nep-gth New Economics Papers
on Game Theory
Issue of 2015‒03‒27
eight papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Stable Observable Behavior By Heller, Yuval; Mohlin, Erik
  2. An Overview on the Application of the Coalitional Games in Cancer Diagnosis By BIMONTE, Giovanna; SENATORE, Luigi
  3. The Conditional Contribution Mechanism for the Provision of Public Goods By Reischmann, Andreas
  4. The Implementation Duality By Georg Nöldeke; Larry Samuelson
  5. Maximin Envy-Free Division of Indivisible Items By Brams, Steven; Kilgour, Marc; Klamler, Christian
  6. Network formation with value heterogeneity: centrality, segregation and adverse effects By Andreas Bjerre-Nielsen
  7. Urban Social Structure, Social Capital and Spatial Proximity By Patacchini, Eleonora; Picard, Pierre M; Zenou, Yves
  8. Between plurality and proportionality: an analysis of vote transfer systems By Csató, László

  1. By: Heller, Yuval; Mohlin, Erik
    Abstract: We study stable behavior when players are randomly matched to play a game, and before the game begins each player may observe how his partner behaved in a few interactions in the past. We present a novel modeling approach and we show that strict Nash equilibria are always stable in such environments. We apply the model to study the Prisoner's Dilemma. We show that if players only observe past actions, then defection is the unique stable outcome. However, if players are able to observe past action profiles, then cooperation is also stable. Finally, we present extensions that study endogenous observation probabilities and the evolution of preferences.
    Keywords: Evolutionary stability, random matching, indirect reciprocity, secret handshake, submodularity, image scoring.
    JEL: C72 C73 D01
    Date: 2015–03–19
  2. By: BIMONTE, Giovanna (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy); SENATORE, Luigi (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)
    Abstract: In this paper we describe some interesting applications of the Coalitional Game in Cancer Diagnosis. Particularly we illustrate specific studies that starting from the description of the Microarray Technology apply game theoretical tools able to improve the analysis of genes’ expression data. Indeed DNA Microarray technology has become a useful technique to develop new diagnostic tools and to identify genes’ degeneration and therapeutic targets for human cancers. Nevertheless the cooperative game theory analysis can strongly support the therapy of the diseases starting from the analysis of the genes’ behaviour. Using the coalitional games it is possible to evaluate the interactivity level of every gene according to the intricate and intrinsic interrelation among them. The coalitional games can be used as a theoretical tool that determines an index able to point out for each biological factor or variable the relevance in the production of a determined biological effect.
    Keywords: Microarray games; Cooperative games; Medical applications
    JEL: E62 H50 H62
    Date: 2014–12–30
  3. By: Reischmann, Andreas
    Abstract: Many mechanisms have been designed to solve the free-rider problem in public good environments. The designers of those mechanisms focused on good static equilibrium properties. In this paper, I propose a new mechanism for the provision of public goods that has good dynamic properties instead. The mechanism gives all agents the possibility to condition their contribution on the total level of contribution provided by all agents. Under a reasonable variant of Better Response Dynamics all equilibrium outcomes are Pareto efficient. This makes the mechanism particularly suited for repeated public good environments. In contrast to many previously suggested mechanisms, it does further not require an institution that has the power to enforce participation and/or transfer payments. Neither does it use any knowledge of agents preferences.
    Keywords: Mechanism Design; Public Goods; Better Response Dynamics.
    Date: 2015–03–17
  4. By: Georg Nöldeke; Larry Samuelson (University of Basel)
    Abstract: We use the theory of abstract convexity to study adverse-selection principal-agent problems and two-sided matching problems, departing from much of the literature by not requiring quasilinear utility. We formulate and characterize a basic underlying implementation duality. We show how this duality can be used to obtain a sharpening of the taxation principle, to obtain a general existence result for solutions to the principal-agent problem, to show that (just as in the quasilinear case) all increasing decision functions are implementable under a single crossing condition, and to obtain an existence result for stable outcomes featuring positive assortative matching in a matching model.
    Keywords: Implementation, Duality, Galois Connection, Imperfectly Transferable Utility, Principal-Agent Model, Two-Sided Matching
    JEL: C62 C78 D82 D86
    Date: 2015
  5. By: Brams, Steven; Kilgour, Marc; Klamler, Christian
    Abstract: Assume that two players have strict rankings over an even number of indivisible items. We propose algorithms to find allocations of these items that are maximin—maximize the minimum rank of the items that the players receive—and are envy-free and Pareto-optimal if such allocations exist. We show that neither maximin nor envy-free allocations may satisfy other criteria of fairness, such as Borda maximinality. Although not strategy-proof, the algorithms would be difficult to manipulate unless a player has complete information about its opponent’s ranking. We assess the applicability of the algorithms to real-world problems, such as allocating marital property in a divorce or assigning people to committees or projects.
    Keywords: Fair division; indivisible items; maximin; envy-free
    JEL: C7 D63 D7
    Date: 2015–03–22
  6. By: Andreas Bjerre-Nielsen
    Abstract: We investigate formation of economic and social networks where agents may form or cut ties. The novelty is combining a setup where agents are heterogeneous in their talent for generating value in the links they form and value may also accrue from indirect ties. We provide sufficient conditions for assortative matching: agents of greater talent have partners of greater talent. A novel feature is that agents with higher talent are more central in networks. Another novel feature is degree assortativity: partnered agents have a similar number of partners. Two suboptimal network structures are noteworthy. One network displays excess assortativity as high and low talented types fail to connect, and thus inefficient due to payoff externalities despite otherwise obeying the conditions of Becker (1973). In another suboptimal network an agent of low talent becomes excessively central.
    Date: 2015–03
  7. By: Patacchini, Eleonora; Picard, Pierre M; Zenou, Yves
    Abstract: We develop a theoretical model where the existence and intensity of dyadic contacts depend on location. We show that agents tend to interact more with agents that are highly central in the network of social contacts and that are geographically closer. Using a unique geo-coded dataset of friendship networks in the United States, we find evidence consistent with this model. The main empirical challenge, which is the possible endogenous network formation, is tackled by employing a Bayesian methodology that allows to estimate simultaneously network formation and intensity of network contacts.
    Keywords: Bayesian estimation; endogenous network formation; geographical space; Social interactions; social space
    JEL: R1 R23 Z13
    Date: 2015–03
  8. By: Csató, László
    Abstract: The paper considers a general model of electoral systems combining district-based elections with a compensatory mechanism in order to implement any outcome between strictly majoritarian and purely proportional seat allocation. It contains vote transfer and allows for the application of three different correction formulas. Analysis in a two-party system shows that a trade-off exists for the dominant party between the expected seat share and the chance of obtaining majority. Vote transfer rules are also investigated by focusing on the possibility of manipulation. The model is applied to the 2014 Hungarian parliamentary election. Hypothetical results reveal that the vote transfer rule cannot be evaluated in itself, only together with the share of constituency seats. With an appropriate choice of the latter, the three mechanisms can be made functionally equivalent.
    Keywords: electoral systems, mixed-member systems, vote transfer, two-party system, Hungary
    JEL: D72
    Date: 2015

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