); Andreas Ortmann (University of New South Wales)
    Abstract: The literature on dictator [D] and joy-of-destruction [JoD] games demonstrates that people can be nice and nasty. We study, by way of an experiment with between-subjects and within-subjects features, to what extent behaviors are context dependent and consistent. We find that, for one-shot D and JoD games, our participants' niceness and nastiness depend on the choice set. Contradicting the observed altruism and nastiness, participants tend to be selfish but nonetheless make choices that increase social welfare when given the opportunity.
    Keywords: Dictator game, Joy-of-Destruction game, Money burning, Altruism, Nastiness, Efficiency considerations, Mach-IV test
    JEL: A13 C79 D03 D64
    Date: 2013–11

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