nep-gth New Economics Papers
on Game Theory
Issue of 2015‒05‒16
seven papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Game theory: noncooperative games By van Damme, E.E.C.
  2. Two-candidate competition with endogenous valence: a differential game approach By Köppl Turyna, Monika
  3. Grading Hampers Cooperative Information Sharing in Group Problem Solving By Anne-Sophie Hayek; Claudia Toma; Dominique Oberlé; Fabrizio Butera
  4. Firm-Specific Information and Explicit Collusion in Experimental Oligopolies By Francisco Gomez-Martin; Sander Onderstal; Joep Sonnemans
  5. On analysis and characterization of the mean-median compromise method By Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.
  6. Spatial Coordination in Agglomeration Bonus Schemes with Transaction Costs and Communication: An Experimental Study By Simanti Banerjee; Timothy N. Cason; Frans P. de Vries; Nick Hanley
  7. Mean-median compromise method as an innovating voting rule in social choice theory By Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.

  1. By: van Damme, E.E.C. (Tilburg University, School of Economics and Management)
    Date: 2015
  2. By: Köppl Turyna, Monika
    Abstract: We propose a differential game approach to analyze two--candidate competition in a la Hotelling game with candidates simultaneously choosing locations and investment in valence. We find a Markov perfect equilibrium in which candidates choose divergent locations. Divergence from the median is increasing if the parameter measuring the importance of policy relative to valence is decreasing and if valence depreciates slowly. The results are generalizable to a version of the game with probabilistic voting, that is with a stochastic state equation.
    Keywords: differential game, two--candidate competition, valence
    JEL: D72 D78
    Date: 2014–05–01
  3. By: Anne-Sophie Hayek; Claudia Toma; Dominique Oberlé; Fabrizio Butera
    Abstract: We hypothesized that individual grading in group work, a widespread practice, hampers information sharing in cooperative problem solving. Experiment 1 showed that a condition in which members’ individual contribution was expected to be visible and graded, as in most graded work, led to less pooling of relevant, unshared information and more pooling of less-relevant, shared information than two control conditions where individual contribution was not graded, but either visible or not. Experiment 2 conceptually replicated this effect: Group members primed with grades pooled less of their unshared information, but more of their shared information, compared to group members primed with neutral concepts. Thus, grading can hinder cooperative work and impair information sharing in groups.
    Keywords: information sharing; grades; hidden profiles; cooperation; mixed-motives
    Date: 2015–05–06
  4. By: Francisco Gomez-Martin (University of Amsterdam); Sander Onderstal (University of Amsterdam); Joep Sonnemans (University of Amsterdam)
    Abstract: We experimentally study the effect of information about competitors’ actions on cartel stability and firms’ incentives to form cartels in Cournot markets. As in previous experiments, markets become very competitive when individualized information is available and participants cannot communicate. In contrast, when communication is possible, results reverse: Markets become less competitive and cartels become more stable when individualized information is available. We also observe that the extra profits that firms obtain thanks to the possibility to communicate are higher when individualized information is present, suggesting that firms have greater incentives to form cartels in that situation.
    Keywords: Cournot oligopoly; Cartels; Information; Experiments
    JEL: C92 L13 L41
    Date: 2015–05–10
  5. By: Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.
    Abstract: Most important results in Social Choice Theory concern impossibility theorems. They claim that no function, as complex as it might be, can satisfy simultaneously a restricted number of fair properties describing a democratic system. However, adopting new voting ideas can push back those limits. Some years ago, such a work was boosted by Balinski and Laraki on the basis of evaluations cast by voters to competitors; this is an alternative to arrovian framework which is based on ranking candidates by voters. Recently, Ngoie and Ulungu have proposed a new voting function – defined in both Balinski and Laraki’s spirit – which hybridizes Majority Judgment (MJ) and Borda Majority Count (BMC): the so-called Mean-Median Compromise Method (MMCM). The method puts at its credit the desired properties of MJ and BMC as well; indeed, it reduces their insufficiencies. The purpose of this paper is double: analyse and characterize MMCM features in comparison to other valuable voting functions.
    Keywords: Borda Majority Count, Majority Judgment, Mean-Median Compromise Method, Paradoxes
    JEL: C14 C78 D60 D70 D71 D72
    Date: 2014–10
  6. By: Simanti Banerjee (University of Nebraska-Lincoln); Timothy N. Cason (Purdue University); Frans P. de Vries (University of Stirling); Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews)
    Abstract: Agglomeration Bonus (AB) schemes reward private landowners to spatially coordinate land use decisions to enhance the supply of ecosystem services. The AB mechanism creates a coordination game with multiple Pareto ranked Nash equilibria, which correspond to different spatially-coordinated land use patterns. This paper experimentally analyses subjects’ participation decisions, land use choices and AB performance in the presence of transaction costs, with and without the option to communicate with neighboring subjects in a local network setting. The experiment varies transaction costs at two levels (high and low), which affects the risks and payoffs of coordinating on the different equilibria. Results indicate a significant difference in participation under high and low transaction costs in the early stages of the experiment. Increased experience reduces participation rates and AB performance. Costless pre-play communication induces full participation and land use choice pertaining to the efficient Nash equilibrium. If communication is costly, the level of transaction costs affects participation levels, the degree of spatial coordination, and the ecosystem services benefits produced. Our study suggests that performance of Payment for Ecosystem Services schemes in general and the AB scheme in particular can be improved through mechanisms intended to reduce the costs associated with participation and communication.
    Keywords: Coordination Games, Lab Experiments, Local Networks, Payment for Ecosystem Services
    JEL: C91 D83 D81 Q51 Q
    Date: 2015–05
  7. By: Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.
    Abstract: This paper aims at presenting a new voting function which is obtained in Balinski-Laraki's framework and benefits mean and median advantages. The so-called Mean-Median Comprise Method (MMCM) has fulfilled criteria such as unanimity, neutrality, anonymity, monotonicity, and Arrow's independence of irrelevant alternatives. It also generalizes approval voting system.
    Keywords: Aggregation, Approval Voting, Borda Majority Count, Majority Judgment, Social Choice Function.
    JEL: B16 C10 C65 C70 C73 D71 D72
    Date: 2014–12–19

This nep-gth issue is ©2015 by László Á. Kóczy. 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.