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on Game Theory |
| By: | Kauffeldt, T. Florian |
| Abstract: | This paper investigates whether the strategic behavior of expected utility players differs from that of non-expected utility players in the context of incomplete information games where players can choose mixed strategies. Two conditions are identified where uncertainty-averse non-expected utility players behave differently from expected utility players. These conditions concern the use of mixed strategies and the response to it. It is shown that, if and only if these conditions fail, nonexpected utility players behave as if they were expected utility players. The paper provides conditions, in terms of the payoff structure of a game, which are necessary and sufficient for behavioral differences between expected and non-expected utility players. In this context, games are analyzed that are especially relevant for the design of experiments. |
| Keywords: | Non-expected utility; Incomplete information games;Uncertainty aversion; Mixed strategies; Strategic behavior |
| Date: | 2016–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0614&r=gth |
| By: | Marco Faillo; Federico Fornasari; Luigi Mittone |
| Abstract: | Following some recent studies, we experimentally test the effect of intra-group leadership in a public good experiment. Specifically, individuals taking part in our experiment are randomly assigned either the role of leader or the role of follower. Leaders take part in a public good game, aware of the fact that every decision they make directly affects their followers. In this sense, our experimental setting combines the dimension of leadership in cooperation with the one of delegated agents. In our experiment, we find that leadership produces two main effects: subjects contribute more, and tend to punish more frequently. In spite of the presence of higher contributions, we observe lower payoffs; these are caused by an aggressive behavior that push leaders to mane an undue use of punishment. Allowing one-sided communication between followers and leaders provide a different effect: communication reduces decision makers’ aggressiveness, leading to lower contributions and punishment, but better results in terms of final payoffs. The same welfare can be reached when leadership is not implemented at all; this suggests that the presence of a dictatorial leader in public goods with punishment can be beneficial only when there is communication. |
| Keywords: | Voluntary contribution experiment, Leadership, Punishment |
| JEL: | C72 C92 H41 O12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:1604&r=gth |
| By: | Nobuyuki Hanaki (GREDEG CNRS; Université Nice Sophia Antipolis; Skema Business School; IUF); Emily Tanimura (CES - Centre d'économie de la Sorbonne; Université Panthéon-Sorbonne); Nicolaas Vriend (Queen Mary, University of London) |
| Abstract: | We study a linear location model Hotelling (1929) in which n (with n >=2) boundedly rational players follow (noisy) myopic best-reply behavior. We show through numerical and mathematical analysis that such players spend almost all the time clustered together near the center, re-establishing the "Principle of Minimum Differentiation" that had been discredited by equilibrium analyses. Thus, our analysis of the best-response dynamics shows that when considering market dynamics as well as their policy and welfare implications, it may be important to look beyond equilibrium analyses. |
| Keywords: | Hotelling location model, Principle of Minimum Differentiation, Nash equilibrium, Best-response dynamics, Stochastic stability, Invariant measures |
| JEL: | C72 D72 L13 R30 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2016-07&r=gth |
| By: | Tom Brijs; Daniel Huppmann; Sauleh Siddiqui; Ronnie Belmans |
| Abstract: | This article proposes a new electricity storage business model based on multiple simultaneously considered revenue streams, which can be attributed to different market activities and players. These players thus share electricity storage resources and compete to obtain the right to use them in a dynamic allocation mechanism. It is based on the design of anew periodically organized auction to allocate shared storage resources through physical storage rights between different market players and ac-companying applications. Through such a flexibility platform owners of flexible resources can commercialize their flexible capacity over different applications, while market players looking for additional flexibility can obtain this through a pay-per-use principle and thus not having to make long-term investment commitments. As such, they can quickly adapt their portfolio according to the market situation. Alternatively, through such an allocation mechanism players can effectively share storage re-sources. Players may be incentivized to participate as they can share the investment cost, mitigate risk, exploit economies of scale, overcome regulatory barriers, and merge time-varying and player-dependent flexibility needs. The mechanism allocates the limited storage resources to the most valuable application for each market-clearing, based on the competing players' willingness-to-pay. An illustrative case study is provided in which three players share storage resources that are allocated through a daily auction with hourly market-clearings. |
| Keywords: | electricity storage, shared storage resources, auction-based allocation, (Generalized) Nash Equilibrium, Mixed Complementarity Problem |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1566&r=gth |
