nep-gth New Economics Papers
on Game Theory
Issue of 2014‒10‒13
seven papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. General Equilibrium Analysis of Bio-Energy Options By Adolf STROOMBERGEN; Peter HALL
  2. Revenue Equivalence Revisited: Bounded Rationality in Auctions By Konrad RICHTER
  3. Static and Dynamic Networks in Interbank Markets By Ethan Cohen-Cole; Eleonora Patacchini; Yves Zenou
  4. A Game Theory Model of Inverse Pricing Strategy By Ying KONG; Hsiao-Chan WANG
  5. A new solution for the roommate problem. The Q-stable matchings By Peter Biro; Elena Iñarra; Elena Molis
  6. The Process of Establishing Cooperation in the Production Chain: Design and Use of a Partnership Game By Ger Trip; Woody Maijers
  7. CSR in an Asymmetric Duopoly with Environmental Externalities By Luca Lambertini; Arsen Palestini; Alessandro Tampieri

  1. By: Adolf STROOMBERGEN; Peter HALL
  2. By: Konrad RICHTER
  3. By: Ethan Cohen-Cole (Econ One Research); Eleonora Patacchini (Cornell University and EIEF); Yves Zenou (Stockholm University and IFN)
    Abstract: This paper proposes a model of network interactions in the interbank market. Our innovation is to model systemic risk in the interbank network as the propagation of incentives or strategic behavior rather than the propagation of losses after default. Transmission in our model is not based on default. Instead, we explain bank profitability based on competition incentives and the outcome of a strategic game. As competitors’ lending decisions change, banks adjust their own decisions as a result: generating a ‘transmission’ of shocks through the system. We provide a unique equilibrium characterization of a static model, and embed this model into a full dynamic model of network formation. We also determine the key bank, which is the bank that is crucial for the stability of the financial network.
    Date: 2014
  4. By: Ying KONG; Hsiao-Chan WANG
  5. By: Peter Biro (Institute of Economics, Research Centre for Economic and Regional Studies, Hungarian Academy of Sciences.); Elena Iñarra (University of the Basque Country (UPV/EHU) and Instituto de Economia Publica.); Elena Molis (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: The aim of this paper is to propose a new solution for the roommate problem with strict preferences. We introduce the solution of maximum irreversibility and consider almost stable matchings (Abraham et al. [2]) and maximum stable matchings (Tan [30] [32]). We nd that almost stable matchings are incompatible with the other two solutions. Hence, to solve the roommate problem we propose matchings that lie at the intersection of the maximum irreversible matchings and maximum stable matchings, which are called Q-stable matchings. These matchings are core consistent and we oer an ecient algorithm for computing one of them. The outcome of the algorithm belongs to an absorbing set
    Keywords: Cost allocation;
    Date: 2014–09–23
  6. By: Ger Trip; Woody Maijers
  7. By: Luca Lambertini (Department of Economics, University of Bologna); Arsen Palestini (MEMOTEF, Sappienza university of Rome); Alessandro Tampieri (CREA, Université de Luxembourg)
    Abstract: We investigate a linear state differential game describing an asymmetric Cournot duo- poly with capacity accumulation à la Ramsey and a negative environmental externality (pollution), in which one of the firms has adopted corporate social responsibility (CSR) in its statute, and therefore includes consumer surplus and the environmental effects of production in its objective function. If the market is sufficiently large, the CSR firm sells more, accumulates more capital and earns higher profits than its profit-seeking rival.
    Keywords: Capital accumulation, asymmetric duopoly, dynamic games
    JEL: C73 H23 L13 O31
    Date: 2014

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