nep-gth New Economics Papers
on Game Theory
Issue of 2014‒08‒02
three papers chosen by
Laszlo A. Koczy
Magyar Tudományos Akadémia

  1. Mixed equilibrium in a pure location game: the case of n ≥ 4 firms By Christian Ewerhart
  2. The emergence of reciprocally beneficial cooperation By Sergio Beraldo; Robert Sugden
  3. Theory of civil war under asymmetric information By Jellal, Mohamed

  1. By: Christian Ewerhart
    Abstract: The Hotelling game of pure location allows interpretations in spatial competition, political theory, and professional forecasting. In this paper, the doubly symmetric mixed-strategy equilibrium for n ≥ 4 firms is characterized as the solution of a well-behaved boundary value problem. The analysis suggests that, in contrast to the cases n = 3 and n → ∞ , the equilibrium for a finite number of n ≥ 4 firms tends to overrepresent locations at the periphery of its support interval. Moreover, in the class of examples considered, an increase in the number of firms universally leads to a wider range of location choices and to a more dispersed distribution of individual locations. The results are used to comment on the potential benefit of competition in forecasting markets.
    Keywords: Location, Hotelling game, mixed-strategy equilibrium, boundary value problem
    JEL: C72 D43 D72 L13
    Date: 2014–07
  2. By: Sergio Beraldo (Università di Napoli Federico II and CSEF); Robert Sugden (School of Economics and Centre for Behavioural and Experimental Social Science, University of East Anglia)
    Abstract: This paper offers a new and robust model of the emergence and persistence of cooperation when interactions are anonymous, the population is well-mixed, and the evolutionary process selects strategies according to material payoffs. The model has a Prisoner’s Dilemma structure, but with an outside option of non-participation. The payoff to mutual cooperation is stochastic; with positive probability, it exceeds that from cheating against a cooperator. Under mild conditions, mutually beneficial cooperation occurs in equilibrium. This is possible because the non-participation option holds down the equilibrium frequency of cheating. The dynamics of the model are investigated both theoretically and through simulations.
    Keywords: Cooperation; voluntary participation; random payoffs
    JEL: C73
    Date: 2014–07–18
  3. By: Jellal, Mohamed
    Abstract: In this paper, we consider a model that suggests that the theory of exchange with asymmetric information seems suitable to provide a possible explanation model of occurrence and duration of civil wars. We show that although civil conflicts are not Pareto optimal ex post they may be Pareto optimal ex ante, in the way that every alternative leaves either the government or the rebellion worse off in some contingency which cannot be ruled out on the basis of the information which is common to both sides. Therefore, the critical determinants of the occurrence of civil conflicts appear to be arising as consequences of asymmetries in the amount of information about some relevant variables available to bargaining parties. Indeed, the civil war commitment is used as device of division of rents accruing to rebellion and the ruling government elite.
    Keywords: Civil Wars, Transfers, Conflict Duration, Asymmetric Information, Rents, Mechanism Design
    JEL: C7 D74 D82 D86
    Date: 2014–07–26

This nep-gth issue is ©2014 by Laszlo A. Koczy. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.