nep-gth New Economics Papers
on Game Theory
Issue of 2017‒03‒05
seven papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Action revision, information and collusion in an experimental duopoly market By Roy, Nilanjan
  2. A simple dynamic climate cooperation model By Schmidt, Robert; Kovac, Eugen
  3. Signaling Cooperation By Heinz, Matthias; Schumacher, Heiner
  4. Contests on Networks By David Michael Rietzke; Alexander Matros
  5. Simplifying the Kohlberg Criterion on the Nucleolus: A Disproof by Oneself By Meinhardt, Holger Ingmar
  6. Acyclic Gambling Games By Laraki, Rida; Renault, Jérôme
  7. A generalized public goods game with coupling of individual ability and project benefit By Li-Xin Zhong; Wen-Juan Xu; Yun-Xin He; Chen-Yang Zhong; Rong-Da Chen; Tian Qiu; Yong-Dong Shi

  1. By: Roy, Nilanjan
    Abstract: We report on an experiment designed to study a dynamic model of quantity competition where firms continuously revise their production targets prior to the play of the "one-shot" game. We investigate how the observability of rival firm's plans and the technology for implementation of revised actions affect market competitiveness. Under a real-time revision game where payoffs are determined only by the quantities prepared at the end, play converges to the Cournot-Nash output when rival's plans are unobservable. If plans cannot be hidden from competitors, choices are even more competitive than the static Nash equilibrium, thereby showing a negative value of information with lower profits. With stochastic revision, where opportunities to revise arrive according to a Poisson process and the quantities selected at the last opportunity are implemented, collusion is much frequent. This shows, more generally, that cooperation can be observed even when individuals interact only once.
    Keywords: Cournot duopoly, real-time revision, stochastic revision, experiment, information, imitation, best response
    JEL: C72 C92 D22 D43 D83 L13
    Date: 2017–02–23
  2. By: Schmidt, Robert; Kovac, Eugen
    Abstract: A standard result from the game theoretic literature on international environmental agreements is that coalitions are either `broad but shallow' or `narrow but deep'. Hence, the stable coalition size is small when the potential welfare gains are large. We modify a standard climate coalition game by adding a - seemingly - small but realistic feature: we allow countries to delay climate negotiations until the next `round' if a coalition forms but decides to remain inactive. It turns out that results are surprisingly different under this modification. In particular, a large coalition with deep emissions cuts forms if countries are sufficiently patient. Our results also indicate that countries should try hard to overcome coordination problems in the formation of a coalition. A more cooperative outcome may then be reached, and it may be reached more quickly.
    JEL: D62 F53 Q54
    Date: 2016
  3. By: Heinz, Matthias; Schumacher, Heiner
    Abstract: We examine what an applicant’s vita signals to potential employers about her willingness to cooperate in teams. Intensive social engagement may credibly reveal that an applicant cares about the well‐being of others and therefore is less likely to free‐ride in teamwork situations. We find that contributions in a public goods game strongly increase in a subject’s degree of social engagement as indicated on her résumé (and rated by an independent third party). Engagement in other domains, such as student or sports associations, is not positively correlated with contributions. In a prediction experiment with human resource managers from various industries, we find that managers use résumé content effectively to predict relative differences in subjects’ willingness to cooperate. Thus, young professionals signal important behavioral characteristics to potential employers through the choice of their extracurricular activities.
    JEL: C72 C92 D82
    Date: 2016
  4. By: David Michael Rietzke; Alexander Matros
    Abstract: We develop a model of contests on networks. Each player is "connected" to a set of contests, and exerts a single effort to increase the probability of winning each contest to which she is connected. We characterize equilibria under both the Tullock and all-pay auction contest success functions (CSFs), and show that many well-known results from the contest literature can be obtained by varying the structure of the network. We also obtain a new exclusion result: We show that, under both CSFs, equilibrium total effort may be higher when one player is excluded from the network. This finding contrasts the existing literature, which limits findings of this sort to the all-pay auction CSF. Our framework has a broad range of applications, including research and development, advertising, and research funding.
    Keywords: Network Games, Contests, Bipartite Graph, Tullock Contest, All-pay Auction
    JEL: C72 D70 D85
    Date: 2017
  5. By: Meinhardt, Holger Ingmar
    Abstract: (Nguyen 2016) claimed that he has developed a simplifying set of the Kohlberg criteria that involves checking the balancedness of at most (n-1) sets of coalitions. This claim is not true. Analogous to Nguyen and Thomas (2016), he has incorrectly applied the indirect proof. He established in his purported proofs of the main results that a truth implies a falsehood. This is a wrong statement and such a hypotheses must be rejected (cf. Meinhardt (2015,2016a,2016b)). Executing a logical correct interpretation ought immediately lead him to the conclusion that his proposed algorithms are deficient. In particular, he had to detect that the imposed balancedness requirement on the test condition within his proposed methods cannot be appropriate. As a consequence, either a nucleolus with a weakly balanced set will be dismissed by the implemented algorithms or a solution which is not a nucleolus will be selected as a nucleolus. Hence, one cannot expect that one of these algorithms makes a correct selection. The supposed algorithms are wrongly designed and cannot be set in any relation with Kohlberg.
    Keywords: Transferable Utility Game, Nucleolus, Balancedness, Kohlberg Criteria; Convexity; Affine Hull; Propositional Logic; Circular Reasoning (circulus in probando); Indirect Proof; Proof by Contradiction
    JEL: C71
    Date: 2017–02–26
  6. By: Laraki, Rida; Renault, Jérôme
    Date: 2017–02
  7. By: Li-Xin Zhong; Wen-Juan Xu; Yun-Xin He; Chen-Yang Zhong; Rong-Da Chen; Tian Qiu; Yong-Dong Shi
    Abstract: Facing a heavy task, any single person can only make a limited contribution and team cooperation is needed. As one enjoys the benefit of the public goods, the potential benefits of the project are not always maximized and may be partly wasted. By incorporating individual ability and project benefit into the original public goods game, we study the coupling effect of the four parameters, the upper limit of individual contribution, the upper limit of individual benefit, the needed project cost and the upper limit of project benefit on the evolution of cooperation. Coevolving with the individual-level group size preferences, an increase in the upper limit of individual benefit promotes cooperation while an increase in the upper limit of individual contribution inhibits cooperation. The coupling of the upper limit of individual contribution and the needed project cost determines the critical point of the upper limit of project benefit, where the equilibrium frequency of cooperators reaches its highest level. Above the critical point, an increase in the upper limit of project benefit inhibits cooperation. The evolution of cooperation is closely related to the preferred group-size distribution. A functional relation between the frequency of cooperators and the dominant group size is found.
    Date: 2017–02

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