nep-gth New Economics Papers
on Game Theory
Issue of 2015‒12‒12
eleven papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Constitutions and Social Networks By Ana Mauleon; Nils Roehl; Vincent Vannetelbosch
  2. Equilibrium and Matching under Price Controls By P. Jean-Jacques Herings
  3. Multilateral Bargaining in Networks: On the Prevalence of Inefficiencies By Joosung Lee
  4. Networks of Many Public Goods with Non-Linear Best Replies By Yann Rébillé; Lionel Richefort
  5. The Coalitional Nash Bargaining Solution with Simultaneous Payoff Demands By Ricardo Nieva
  6. On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-way Flow Strict Nash Networks By Banchongsan Charoensook
  7. The Rise and Fall of the Great Fish Pact under Endogenous Risk of Stock Collapse By Adam N. Walker; Hans-Peter Weikard; Andries Richter
  8. International Environmental Agreements with Asymmetric Countries: Climate Clubs vs. Global Cooperation By Achim Hagen; Klaus Eisenack
  9. A Game-Theoreteic Analysis of Minority Language Use in Multilingual Societies By Uriarte Ayo, José Ramón
  10. Autonomous coalitions By Stéphane Gonzalez; Michel Grabisch
  11. On the additivity of preference aggregation methods By Csató, László

  1. By: Ana Mauleon (CEREC, Saint-Louis University ?Brussels and CORE, University of Louvain, Belgium); Nils Roehl (University of Paderborn and Bielefeld University, Germany); Vincent Vannetelbosch (CORE, University of Louvain and CEREC, Saint-Louis University ?Brussels, Belgium)
    Abstract: The objective of the paper is to analyze the formation of social networks where individuals are allowed to engage in several groups at the same time. These group structures are interpreted here as social networks. Each group is supposed to have specific rules or constitutions governing which members may join or leave it. Given these constitutions, we consider a social network to be stable if no group is modified any more. We provide requirements on constitutions and players’ preferences under which stable social networks are induced for sure. Furthermore, by embedding many-to-many matchings into our setting, we apply our model to job markets with labor unions. To some extent the unions may provide job guarantees and, therefore, have influence on the stability of the job market.
    Keywords: Social Networks, Constitutions, Stability, Many-to-Many Matchings
    JEL: C72 C78 D85
    Date: 2015–06
  2. By: P. Jean-Jacques Herings (Maastricht University, The Netherlands)
    Abstract: The paper considers a one-to-one matching with contracts model in the presence of price controls. This set-up contains two important streams in the matching literature, those with and those without monetary transfers, as special cases and allows for intermediate cases with some restrictions on the monetary transfers that are feasible. An adjustment process that ends with a stable outcome is presented, thereby proving the existence of stable outcomes. The process contains the deferred acceptance algorithm of Gale and Shapley (1962) and the approximate auction mechanism of Demange, Gale, and Sotomayor (1986) as special cases. The paper presents a notion of competitive equilibrium, called Drèze equilibrium, for this class of models, an extension of the concept as developed by Drèze (1975) for economies with divisible commodities subject to price controls. It is shown that Drèze equilibrium allocations are equivalent to allocations induced by stable outcomes. One implication is the existence of Drèze equilibria. Another implication is the equivalence of a competitive equilibrium concept and the concept of stable outcomes that is valid with and without monetary transfers as well as when monetary transfers are limited.
    Keywords: Price Controls, Matching, Stable Outcomes, Competitive Equilibrium, Drèze Equilibrium
    JEL: C71 C78 D45 D51
    Date: 2015–06
  3. By: Joosung Lee (University of Edinburgh, United Kingdom)
    Abstract: We introduce a noncooperative multilateral bargaining model for a network-restricted environment, in which players can communicate only with their neighbors. Each player strategically chooses the bargaining partners among the neighbors to buy out their communication links with upfront transfers. The main theorem characterizes a condition on network structures for efficient equilibria and shows the prevalence of strategic delays. If the underlying network is either complete or circular, then an efficient stationary subgame perfect equilibrium exists for all discount factors: all the players always try to reach an agreement as soon as practicable and hence no strategic delay occurs. In any other network, however, an efficient equilibrium is impossible for sufficiently high discount factors because some players strategically delay an agreement. We also provide an example of a Braess-like paradox, in which the more links are available, the less links are actually used. Thus, network improvements may decrease social welfare
    Keywords: Noncooperative Bargaining, Coalition Formation, Communication Restriction, Buyout, Network, Braess's Paradox
    JEL: C72 C78 D72 D74 D85
    Date: 2015–06
  4. By: Yann Rébillé (LEMNA, Université de Nantes); Lionel Richefort (LEMNA, Université de Nantes)
    Abstract: We model a bipartite network in which links connect agents with public goods. Agents play a voluntary contribution game in which they decide how much to contribute to each public good they are connected to. We show that the problem of finding a Nash equilibrium can be posed as a non-linear complementarity one. The existence of an equilibrium point is established for a wide class of individual preferences. We then find a simple sufficient condition, on network structure only, that guarantees the uniqueness of the equilibria, and provide an easy procedure for building networks that respects this condition.
