nep-gth New Economics Papers
on Game Theory
Issue of 2016‒09‒18
seventeen papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Truth-Tracking Judgment Aggregation Over Interconnected Issues By Irem Bozbay
  2. Impulsive Behavior in Competition: Testing Theories of Overbidding in Rent-Seeking Contests By Sheremeta, Roman
  3. Convexity of Network Restricted Games Induced by Minimum Partitions By Alexandre Skoda
  4. Information and Preferences in Matching Mechanisms By Li Chen
  5. Vertical conflict of interest and horizontal inequities By Sémirat, S.
  6. A Bayesian implementable social choice function cannot be implemented by a direct mechanism By Wu, Haoyang
  7. The Category of Node-and-Choice Preforms for Extensive-Form Games By Peter A. Streufert
  8. A Bayesian implementable social choice function may not be truthfully implementable By Wu, Haoyang
  9. Measuring and decomposing the distance to the Shapley wage function with limited data By Aguiar, Victor; Pongou, Roland; Tondji, Jean-Baptiste
  10. Network economics and the environment: insights and perspectives By Sergio Currarini; Carmen Marchiori; Alessandro Tavoni
  11. Optimal Transfers in Noncooperative Games By Pradeep Dubey; Siddhartha Sahi
  12. Coalition Preclusion Contracts and Moderate Policies By Gersbach, Hans; Schneider, Maik; Tejada, Oriol
  13. Preferences for truth-telling By Johannes Abeler; Daniele Nosenzo; Collin Raymond
  14. Money and Status: How Best to Incentivize Work By Pradeep Dubey; John Geanakoplos
  15. Competition for the access to and use of information in networks By Philipp Möhlmeier; Agnieszka Rusinowska; Emily Tanimura
  16. VALUES FOR ENVIRONMENTS WITH EXTERNALITIES – THE AVERAGE APPROACH By David Wettstein; Ines Macho-Stadler; David Perez-Castrillo
  17. Too good to be truthful: Why competent advisers are fired By Christoph Schottmüller

  1. By: Irem Bozbay (University of Surrey)
    Abstract: This paper analyses the problem of aggregating judgments over multiple interconnected issues. Voters share a common preference for reaching true collective judgments, but hold private information about what the truth might be. Information conflicts may occur both between and within voters. Following Bozbay, Dietrich and Peters (2014), we assume strategic voting in a Bayesian voting game setting and we want to determine voting rules which induces an ecient Bayesian Nash equilibrium in truthful strategies, hence lead to collective judgments that efficiently incorporate all private information. Unlike in judgment aggregation problems with two independent issues where it is always possible to aggregate information eciently, efficient information aggregation is not always possible with interconnected issues. We characterize the (rare) situations in which such rules exist, as well as the nature of these rules.
    JEL: C70 D70 D71 D80 D82
    Date: 2015–06
  2. By: Sheremeta, Roman
    Abstract: Researchers have proposed various theories to explain overbidding in rent-seeking contents, including mistakes, systematic biases, the utility of winning, and relative payoff maximization. Through an eight-part experiment, we test and find significant support for the existing theories. Also, we discover some new explanations based on cognitive ability and impulsive behavior. Out of all explanations examined, we find that impulsivity is the most important factor explaining overbidding in contests.
    Keywords: rent-seeking, contest, competition, impulsive behavior, experiments
    JEL: C72 C91 D01 D72
    Date: 2016–09–14
  3. By: Alexandre Skoda (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We consider restricted games on weighted communication graphs associated with minimum partitions. We replace in the classical definition of Myerson's graph-restricted game the connected components of any subgraph by the sub-components corresponding to a minimum partition. This minimum partition P min is induced by the deletion of the minimum weight edges. We provide necessary conditions on the graph edge-weights to have inheritance of convexity from the underlying game to the restricted game associated with P min. Then we establish that these conditions are also sufficient for a weaker condition, called F-convexity, obtained by restriction of convexity to connected subsets. Moreover we show that Myerson's game associated to a given graph G can be obtained as a particular case of the P min-restricted game for a specific weighted graph G ′. Then we prove that G is cycle-complete if and only if a specific condition on adjacent cycles is satisfied on G ′ .
    Keywords: restricted game,partitions,communication networks,cooperative game
    Date: 2016–03
  4. By: Li Chen
    Abstract: This thesis consists of three independent essays on the design of matching markets, with a primary goal to understand how information interacts with matching mechanisms especially in the applications to school choice and college admissions. The first chapter compares theoretically the non-strategyproof Boston mechanism and the strategy-proof deferred acceptance mechanism when taking into account that students may face uncertainty about their own priorities when submitting preferences, one important variation from the complete information assumption. The second chapter evaluates the effectiveness of a strategy-proof mechanism when students have to submit preferences before knowing their priorities using both theory and data. The third chapter turns attention to a new mechanism that is sequentially implemented and can encourage truth-telling. Nevertheless, such implementation often faces time constraint. This chapter therefore offers an inquiry of the pros and cons of the time-constrained sequential mechanism.
