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on Game Theory |
| By: | Leonardo Becchetti (DEF & CEIS University of Rome Tor Vergata); Maurizio Fiaschetti (SOAS University of London); Francesco Salustri (DEF University of Rome Tor Vergata) |
| Abstract: | We simulate in a randomised lab experiment the effect of Cash Mobs on consumers’ behaviour in an original variant of the multiplayer Prisoner’s dilemma called Vote-with-the-Wallet Game (VWG). The effect is modelled in a sequential game with/without an environmental frame in which a subset of players (cash-mobbers) is given the opportunity to reveal publicly (in aggregate without disclosing individual identities) their cooperation decision. We find that the treatment has a positive gross effect, that is, the share of cooperators is significantly higher in treated sessions and this is mainly due to the higher share of cooperators among cash-mobbers. Our results suggest that cash mobs-like mechanisms can help to solve social dilemmas with entirely private solutions (not based on punishment but on positive action) without costs for government budgets. |
| Keywords: | vote with the wallet, prisoner’s dilemma, randomised experiment |
| JEL: | C72 C73 C91 M14 |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:401&r=gth |
| By: | Michail Anthropelos; Constantinos Kardaras |
| Abstract: | The large majority of risk-sharing transactions involve few agents, each of whom can heavily influence the structure and the prices of securities. In this paper, we propose a game where agents’ strategic sets consist of all possible sharing securities and pricing kernels that are consistent with Arrow–Debreu sharing rules. First, it is shown that agents’ best response problems have unique solutions. The risk-sharing Nash equilibrium admits a finite-dimensional characterisation, and it is proved to exist for an arbitrary number of agents and to be unique in the two-agent game. In equilibrium, agents declare beliefs on future random outcomes different from their actual probability assessments, and the risk-sharing securities are endogenously bounded, implying (among other things) loss of efficiency. In addition, an analysis regarding extremely risk-tolerant agents indicates that they profit more from the Nash risk-sharing equilibrium than compared to the Arrow–Debreu one. |
| JEL: | C72 G12 L13 |
| Date: | 2017–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69767&r=gth |
| By: | Francesco Caruso (Università di Napoli Federico II); Maria Carmela Ceparano (Università di Napoli Federico II); Jacqueline Morgan (Università di Napoli Federico II and CSEF) |
| Abstract: | The literature results about existence of Nash equilibria in continuous potential games (Monderer and Shapley, 1996) exploits the property that any maximum point of the potential function is a Nash equilibrium of the game (the vice versa being not true) and those about uniqueness use strict concavity of the potential function. Therefore, the following question arises: can we find sufficient conditions on the data of the game which guarantee one and only one Nash equilibrium when existence of a maximum of the potential function is not ensured and the potential function in not strictly concave? The paper positively answers this question for two-player weighted potential games when the strategy sets are not bounded sets of not necessarily finite dimensional spaces. Significative examples infinite dimensional spaces are provided, together with an application in infinite dimensional ones. |
| Keywords: | Non-cooperative game; weighted potential game; uniqueness of Nash equilibrium; fixed point. |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:471&r=gth |
| By: | Charoensook, Banchongsan |
| Abstract: | The paper of Charoensook ((2015), [3]) extends the results of the original model of two-way flow information sharing network of Bala and Goyal ((2000),[1]), given that a condition called Uniform Partner Ranking is satisfied. In this technical note, we study what happen to these results when this condition is violated. By providing some examples, we conclude that a certain degree of agent homogeneity needs to exist in order that the results of [3] remains satisfied. |
| Keywords: | Network Formation, Strict Nash Network, Two-way Flow Network, Branching Network, Agent Heterogeneity,Information Network |
| JEL: | C72 D85 |
| Date: | 2017–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77961&r=gth |
| By: | Hörner, Johannes; Takahashi, Satoru |
| Keywords: | Repeated games, rates of convergence. |
| JEL: | C72 C73 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31602&r=gth |
| By: | Yola Engler; Lionel Page |
| Abstract: | We investigate the haggling process in bargaining. Using an experimental bargaining game, we find that a first offer has a significant impact on the bargaining outcome even if it is costless to reject. First offers convey information on the player's reservation value induced by his social preferences and they are most often accepted when they are not above the equal split. However, offers which request much more than the equal split induce punishing counter-offers triggered by the responder's social preferences. The bargaining outcome is therefore critically influenced by the balance of toughness and kindness signalled through the offers made in the haggling phase. |
| JEL: | C70 C91 D63 D64 |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:qut:qubewp:wp051&r=gth |
| By: | Bonatti, Alessandro; Hörner, Johannes |