| By: | Michal Krawczyk (UW - University of Warsaw); Fabrice Le Lec (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We propose an experimental method whose purpose is to remove social concerns in games. The core idea is to adapt the binary-lottery incentive scheme, so that an individual payoff is a probability to see one's preferred social allocation implemented. For a large class of social preference models, the method induces payoffs in the game that are in line with subjects' (social) preferences. We test the method in several popular experimental games, contrasting behaviors with and without our methodology. Our results suggest that a substantial part of the difference between predictions based on selfishness and observed behaviors seems driven by such preferences , since our method does induce more " selfish " behaviors. But they also indicate that a considerable share is left unexplained, perhaps giving weight to alternative explanations or other types of social concerns. |
| Keywords: | social preferences,experimental game theory,ultimatum game,public goods game,trust game,prisoner's dilemma,dictator game |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01297361&r=gth |
| By: | Mariagiovanna Baccara; Allan Collard-Wexler; Leonardo Felli; Leeat Yariv |
| Abstract: | This paper uses a new dataset on child-adoption matching to estimate the preferences of potential adoptive parents over US-born and unborn children relinquished for adoption. We identify significant preferences favoring girls and against African American children put up for adoption. These attitudes vary in magnitudes across different adoptive parents—heterosexual, same-sex couples, and single women. We consider the effects of excluding single women and same-sex couples from the process, and find that this would substantially reduce the overall number of adopted children. |
| JEL: | C78 J13 J15 J16 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:46795&r=gth |
| By: | Audrey Hu (University of Amsterdam, the Netherlands); Liang Zou (University of Amsterdam) |
| Abstract: | A common assumption in the analysis of symmetric auctions is that the bidders' value estimates exhibit positive informational externalities (PIE). This assumption implies upward drifting price sequences at sequential auctions, which is challenged by an empirical regularity, known as the "declining price anomaly," that observed price sequences at real sequential auctions tend to be downward-drifting. This paper extends the existing analysis to a generalized interdependent values environment, in which the bidders' values can exhibit both PIE and NIE (negative informational externalities). The case of NIE can arise naturally when competing bidders are also competitors in the same product market. If a bidder's type is related to his or his firm's ensuing competitive advantage, then an increase of a bidder's type increases his own but may decrease other bidders' expected values. We consider a general sequential auction mechanism that sells m identical objects through K (≤m) consecutive rounds, each round involving possibly a different number of objects for sale and a different payment rule. For risk neutral bidders having unit demand and independent types, we obtain two major results. First, the direct sequentially incentive compatible auction mechanisms, which implement the performance of essentially all standard auctions, are feasible under both PIE and NIE. Second, while the total expected revenue is invariant to sequencing and payment rules, the expected selling prices from different rounds of the auction are not the same. In a PIE environment the expected price sequence tends to be upward drifting, whereas in an NIE environment the expected price sequence is strongly downward drifting: the expected lowest price in round k exceeds the expected highest price in round k+1. The declining price "anomaly" could, therefore, be evidence of bidders' values featuring NIE or post-auction competition. |
| Keywords: | Sequential auction; generalized interdependent values; declining price anomaly; informational externalities; revenue equivalence |
| JEL: | D44 D82 |
| Date: | 2016–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160016&r=gth |
| By: | Fageda, Xavier, 1975-; Flores-Fillol, Ricardo |
| Abstract: | In this paper, we investigate the relationship between airline network structure and airport congestion. More specifically, we study the ways in which airlines adjust frequencies to delays (as a measure of airport congestion) depending on the network type they operate. Our results suggest that network structure has a fundamental impact. Thus, while airlines operating fully-connected configurations reduce frequencies in response to more frequent delays, airlines operating hub-and-spoke structures increase frequencies. Therefore, network airlines have incentives to keep frequencies high even if this is at the expense of a greater congestion at their hub airports. This result sheds light on previously unclear results in the literature. Keywords: airline networks; airport congestion; delays. JEL Classification Numbers: L13; L93; R41. |
| Keywords: | Aeroports, Aviació comercial, Oligopolis, Transport, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/260960&r=gth |
| By: | Alexander Chigodaev (National Research University Higher School) |
| Abstract: | We adapt a deterministic game theoretic framework in discrete time to super-hedge pricing contingent claims (CCs). The key aspect of this framework is that the worst-case scenario dictates the super-hedging price which protects counter-parties in nancial contracts from insolvencies. A general application algorithm for super-hedge pricing of European CC portfolios with piecewise linear payos, based on linear programming, is oered for practical usage. Examples of path-dependent European CCs and portfolios of vanilla European CCs are presented to highlight important features of this pricing framework. |
| Keywords: | worst case scenario, super-hedge, guaranteed price, recursive Bellman equation, martingale measure, European option, Asian option, Lookback option, portfolio of contingent claims. |
| JEL: | C61 C63 G11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:53/fe/2016&r=gth |