nep-gth New Economics Papers
on Game Theory
Issue of 2014‒07‒21
five papers chosen by
Laszlo A. Koczy
Magyar Tudományos Akadémia

  1. Hybrid Procedures By Yukio KORIYAMA; Matias NUNEZ
  2. Bargaining through Approval By Matias Nunez; Jean-Francois Laslier
  3. Commons without Tragedy: Sampling Dynamics and Cooperative Resource Extraction By Juan Camilo Cárdenas; César Mantilla; Rajiv Sethi
  4. Inverted-U aggregate investment curves in a dynamic game of advertising By L. Lambertini; G. Zaccour
  5. Games with Money and Status: How Best to Incentivize Work By Pradeep Dubey; John Geanakoplos

  1. By: Yukio KORIYAMA; Matias NUNEZ (Ecole Polytechnique, Department of Economics; Université de Cergy-Pontoise, THEMA)
    Abstract: We consider hybrid procedures: a first step of reducing the game by iterated elimination of weakly dominated strategies (IEWDS) followed by a second step of applying an equilibrium refinement. We show that the set of perfect/proper outcomes of a reduced normal-form game might be larger than the set of the perfect/proper outcomes of the whole game by applying IEWDS. Even in dominance solvable games in which all the orders of IEWDS select a unique singleton in the game, the surviving outcome need not be a proper equilibrium of the whole game. However, in dominance solvable games that satisfy the transference of decision maker indifference condition (TDI of Marx and Swinkels, 1997), the surviving outcome coincides with the unique stable one and hence is proper.
    Keywords: Weak dominance, Iterated elimination, Proper equilibrium.
    JEL: C7 C72
    Date: 2014
  2. By: Matias Nunez; Jean-Francois Laslier (CNRS- Université de Cergy-Pontoise, THEMA; CNRS- Paris SChool of Economics)
    Abstract: The paper considers two-person bargaining under Approval Voting. It first proves the existence of pure strategy equilibria. Then it shows that this bargaining method ensures that both players obtain at least their average and median utility level in equilibrium. Finally it proves that, provided that the players are partially honest, the mechanism triggers sincerity and ensures that no alternative Pareto dominates the outcome of the game.
    Keywords: Bargaining, Approval Voting, Efficiency, Partial Honesty
    JEL: C78 D7
    Date: 2014
  3. By: Juan Camilo Cárdenas; César Mantilla; Rajiv Sethi
    Abstract: This paper reconsiders evidence from experimental common pool resource games from the perspective of a dynamic model of sampling. Despite being parameter-free, the model is able to replicate some striking features of the data: monotonic frequency distributions, the persistent use of strictly dominated actions, and stable heterogeneity in choices. We argue that these patterns cannot be fully accounted for by existing theories based on other-regarding preferences and norms, and that the dynamics of sampling provide a useful complementary explanation for behavior in social dilemmas.
    Keywords: Common Pool Resources; Experiments; Sampling Equilibrium
    JEL: C73 C91 D03 H41 Q20
    Date: 2013–09–10
  4. By: L. Lambertini; G. Zaccour
    Abstract: We revisit the relationship between market power and firms' investment incentives in a noncooperative differential oligopoly game in which firms sell differentiated goods and invest in advertising to increase the brand equity of their respective goods. The feedback equilibrium obtains under open-loop rules, and aggregate expenditure on goodwill takes an inverted-U shape under both Cournot and Bertrand behaviour, provided product differentiation is sufficiently high. Total industry expenditure is higher under Cournot competition.
    JEL: C73 L13 M37
    Date: 2014–07
  5. By: Pradeep Dubey (SUNY); John Geanakoplos (Cowles Foundation, Yale University)
    Abstract: Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status together to get his employees to work hard for the least total cost. We find that he should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, he should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers.
    Keywords: Status, Incentives, Wages
    JEL: C70 I20 I30
    Date: 2014–07

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