nep-gth New Economics Papers
on Game Theory
Issue of 2016‒06‒04
ten papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. A universal construction generating potential games By Kukushkin, Nikolai S.
  2. Destroying Surplus and Buying Time in Unanimity Bargaining By Volker Britz
  3. That’s the ticket: Explicit lottery randomisation and learning in Tullock contests By Subhasish M. Chowdhury; Anwesha Mukherjee; Theodore L. Turocy
  4. Choice of strategic variables by relative profit maximizing firms in oligopoly By Satoh, Atsuhiro; Tanaka, Yasuhito
  5. Matching and credit frictions in the housing market By Eerola, Essi; Määttänen, Niku
  6. Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games. By Yola Engler; Rudolf Kerschbamer; Lionel Page
  7. Cooperation : Vehicle routing and outsouring, games and nucleoni By Huijink, Sybren
  8. Making an arranged marriage work: A game-theoretic analysis By Batabyal, Amitrajeet
  9. Do I care if others lie? Current and future effects of delegation of lying By Serhiy Kandul; Oliver Kirchkamp
  10. Replica Core Limit Theorem for Economy with Satiation By Hiromi Murakami; Ken Urai

  1. By: Kukushkin, Nikolai S.
    Abstract: Strategic games are considered where each player's total utility is the sum of local utilities obtained from the use of certain "facilities." All players using a facility obtain the same utility therefrom, which may depend on the identities of users and on their behavior. If a regularity condition is satisfied by every facility, then the game admits an exact potential; both congestion games and games with structured utilities are included in the class and satisfy that condition. Under additional assumptions the potential attains its maximum, which is a Nash equilibrium of the game.
    Keywords: Potential game; Congestion game; Game with structured utilities; Game of social interactions; Additive aggregation
    JEL: C72
    Date: 2016–05–31
  2. By: Volker Britz (ETH Zurich, Switzerland)
    Abstract: In non-cooperative bargaining games in the tradition of Rubinstein, the proposer derives bargaining power from the prospect of a costly delay which would follow the rejection of a proposal. We consider a unanimity bargaining game in which the proposer can strategically choose to prolong this delay. Prolonging the delay increases the proposer's bargaining power, but is assumed to come at a cost and thus cause an inefficiency. We use an appropriate refinement of stationary subgame-perfect equilibrium as the solution concept. We characterize equilibrium strategies and payoffs. We establish conditions on model parameters under which equilibrium is or is not efficient. For inefficient equilibria, we quantify the extent of the inefficiency. Moreover, we study the relation between the number of players and the degree of inefficiency. We find that inefficient equilibria become more inefficient the more players there are. Moreover, the parameter region in which an efficient equilibrium is possible shrinks when the number of players increases.
    Keywords: Bargaining, Surplus Destruction, Discount Factor, Timing
    JEL: C72 C78
    Date: 2016–05
  3. By: Subhasish M. Chowdhury (University of East Anglia); Anwesha Mukherjee (University of East Anglia); Theodore L. Turocy (University of East Anglia)
    Abstract: We experimentally contrast mathematical versus operational explanations of Tullock lottery contests. We contrast a protocol explaining the contest in terms of probability of winning, with an operational approach that carries out the random component of the contest as an explicit lottery each period. Initial expenditure levels are significantly lower when using the operational approach. In addition, using the operational approach, groups far from equilibrium in a given period move more rapidly towards approximate mutual best response. We find these results in sessions conducted in the UK and in the US. The implications that can be drawn from experiments on contest games therefore depend on the approach used to present the game to the players.
    Keywords: lottery contest, learning, framing, experiment
    JEL: C72 C91 D72 D83
    Date: 2016–05–21
  4. By: Satoh, Atsuhiro; Tanaka, Yasuhito
    Abstract: This paper studies the choice of strategic variables by firms in a symmetric oligopoly in which each firm produces differentiated goods and maximizes its relative profit that is the difference between its profit and the average profit of the other firms. We consider a two stage game such that in the first stage the firms choose their strategic variables, quantity or price, and in the second stage they determine the values of their strategic variables. We show that the choice of strategic variables is irrelevant in the sense that the equilibrium quantities and prices are the same in all firms whichever each firm chooses in the first stage, so any combination of strategy choice by the firms constitutes a sub-game perfect equilibrium in the two stage game.