    Keywords: Bipartite Graph, Public Good, Nash Equilibrium, Non-Linear, Complementarity Problem
    JEL: C72 D85 H41
    Date: 2015–06
  5. By: Ricardo Nieva (Universidad de Lima, Lima, Peru)
    Abstract: We consider a standard coalitional bargaining game where once a coalition forms it exits as in Okada (2011), however, instead of alternating offers, we have simultaneous payoff demands. We focus in the producer game he studies. Each player is chosen with equal probability. If that is the case, she can choose any coalition she belongs to. However, a coalition can form if an only if payoff demands are feasible as in the Nash (1953) demand game. After smoothing the game (as in Van Damme (1991)), when the noise vanishes, when the discount factor is close to 1, and as in Okada´s (2011), the coalitional Nash bargaining solution is the unique stationary subgameperfect equilibrium.
    Keywords: Coalitional Bargaining, Nash Program, Simultaneous Payoff, Demands, Uncertainty
    JEL: C71 C72 C78
    Date: 2015–07
  6. By: Banchongsan Charoensook (Keimyung University, Republic of Korea)
    Abstract: This paper brings together analyses of two-way flow Strict Nash networks under exclusive player heterogeneity assumption and exclusive partner heterogeneity assumption. This is achieved through examining how the interactions between these two assumptions influence important properties of Strict Nash networks. Built upon the findings of Billand et al (2011) and Galleotti et al (2006), which assume exclusive partner heterogeneity and exclusive player heterogeneity respectively, I provide a proposition that generalizes the results of these two models by stating that: (i) Strict Nash network consists of multiple non-empty components as in Galleotti et al (2006), and (ii) each non-empty component is a branching or Bi network as in Billand et al (2011). This proposition requires that a certain restriction on link formation cost (called Uniform Partner Ranking), which encloses exclusive partner heterogeneity and exclusive player heterogeneity as a specific case, is satisfied. In addition, this paper shows that value heterogeneity plays a relatively less important role in changing the shapes of Strict Nash networks.
    Keywords: Network Formation, Strict Nash Network, Two-way Flow Network, Branching Network, Agent Heterogeneity
    JEL: C72 D85
    Date: 2015–05
  7. By: Adam N. Walker (Environmental Economics and Natural Resources Group, Wageningen University, The Netherlands); Hans-Peter Weikard (Environmental Economics and Natural Resources Group, Wageningen University, The Netherlands); Andries Richter (Environmental Economics and Natural Resources Group, Wageningen University, The Netherlands and Centre for Ecological and Evolutionary Synthesis (CEES), The Department of Biosciences, University of Oslo)
    Abstract: Risk of stock collapse is a genuine motivation for cooperative fisheries management. We analyse the effect of an endogenously determined risk of stock collapse on the incentives to cooperate in a Great Fish War model. We establish that equilibrium harvest strategies are non-linear in stock and find that Grand Coalitions can be stable for any number of players if free-riding results in a total depletion of the fish stock. The results thus show conditions under which a Great Fish War becomes a Great Fish Pact. However, this conclusion no longer holds upon dropping the standard assumption that payoffs are evaluated in steady states. If payoffs in the transition between steady states are included, the increased incentives to deviate offset the increased benefits from cooperation due to the presence of endogenous risk and the Great Fish Pact returns to being a Great Fish War.