| Abstract: | We analyze strategic experimentation in which information arrives through fully revealing, publicly observable “breakdowns.” When actions are hidden, there exists a unique symmetric equilibrium that involves randomization over stopping times. With two players, this is the unique equilibrium. Randomization leads to dispersion in actions and to belief disagreement on the equilibrium path. The resulting lack of coordination has significant welfare consequences. In contrast, when actions are observable, the equilibrium is pure and welfare improves. |
| Keywords: | Experimentation, free-riding, mixed strategies, monitoring, delay. |
| JEL: | C73 D83 O33 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31600&r=gth |
| By: | Gao, Lin |
| Abstract: | This paper explores the evolution of interaction and cooperation supported by individuals’ changing trust and trustworthiness on directed weighted regular ring though agent-based modeling. This agent-based model integrates fragility of trust, interaction decision, strategy decision, payoff matrix decision, interaction density and information diffusion. Marginal rate of exploitation of original payoff matrix and relative exploitation degree between the original and mutated payoff matrices are stressed in trust updating; influence of observing is introduced via imagined strategy; relation is maintained through relation maintenance strength. The impact of degree of embeddedness in social network, mutation probability of payoff matrix, mutated payoff matrix, proportion of high trust agents and probabilities of information diffusion within neighborhood and among non-neighbors on the sum of number of actual interaction and cooperation of all agents are probed on the base of a baseline simulation, respectively. Under the experimental design and parameter values selection in this paper, it is found that basically as degree of embeddedness in social network, proportion of high trust agents and probability of information diffusion in neighbors increase, as mutation probability of payoff matrix, conflict in mutated payoff matrix and probability of information diffusion in non-neighbors decrease, interaction and cooperation perform better. |
| Keywords: | Trust, directed weighted regular ring, agent-based modeling, evolution of cooperation |
| JEL: | B52 C63 D82 D85 |
| Date: | 2017–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78428&r=gth |
| By: | Kene Boun My (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Camille Cornand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Rodolphe Dos Santos Ferreira (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | In Keynes' beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty. Abstract In Keynes' beauty contest, agents make evaluations reflecting both an expected fun |
| Keywords: | dispersed information,public information,beauty contest,coordination,experiment |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01485677&r=gth |
| By: | Azacis, Helmuts (Cardiff Business School) |
| Abstract: | I study a sequential first-price auction where two items are sold to two bidders with private binary valuations. A seller, prior to the second auction, can publicly disclose some information about the outcome of the first auction. I characterize equilibrium strategies for various disclosure rules when the valuations of bidders are either perfectly positively or perfectly negatively correlated across items. I establish outcome equivalence between di erent disclosure rules. I find that it is optimal for the seller to disclose some information when the valuations are negatively correlated, whereas it is optimal not to disclose any information when the valuations are positively correlated. For most of the parameter values, the seller's revenue is higher if the losing bid is disclosed. When only the winner's identity is disclosed, the equilibrium is efficient whether the valuations are positively or negatively correlated. |
| Keywords: | Efficiency; Information disclosure; Seller's revenue; Sequential first-price auction |
| JEL: | D44 D47 D82 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2017/2&r=gth |
| By: | Mongin, Philippe |
| Abstract: | Abstract: The paper has a twofold aim. On the one hand, it provides what appears to be the first game-theoretic modelling of Napoléon’s last campaign, which ended dramatically on 18 June 1815 at Waterloo. It is specifically concerned with the decision Napoléon made on 17 June 1815 to detach part of his army and send it against the Prussians, whom he had defeated, though not destroyed, on 16 June at Ligny. Military strategists and historians agree that this decision was crucial but disagree about whether it was rational. Hypothesizing a zero-sum game between Napoléon and Blücher, and computing its solution, we show that dividing his army could have been a cautious strategy on Napoléon’s part, a conclusion which runs counter to the charges of misjudgment commonly heard since Clausewitz. On the other hand, the paper addresses some methodological issues relative to “analytic narratives”. Some political scientists and economists who are both formally and historically minded have proposed to explain historical events in terms of properly mathematical game-theoretic models. We liken the present study to this “analytic narrative” methodology, which we defend against some of objections that it has aroused. Generalizing beyond the Waterloo case, we argue that military campaigns provide an especially good opportunity for testing this new methodology. |
| Keywords: | Keywords: Napoléon, Waterloo, military history, rational choice theories, game theory, zero-sum two-person games, analytical narrative |
| JEL: | B49 C72 N43 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78029&r=gth |