    Keywords: market design; school choice; information design; college admissions
    Date: 2016–08–29
  5. By: Sémirat, S.
    Abstract: We analyze a cheap talk game, à la Crawford and Sobel, in a two dimensional framework, with uniform prior, quadratic preferences and binary signaling rule. Credible information is revealed from the Sender to the Receiver when the conflict of interest vanishes through the alternative issues. The literature has focused on symmetrical equilibria and their sustainability upon limited exogenous asymmetry in preferences. We exhibit a second type of equilibrium, with endogenous asymmetry with respect to the revealed information. This type of equilibrium occurs with or without conflict of interest between the players, and is introduced by the multi-dimensionality. However, the conflict of interest conditions the design of decisions and their intrinsic meaning. Finally, we derive the existence of an influential equilibria for any conflict of interest.
    JEL: D82 D84 D63
    Date: 2016
  6. By: Wu, Haoyang
    Abstract: The revelation principle is a fundamental theorem in many economics fields such as game theory, mechanism design and auction theory etc. In this paper, I construct an example to show that a social choice function which can be implemented in Bayesian Nash equilibrium by an indirect mechanism cannot be implemented by a direct mechanism. The key point is that agents pay cost in the indirect mechanism, but pay nothing in the direct mechanism. As a result, the revelation principle does not hold at all.
    Keywords: Revelation principle; Game theory; Mechanism design; Auction theory
    JEL: D70 D82
    Date: 2016–09–11
  7. By: Peter A. Streufert (University of Western Ontario)
    Abstract: It would be useful to have a category of extensive-form games whose isomorphisms specify equivalences between games. Since working with entire games is too large a project for a single paper, I begin here with preforms, where a “preform” is a rooted tree together with choices and information sets. My first contribution is to introduce a compact preform specification called a “node-and-choice” preform. This specification’s compactness allows me to introduce tractable morphisms which map one node-and-choice preform to another. I incorporate these morphisms into a category called the “category of node-and-choice preforms”. Finally, I characterize the isomorphisms of this category.
    Date: 2016
  8. By: Wu, Haoyang
    Abstract: The revelation principle is a fundamental theorem in many economics fields such as game theory, mechanism design and auction theory etc. In this paper, I construct an example to show that a social choice function which can be implemented in Bayesian Nash equilibrium is not truthfully implementable. The key point is that agents pay cost in the indirect mechanism, but pay nothing in the direct mechanism. As a result, the revelation principle may not hold when agent's cost cannot be neglected in the indirect mechanism.
    Keywords: Revelation principle; Game theory; Mechanism design; Auction theory
    JEL: D70
    Date: 2016–09–11
  9. By: Aguiar, Victor; Pongou, Roland; Tondji, Jean-Baptiste
    Abstract: We study the Shapley wage function, a wage scheme in which a worker's pay depends both on the number of hours worked and on the output of the firm. We then provide a way to measure the distance of an arbitrary wage scheme to this function in limited datasets. In particular, for a fixed technology and a given supply of labor, this distance is additively decomposable into violations of the classical axioms of efficiency, equal treatment of identical workers, and marginality. The findings have testable implications for the different ways in which popular wage schemes violate basic properties of distributive justice in market organizations. Applications to the linear contract and to other well-known compensation schemes are shown.
    Keywords: Shapley wage function, firm, fairness violations, linear contract, bargaining, limited data
    JEL: C71 C78 D20 D30 J30
    Date: 2016–08–30
  10. By: Sergio Currarini; Carmen Marchiori; Alessandro Tavoni
    Abstract: Local interactions and network structures appear to be a prominent feature of many environmental problems. This paper discusses a wide range of issues and potential areas of application, including the role of relational networks in the pattern of adoption of green technologies, common pool resource problems characterized by a multiplicity of sources, the role of social networks in multi-level environmental governance, infrastructural networks in the access to and use of natural resources such as oil and natural gas, the use of networks to describe the internal structure of inter-country relations in international agreements, and the formation of bilateral “links” in the process of building up an environmental coalition. For each of these areas, we examine why and how network economics would be an effective conceptual and analytical tool, and discuss the main insights that we can foresee.
    Keywords: networks; environmental externalities; technological diffusion; gas pipelines; common-pool-resources; multi-level governance; coalitions
    JEL: N0
    Date: 2015–09
  11. By: Pradeep Dubey; Siddhartha Sahi
    Date: 2016
  12. By: Gersbach, Hans; Schneider, Maik; Tejada, Oriol
    Abstract: We examine the effects of a novel political institution called Coalition Preclusion Contracts (CPCs) on the functioning of democracies with proportional representation. CPCs enable political parties to credibly exclude one or several parties from the range of coalitions they are prepared to envisage after elections. We consider a simple political game with a two-dimensional policy space in which three parties compete to form the government. We find that CPCs with a one-party exclusion rule defend the interests of the majority by precluding coalition governments that would include so-called extreme parties. This translates into moderation of the policies implemented and yields welfare gains for a large set of parameter values. We discuss the robustness of the results in more general settings and study how party-exclusion rules have to be adjusted when more than three parties compete in an election.