    Keywords: Coalition Stability, Dynamic Games, Endogenous Risk, Fish Stock Collapse, Fish War, Renewable Resource Exploitation
    JEL: C72 C73 Q22
    Date: 2015–06
  8. By: Achim Hagen (Carl von Ossietzky University Oldenburg, Germany); Klaus Eisenack (Carl von Ossietzky University Oldenburg, Germany)
    Abstract: We investigate whether global cooperation for emission abatement can be improved if asymmetric countries can sign different parallel environmental agreements. The analysis assumes a two-stage game theoretical model. Conditions for self-enforcing sets of agreements and the resulting total emission abatement are determined. We allow for multiple coalitions with multiple types of asymmetric countries. We then analyze the effect of multiple coalitions for the case of increasing marginal costs of abatement as well as for decreasing marginal benefits of abatement more generally. The results are sensitive to the assumptions on the benefits from abatement. For constant marginal benefits, the possibility of multiple agreements increases the number of cooperating countries and total abatement (compared to the standard case with a single agreement). For decreasing marginal benefits, total emissions are independent of the number of admitted agreements. The paper thus contributes to the emerging discussion on the scope and limits of climate clubs.
    Keywords: Multiple International Environmental Agreements, Coalition Formation
    JEL: Q54 C72
    Date: 2015–06
  9. By: Uriarte Ayo, José Ramón
    Abstract: This chapter studies multilingual democratic societies with highly developed economies. These societies are assumed to have two languages with official status: language A, spoken by every individual, and language B, spoken by the bilingual minority. We emphasize that language rights are important, but the survival of the minority language B depends mainly on the actual use bilinguals make of B. The purpose of the present chapter is to study some of the factors affecting the bilingual speakers language choice behaviour. Our view is that languages with their speech communities compete for speakers just as fi rms compete for market share. Thus, the con ict among the minority languages in these societies does not take the rough expressions such as those studied in Desmet et al. (2012). Here the con flict is more subtle. We model highly plausible language choice situations by means of choice procedures and non-cooperative games, each with different types of information. We then study the determinants of the bilinguals ' strategic behaviour with regard to language. We observe that the bilinguals' use of B is shaped, essentially, by linguistic conventions and social norms that are developed in situations of language contact.
    Keywords: minority, language, contact, information, politeness, equilibrium, competition, evolutionary, stability, imperfect
    JEL: C72 Z10
    Date: 2015–10
  10. By: Stéphane Gonzalez (Université Jean Monnet - Saint-Etienne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: We consider in this paper solutions for TU-games where it is not assumed that the grand coalition is necessarily the final state of cooperation. Partitions of the grand coalition, or balanced collections together with a system of balancing weights interpreted as a time allocation vector are considered as possible states of cooperation. The former case corresponds to the c-core, while the latter corresponds to the aspiration core or d-core, where in both case, the best configuration (called a maximising collection) is sought. We study maximising collections and characterize them with autonomous coalitions, that is, coalitions for which any solution of the d-core yields a payment for that coalition equal to its worth. In particular we show that the collection of autonomous coalitions is balanced, and that one cannot have at the same time a single possible payment (core element) and a single possible configuration. We also introduce the notion of inescapable coalitions, that is, those present in every maximising collection. We characterize the class of games for which the sets of autonomous coalitions, vital coalitions (in the sense of Shellshear and Sudhölter), and inescapable coalitions coincide, and prove that the set of games having a unique maximising coalition is dense in the set of games.
    Keywords: cooperative game,core,balancedness,c-core,aspiration core,coalition formation,autonomous coalitions JEL Classification: C71
    Date: 2015
  11. By: Csató, László
    Abstract: The paper reviews some axioms of additivity concerning ranking methods used for generalized tournaments with possible missing values and multiple comparisons. It is shown that one of the most natural properties, called consistency, has strong links to independence of irrelevant comparisons, an axiom judged unfavourable when players have different opponents. Therefore some directions of weakening consistency are suggested, and several ranking methods, the score, generalized row sum and least squares as well as fair bets and its two variants (one of them entirely new) are analysed whether they satisfy the properties discussed. It turns out that least squares and generalized row sum with an appropriate parameter choice preserve the relative ranking of two objects if the ranking problems added have the same comparison structure.
    Keywords: preference aggregation, tournament ranking, paired comparison, additivity, axiomatic approach
    JEL: D71
    Date: 2015–11–30

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