
on Game Theory 
By:  Olaizola Ortega, María Norma; Valenciano Llovera, Federico 
Abstract:  We develop a networkformation model where the quality of a link depends on the amount invested in it and is determined by a linkformation "technology" , an increasing strictly concave function which is the only exogenous ingredient in the model. The revenue from the investments in links is the information that the nodes receive through the network. Two approaches are considered. First, assuming that the investments in links are made by a planner, the basic question is that of the efficient investments, either relative to a given infrastructure (i.e. a set of feasible links) or in absolute terms. It is proved that efficient networks belong to a special class of weighted nested split graph networks. Second, assuming that links are the result of investments of the nodeplayers involved, there is the question of stability in the underlying networkformation game, be it restricted to a given infrastructure or unrestricted. Necessary and sufficient conditions for stability of the complete and star networks, and nested split graph networks in general, are obtained. 
Keywords:  network, formation, efficiency, stability, nested, core, periphery, split, graphs 
JEL:  A14 C72 D85 
Date:  2016–08–18 
URL:  http://d.repec.org/n?u=RePEc:ehu:ikerla:19437&r=gth 
By:  Michael R. Powers (Tsinghua University); Martin Shubik (Cowles Foundation, Yale University); Wen Wang (Nankai University) 
Abstract:  We offer a detailed examination of a broad class of 2 x 2 matrix games as a first step toward considering measures of resource distribution and efficiency of outcomes. In the present essay, only noncooperative equilibria and entropic outcomes are considered, and a crude measure of efficiency employed. Other solution concepts and the formal construction of an efficiency index will be addressed in a companion paper. 
Keywords:  2 × 2 matrix games, efficiency, coordination, worth of coordination 
JEL:  C63 C72 D61 
Date:  2016–10 
URL:  http://d.repec.org/n?u=RePEc:cwl:cwldpp:2039r&r=gth 
By:  Matias Nunez (Thema, Université de CergyPontoise  THEMA  Théorie économique, modélisation et applications  Université de Cergy Pontoise  CNRS  Centre National de la Recherche Scientifique); JeanFrançois Laslier (PSE  ParisJourdan Sciences Economiques  CNRS  Centre National de la Recherche Scientifique  INRA  Institut National de la Recherche Agronomique  EHESS  École des hautes études en sciences sociales  ENS Paris  École normale supérieure  Paris  École des Ponts ParisTech (ENPC), PSE  Paris School of Economics) 
Abstract:  The paper considers twoperson bargaining under Approval Voting. It first proves the existence of pure strategy equilibria. Then it shows that this bargaining method ensures that both players obtain at least their average and median utility level in equilibrium. Finally it proves that, provided that the players are partially honest, the mechanism triggers sincerity and ensures that no alternative Pareto dominates the outcome of the game. 
Keywords:  Twoagents,Approval Voting,Efficiency,Partial Honesty 
Date:  2015–06 
URL:  http://d.repec.org/n?u=RePEc:hal:wpaper:halshs01168675&r=gth 
By:  Ariane LambertMogiliansky (PSE  ParisJourdan Sciences Economiques  CNRS  Centre National de la Recherche Scientifique  INRA  Institut National de la Recherche Agronomique  EHESS  École des hautes études en sciences sociales  ENS Paris  École normale supérieure  Paris  École des Ponts ParisTech (ENPC), PSE  Paris School of Economics); Ismael MartinezMartinez (DUCE  Dusseldorf Institute for Competition Economics  HeinrichHeineUniversität Düsseldorf [Düsseldorf]) 
Abstract:  We develop a framework for the analysis of strategic interactions under the constructive preference perspective à la Kahneman and Tversky formalized in the Type Indeterminacy model. The players are modeled as systems subject to measurements and characterized by quantumlike uncertain preferences. The decision nodes are modeled as, possibly noncommuting, operators that measure preferences modulo strategic reasoning. We define a Hilbert space of types spanned by the players' eigentypes representing their potential preferences in different situations. We focus on pure strategy TI games of maximal information where all uncertainty stems from the intrinsic indeterminacy of preferences. We show that preferences evolve in a nondeterministic manner with actions along the play: they are endogenous to the interaction. We propose the notion of cashingonthego to compute a player's utility, and the Type Indeterminate Nash Equilibrium as a solution concept relying on bestreplies at the level of the eigentypes. We illustrate an example exhibiting the phenomenon of the manipulation of rivals' preferences. 
Keywords:  Hilbert space of types,Type Indeterminacy,Superposition of preferences,Actions as projections,Cashingonthego,Type Indeterminate Nash Equilibrium 
Date:  2014–12 
URL:  http://d.repec.org/n?u=RePEc:hal:wpaper:hal01095472&r=gth 
By:  Morone, Andrea; Temerario, Tiziana 
Abstract:  We analysed dyads strategies in oneshot public goods game. By means of a laboratory experiment, using a variant of the strategymethod, we found that more than one third of the dyads are conditional cooperators, whereas 18% can be categorised as free riders. 
