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on Game Theory |
| By: | Lionel Richefort (Université de Nantes, LEMNA) |
| Abstract: | This paper explores a voluntary contribution game in the presence of warm-glow effects. There are many public goods and each public good benefits a different group of players. The structure of the game induces a bipartite network structure, where players are listed on one side and the public good groups they form are listed on the other side. The main result of the paper shows the existence and uniqueness of a Nash equilibrium. The unique Nash equilibrium is also shown to be locally asymptotically stable. Then the paper provides some comparative statics analysis regarding pure redistribution, taxation and subsidies. It appears that small redistributions of wealth may sometimes be neutral, but generally, the effects of redistributive policies depend on how public good groups are related in the contribution network structure. |
| Keywords: | Multiple Public Goods, Warm-glow Effects, Bipartite Contribution Structure, Nash Equilibrium, Comparative Statics |
| JEL: | C72 D64 H40 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.32&r=gth |
| By: | Ensthaler, Ludwig; Huck, Steffen; Leutgeb, Johannes |
| Abstract: | From the regulation of sports to lawmaking in parliament, in many situations one group of people ("agents") make decisions that affect payoffs of others ("principals") who may offer action-contingent transfers in order to sway the agents' decisions. Prat and Rustichini (2003) characterize pure-strategy equilibria of such Games Played Through Agents. Specifically, they predict the equilibrium outcome in pure strategies to be efficient. We test the theory in a series of experimental treatments with human principals and computerized agents. The theory predicts remarkably well which actions, and outcomes are implemented but subjects' transfer offers deviate systematically from equilibrium. We show how quantal response equilibrium accounts for the deviations and test its predictions out of sample. Our results show that quantal response equilibrium is particularly well suited for explaining behavior in such games. |
| Keywords: | games played through agents,experiment,quantal response equilibrium |
| JEL: | D44 C91 D72 D83 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016305r&r=gth |
| By: | P. Jean-Jacques Herings (Department of Economics, Maastricht University); Ana Mauleon (CEREC, Saint-Louis University and CORE, University of Louvain); Vincent Vannetelbosch (CORE, University of Louvain and CEREC, Saint-Louis University) |
| Abstract: | We study stable sets for marriage problems under the assumption that players can be both myopic and farsighted. We introduce the new notion of the myopic-farsighted stable set. For the special cases where all players are myopic and where all players are farsighted, our concept predicts the set of matchings in the core. When all men are myopic and the top choice of each man is a farsighted woman, we show that the singleton consisting of the woman-optimal stable matching is a myopic-farsighted stable set. The same result holds when all women are farsighted. |
| Keywords: | Marriage Problems, Stable Sets, Myopic and Farsighted Players |
| JEL: | C70 C78 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.34&r=gth |
| By: | Francis Bloch (Université Paris 1 and Paris School of Economics); Anne van den Nouweland (Department of Economics, University of Oregon) |
| Abstract: | This paper analyzes farsighted stable sets when agents have heterogeneous expectations over the dominance paths. We consider expectation functions satisfying two properties of path-persistence and consistency. We show that farsighted stable sets with heterogeneous expectations always exist and that any singleton farsighted stable set with common expectations is a farsighted stable set with heterogeneous expectations. We characterize singleton farsighted stable sets with heterogeneous expectations in one-to-one matching models and voting models, and show that the relaxation of the hypothesis of common expectations greatly expands the set of states that can be supported as singleton farsighted stable sets. |
| Keywords: | Farsighted Stable Sets, Heterogeneous Expectations, One-to-one Matching, Voting, Effectivity Functions |
| JEL: | C71 D72 D74 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.31&r=gth |
| By: | Evan Calford |
| Abstract: | This paper experimentally investigates the role of uncertainty aversion in normal form games. Theoretically, risk aversion will a ect the utility value assigned to realized outcomes while ambiguity aversion a ects the evaluation of strategies. In practice, however, utilities over outcomes are unobservable and the e ects of risk and ambiguity are confounded. This paper introduces a novel methodology for identifying the e ects of risk and ambiguity preferences on behavior in games in a laboratory environment. Furthermore, we also separate the e ects of a subject's beliefs over her opponent's preferences from the e ects of her own preferences. The results support the conjecture that both preferences over uncertainty and beliefs over opponent's preferences a ect behavior in normal form games. |
| Keywords: | Ambiguity Aversion, Game Theory, Experimental Economics, Preferences |
| JEL: | C92 C2 D81 D83 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1291&r=gth |
| By: | Galbiati, Roberto; Henry, Emeric; Jacquemet, Nicolas |
| Abstract: | We study how cooperation-enforcing institutions dynamically affect values and behavior using a lab experiment designed to create individual specific histories of past institutional exposure. We show that the effect of past institutions is mostly due to "indirect" behavioral spillovers: facing penalties in the past increases partners' cooperation in the past, which in turn positively affects ones' own current behavior. We demonstrate that such indirect spillovers induce persistent effects of institutions. However, for interactions that occur early on, we find a negative effect of past enforcement due to differential learning under different enforcement institutions. |
| Keywords: | Cooperation; experiments.; Laws; learning; persistence of institutions; repeated games; social values; Spillovers |
| JEL: | C73 C91 D02 K49 P16 Z1 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12128&r=gth |
| By: | Miguel Vazquez; Michelle Hallack |
| Abstract: | In Brazil, a scoring auction decides which firm has the right to explore oil and gas in a region. One of its dimensions is the amount of local content that firms are willing to implement. However, local content programs are subject to significant uncertainty and complexity so mal-adaptation costs are relevant. We characterize players’ bidding behavior when they have information on local content implementation and when they do not. We test those predictions using historical bids. Our tests suggest that the mechanism would be more efficient if the definition of local content programs was left out of the auction. |
| Keywords: | Local content; Scoring auctions; Adaptation costs; Oil and gas industry. |
| JEL: | D23 D82 H57 L14 L22 L74 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp94&r=gth |
| By: | Sonsino, Doron; Shifrin, Max; Lahav, Eyal |
| Abstract: | The willingness to trust human receivers is compared to the inclination to take lottery risk in six distinct scenarios, controlling the return distributions. Trust shows significantly smaller responsiveness to return expectations compared to parallel pure-risk lottery allocation, and paired comparisons reveal that investors sacrifice 5% of the expected payoff to trust anonymous receivers. Trust is more calculated and volatile for males, while appearing relative stable for females. The results complement the accumulating evidence regarding physiological differences between trust and risk, in addition suggesting that the trust-risk gap is larger for females. |
| Keywords: | Trust, risk, gender, ambiguity, betrayal aversion |
| JEL: | C72 C90 D80 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80095&r=gth |
| By: | Cheng-Zhong Qin (Dept. of Economics, UC Santa Barbara); Thomas Quint (Dept. of Mathematics, University of Nevada, Reno); Martin Shubik (Cowles Foundation, Yale University) |
| Abstract: | An adequate description of economic dynamics requires the introduction of a monetary system including default penalties and expectations in a society whose economy utilizes money and credit. This essay notes and discusses several of the factors involved in the use of money and credit in a process oriented economy. It links these observations with the general equilibrium treatment of the same underlying economy and formulates a government guidance game where the government sets several key parameters in a monetary economy sufficient to select a unique equilibrium. Low information and error correction are noted. The links to the first and second welfare theorems of GE are also considered as is the setting of the price level. |
| Keywords: | General equilibrium, Strategic market games, Uniqueness, Aggregation, Information, Disequilibrium, Minimal institutions, Playable games |
| JEL: | C7 D50 E4 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2095&r=gth |