    Keywords: relative profit maximization, oligopoly
    JEL: D43
    Date: 2016–01–01
  5. By: Eerola, Essi; Määttänen, Niku
    Abstract: ​We study the interaction of matching and credit frictions in the housing market. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. We analyze how borrowing constraints influence house price determination in the presence of matching frictions. We also show that credit frictions greatly magnify the effects of matching frictions. For instance, in the presence of matching frictions, a moderate tightening of the borrowing constraint increases idiosyncratic price dispersion and the average time-on-the-market substantially.
    Keywords: housing, borrowing constraint, matching
    JEL: E21 R21 C78
    Date: 2015–10–05
  6. By: Yola Engler; Rudolf Kerschbamer; Lionel Page
    Abstract: We investigate the role of intentions in two-player two-stage games. For this purpose we systematically vary the set of opportunity sets the first mover can chose from and study how the second mover reacts not only to opportunities of gains but also of losses created by the choice of the first mover. We find that the possibility of gains for the second mover (generosity) and the risk of losses for the first mover (vulnerability) are important drivers for second mover behavior. On the other hand, efficiency concerns and an aversion against violating trust seem to be far less important motivations. We also find that second movers compare the actual choice of the first mover and the alternative choices that would have been available to him to allocations that involve equal material payoffs.
    Keywords: Social Preferences; Other-Regarding Preferences; Intentions; Reciprocity; Trust Game;
    JEL: C91 C92 D63 D64
    Date: 2016–05–18
  7. By: Huijink, Sybren (Tilburg University, School of Economics and Management)
    Abstract: This dissertation deals with two topics that arise when transportation companies cooperate. The first chapters of this dissertation focus on a cooperation structure used in practice. In this structure, the companies agree on a pricing mechanism for which each company can outsource orders to other members of the structure. The chapters analyze what the pricing mechanism should be and which orders a company should outsource. When cooperating, the companies often have less costs which result in gains. But how should these gains be divided over the companies? Cooperative game theory provides divisions. The focus of the second part is on a new proportional solution concept, the proportionate nucleolus, and a new bankruptcy rule, the clights rule.
    Date: 2016
  8. By: Batabyal, Amitrajeet
    Abstract: In this note we analyze a simple game model of effort and time investment in an arranged marriage where the goal of the two partners making this investment is to create a better marital relationship. We first specify the best response functions of the two married partners. Next, we solve for the Nash equilibrium and then argue that this equilibrium is unique. Finally, we delineate an interesting connection between the two best response functions in our model and the corresponding best response functions in the well known two-player Cournot game.
    Keywords: Arranged Marriage, Effort, Nash Equilibrium, Static Game, Strategic Complements
    JEL: D13 J12
    Date: 2016–03–10
  9. By: Serhiy Kandul (Friedrich-Schiller-University Jena); Oliver Kirchkamp (Friedrich-Schiller-University Jena)
    Abstract: The aim of this study is to find out why people are telling the truth: is it a desire to respect trust, to avoid losses for others, or a mere distaste for lying per se? To answer this question we study a sender-receiver game where it is possible to delegate the act of lying and where it is possible to take pro-social actions in a subsequent dictator game. We examine how delegation affects the outcomes of people's current and future ethical decisions. We find that a non-trivial fraction of participants delegate their decision. However, delegation is associated with higher transfers in the subsequent dictator game
    Keywords: Sender-Receiver games, moral balancing, guilt aversion
    JEL: C72 D82
    Date: 2016–05–18
  10. By: Hiromi Murakami (Graduate School of Economics, Osaka University); Ken Urai (Graduate School of Economics, Osaka University)
    Abstract: Dividend equilibrium, defined by Aumann and Drèze (1986), is one of the most general competitive equilibrium concepts for the market, including satiated consumers. Konovalov (2005) shows a core equivalence theorem to the dividend equilibrium using the concept of rejective core. Konovalov's argument, however, is based on the setting of an atomless large economy and the core limit problem for dividend equilibrium remains unsolved. In a previous paper, Urai and Murakami (2015), we provided a generalization of the Debreu-Scarf core limit theorem (Debreu and Scarf 1963) for monetary overlapping generations economies under an extended concept of replica core allocation. In this paper, we show that the concept and method also provide a core limit theorem for economies with satiation.
    Keywords: Dividend Equilibrium, Core Equivalence, Replica Economy, Economy with Satiation
    JEL: C71 D50
    Date: 2016–04

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