Keywords:  Voluntary contributions; Conditional cooperation; Free riding; Strategymethod; Experiments; 
JEL:  C91 C92 H41 
Date:  2016–10 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:74732&r=gth 
By:  John Kennes (Department of Economics and Business Economics, Aarhus University, Denmark); Daniel le Maire (Department of Economics, University of Copenhagen, Denmark) 
Abstract:  This paper considers equilibrium proposals by either buyers or sellers in the canonical ‘urnball’ matching market. The proposals can either be posted prices announced by buyers; posted prices announced by sellers; or announcements by sellers (or by buyers) to entertain price proposals, as in auctions. We derive the expected revenue equivalence of these different modes of proposing in this canonical trading environment. 
Keywords:  Matching, pricing, frictions 
JEL:  D44 C78 D83 
Date:  2016–10–25 
URL:  http://d.repec.org/n?u=RePEc:aah:aarhec:201610&r=gth 
By:  Pongou, Roland; Tondji, JeanBaptiste 
Abstract:  We consider the problem of valuing inputs in a production environment in which input supply is uncertain. Inputs can be workers in a firm, risk factors for a disease, securities in a financial market, or nodes in a networked economy. Each input takes its values from a finite set, and uncertainty is modeled as a probability distribution over this set. First, we provide an axiomatic solution to our valuation problem, defining three intuitive axioms which we use to uniquely characterize a valuation scheme that we call the a priori Shapley value. Second, we solve the problem of valuing inputs a posteriorithat is, after observing output. This leads to the Bayesian Shapley value. Third, we consider the problem of rationalizing uncertainty when the inputs are rational workers supplying labor in a noncooperative production game in which payoffs are given by the Shapley wage function. We find that probability distributions over labor supply that can be supported as mixed strategy Nash equilibria always exist. We also provide an intuitive condition under which we prove the existence of a pure strategy Nash equilibrium. We present several applications of our theory to reallife situations. 
Keywords:  Input valuation, uncertainty, a priori Shapley value, Bayesian Shapley value, rationalizability 
JEL:  C70 D20 D80 J30 
Date:  2016–10–25 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:74747&r=gth 
By:  Sofía Correa; Juan Pablo TorresMartínez 
Abstract:  We characterize the existence and the essential stability of Weak ParetoNash and ParetoNash equilibria in multiobjective generalized games with a continuum of players. 
Date:  2016–09 
URL:  http://d.repec.org/n?u=RePEc:udc:wpaper:wp430&r=gth 
By:  Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki 
Abstract:  This study examines the properties of equilibrium, including the stability, of discretespace agglomeration models with social interactions. The findings reveal that while the corresponding continuousspace model has a unique equilibrium, the equilibrium in discrete space can be nonunique for any finite degree of discretization by characterizing the discretespace model as a potential game. Furthermore, it indicates that despite the above result, any sequence of discretespace models' equilibria converges to the continuousspace model's unique equilibrium as the discretization of space is refined. 
Keywords:  Social interaction; Agglomeration; Discrete space; Potential game; Stability; Evolutionary game theory 
JEL:  C62 C72 C73 D62 R12 
Date:  2016–10–23 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:74713&r=gth 
By:  Alexandre Skoda (CES  Centre d'économie de la Sorbonne  UP1  Université PanthéonSorbonne  CNRS  Centre National de la Recherche Scientifique) 
Abstract:  Let G = (N,E,w ) be a weighted communication graph (with weight function w on E ). For every subset A ⊆ N, we delete in the subset E (A ) of edges with ends in A, all edges of minimum weight in E (A ). Then the connected components of the corresponding induced subgraph constitue a partition of A that we Pmin(A ). For every game (N , v ), we define the Pminrestricted game (N , v ) by v (A = ∑F∈ Pmin (A) v(F ) for all A ⊆ N. We prove that we can decide in polynomial time if there is inheritance of Fconvexity from N , v ) to the Pminrestricted game (N , v ) where Fconvexity is obtained by restricting convexity to connected subsets 
Keywords:  graph, complexity, supermodularity, partitions,communication networks, cooperative game, convex game,restricted game 
Date:  2016–07 
URL:  http://d.repec.org/n?u=RePEc:hal:cesptp:halshs01382502&r=gth 
By:  Gallo Fernández, Ohiane; Iñarra García, Elena 
Keywords:  hedonic, games, rationing, problems, core, satbility 
JEL:  C71 D63 D79 
Date:  2016–10–05 
URL:  http://d.repec.org/n?u=RePEc:ehu:ikerla:19435&r=gth 
By:  Batabyal, Amitrajeet; Yoo, Seung Jick 
Abstract:  In this note we study a simple game model of effort application by two individuals (1 and 2) who wish to have an arranged marriage. We first specify the net utility function of individual i as a function of this individual’s own effort and the effort applied by individual j,i≠j, in three distinct cases. Next, we compute the ith individual’s best response function. Finally, we analyze effort application by two identical pairs of individuals who are located in two different nations. In the first (second) nation, arranged marriages are uncommon (common) and hence it is relatively difficult (straightforward) for the two individuals to apply and coordinate effort. We explain why the net utility of the pair wishing to have an arranged marriage in the first nation is likely to be much lower than the corresponding net utility of the pair in the second nation. 
Keywords:  Arranged Marriage, Effort, Net Utility, Static Game, Strategic Complements 
JEL:  D13 J12 
Date:  2016–03–19 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:74745&r=gth 