    Keywords: coalition formation; elections; government formation.; political contracts
    JEL: D72 D82 H55
    Date: 2016–09
  13. By: Johannes Abeler (University of Oxford, IZA and CESifo); Daniele Nosenzo (University of Nottingham, School of Economics); Collin Raymond (Amherst College)
    Abstract: We study information conditions under which individuals are willing to delegate their sanctioning power to a central authority. We design a public goods game in which players can move between institutional environments, and we vary the observability of others' contributions. We find that the relative popularity of centralized sanctioning crucially depends on the interaction between the observability of the cooperation of others and the absence of punishment targeted at cooperative individuals. While central institutions do not outperform decentralized sanctions under perfect information, large parts of the population are attracted by central institutions that rarely punish cooperative individuals in environments with limited observability.
    Keywords: centralized sanctions, cooperation, experiment, endogenous institutions
    Date: 2016
  14. By: Pradeep Dubey; John Geanakoplos
    Date: 2016
  15. By: Philipp Möhlmeier (BiGSEM - Bielefeld University - Center for Mathematical Economics); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Emily Tanimura (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In a network formation framework, where payoffs reflect an agent's ability to access information from direct and indirect contacts, we integrate negative externalities due to connectivity associated with two types of effects: competition for the access to information, and rivalrous use of information. We consider two separate models to capture the first and the second situations, respectively. In the first model, we assume that information is a non-rivalrous good but that there is competition for the access to information, for example because an agent with many contacts must share his time between them and thus has fewer opportunities to pass on information to each particular contact. The main idea is that the probability that each neighbor receives the information decreases with the number of contacts the sender has. In the second model, we assume that there is not competition for the access to information but that the use of information is rivalrous. In this case, it is assumed that when people receive the information before me, the harmful effect is greater than when others receive the information at the same time as myself. Our results concern pairwise stability and efficiency in both models and allow us to compare and contrast the effects of two kinds of competition for information.
    Abstract: Dans un cadre de formation de réseau, où les gains reflètent la capacité d'un agent pour accéder aux informations de contacts directs et indirects, nous intégrons des externalités négatives dues à la connectivité associé à deux types d'effets : la concurrence pour l'accès à l'information, et l'utilisation de la rivalité de l'information. Nous considérons deux modèles distincts pour capturer la première et la seconde situation, respectivement. Dans le premier modèle, nous supposons que l'information est un bien non-rivalité, mais qu'il existe une concurrence pour l'accès à l'information, par exemple en raison d'un agent avec de nombreux contacts qui doit partager son temps entre eux et a donc moins d'occasions de transmettre des informations à chaque contact. L'idée principale est que la probabilité que chaque voisin reçoit l'information diminue avec le nombre de contacts qu'a l'expéditeur. Dans le second modèle, nous supposons qu'il n'y a pas de concurrence pour l'accès à l'information, mais que l'utilisation de l'information est compétitive. En outre, il est supposé que les personnes qui reçoivent l'information avant moi ont un effet plus néfaste sur mon utilité que les personnes qui reçoivent l'information en même temps que moi. Nos résultats concernent la stabilité par paire et l'efficacité dans les deux modèles et nous permettent de comparer et contraster les effets de deux types de concurrence pour obtenir des informations.
    Keywords: network formation,connections model,negative externalities,pairwise stability,efficiency,formation de réseaux,modèle des connexions,information,externalités négatives,stabilité,efficacité
    Date: 2016–04
  16. By: David Wettstein (BGU); Ines Macho-Stadler (Universitat Autonoma de Barcelona and Barcelona GSE); David Perez-Castrillo (Universitat Autonoma de Barcelona and Barcelona GSE)
    Keywords: Externalities, Sharing the surplus, Average Approach
    JEL: D62 C71
    Date: 2016
  17. By: Christoph Schottmüller (Department of Economics, University of Copenhagen)
    Abstract: A decision maker repeatedly asks an adviser for advice. The adviser is either competent or incompetent and his preferences are not perfectly aligned with the decision maker's preferences. Over time the decision maker learns about the adviser's type and fires him if he is likely to be incompetent. If the adviser's reputation for being competent improves, it is more attractive for him to push his own agenda because he is less likely to be fired for incompetence. Consequently, competent advisers are also fired with positive probability. Firing is least likely if the decision maker is unsure about the adviser's type.
    Keywords: advice, cheap talk, reputation
    JEL: C73 D83 G24
    Date: 2016–09–12

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