nep-gth New Economics Papers
on Game Theory
Issue of 2017‒07‒23
twelve papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. Asymmetric players in the Solidarity and Shapley values By Emilio Calvo; Esther Gutiérrez-López
  2. Random Matching under Priorities: Stability and No Envy Concepts By Haris Aziz; Bettina Klaus
  3. The degree measure as utility function over positions in networks By René van den Brink; Agnieszka Rusinowska
  4. Natural implementation with semi-responsible agents in pure exchange economies By LOMBARDI, Michele; YOSHIHARA, Naoki
  5. Cooperation and Endogenous Repetition in an Infinitely Repeated Social Dilemma By Kenju Kamei
  6. Treading a fine line: (Im)possibilities for Nash implementation with partially-honest individuals By LOMBARDI, Michele; YOSHIHARA, Naoki
  7. Unified Enrollment in School Choice: How to Improve Student Assignment in Chicago By Battal Dogan; Bumin Yenmez
  8. Trust, Reciprocity and Rules By Rietz, Thomas; Schniter, Eric; Sheremeta, Roman; Shields, Timothy
  9. Accuracy and Retaliation in Repeated Games with Imperfect Private Monitoring: Experiments and Theory (Revised version of F-381) By Yutaka Kayaba; Hitoshi Matsushima; Tomohisa Toyama
  10. Quorum Rules and Shareholder Power By Patricia Charléty; Marie-Cécile Fagart; Saïd Souam
  11. On the benefits of set-asides By Philippe Jehiel; Laurent Lamy
  12. Gender and bargaining: Experimental evidence from rural Uganda By Ben D’Exelle; Christine Gutekunst; Arno Riedl

  1. By: Emilio Calvo (Universidad de Valencia. ERI-CES); Esther Gutiérrez-López (Departamento de Economía Aplicada IV. Universidad del País Vasco U.P.V./E.H.U.)
    Abstract: We present a general bargaining protocol between n players in the setting of coalitional games with transferable utility. We consider asymmetric players. They are endowed with di¤erent probabilities of being chosen as proposers and with di¤erent probabilities of leaving the game if o¤ers are rejected. Two particular speci…cations of this bargaining protocol yield equilibrium proposals that we refer to as weighted solidarity values and weighted Shapley values. We compare the behavior of these values when the players’ probabilities are changed. We supplement the analysis with axiomatic characterizations of both values.
    Keywords: n-person bargaining; transferable utility games; asymmetric players; solidarity value; Shapley value.
    JEL: C71
    Date: 2017–06
  2. By: Haris Aziz; Bettina Klaus
    Abstract: We consider stability concepts for random matchings where agents have preferences over objects and objects have priorities for the agents. When matchings are deterministic, the standard stability concept also captures the fairness property of no (justified) envy. When matchings can be random, there are a number of natural stability / fairness concepts that coincide with stability / no envy whenever matchings are deterministic. We formalize known stability concepts for random matchings for a general setting that allows weak preferences and weak priorities, unacceptability, and an unequal number of agents and objects. We then present a clear taxonomy of the stability concepts and identify logical relations between them.Furthermore, we provide no envy / claims interpretations for some of the stability concepts that are based on a consumption process interpretation of random matchings. Finally, we present a transformation from the most general setting to the most restricted setting, and show how almost all our stability concepts are preserved by that transformation.
    Keywords: Matching Theory; Stability Concepts; Fairness; Random Matching
    JEL: C63 C70 C71 C78
    Date: 2017–07
  3. By: René van den Brink (Department of Econometrics and Tinbergen Institute, VU University); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: In this paper, we connect the social network theory on centrality measures to the economic theory of preferences and utility. Using the fact that networks form a special class of cooperative TU-games, we provide a foundation for the degree measure as a von Neumann-Morgenstern expected utility function reflecting preferences over being in different positions in different networks. The famous degree measure assigns to every position in a weighted network the sum of the weights of all links with its neighbours. A crucial property of a preference relation over network positions is neutrality to ordinary risk. If an expected utility function over network positions satisfies this property and some regularity properties, then it must be represented by a utility function that is a multiple of the degree centrality measure. We show this in three steps. First, we characterize the degree measure as a centrality measure for weighted networks using four natural axioms. Second, we relate these network centrality axioms to properties of preference relations over positions in networks. Third, we show that the expected utility function is equal to a multiple of the degree measure if and only if it represents a regular preference relation that is neutral to ordinary risk. Similarly, we characterize a class of affine combinations of the outdegree and indegree measure in weighted directed networks and deliver its interpretation as a von Neumann-Morgenstern expected utility function
    Keywords: Weigthed network; network centrality; utility function; degree centrality, von Neumann-Morgenstern expected utility function; coopeative TU-game; weighted directed network
    JEL: D81 D85 C02
    Date: 2017–07
  4. By: LOMBARDI, Michele; YOSHIHARA, Naoki
    Abstract: We study Nash implementation by natural price-quantity mechanisms in pure exchange economies when agents have intrinsic preferences for responsibility. An agent has an intrinsic preference for responsibility if she cares about truth-telling that is in line with the goal of the mechanism designer besides her material well-being. A semi-responsible agent is an agent who, given what her opponents do, acts in an irresponsible manner when a responsible behavior poses obstacles to her material well-being. The class of efficient allocation rules that are Nash implementable is identified provided that there is at least one agent who is semi-responsible. The Walrasian rule is shown to belong to that class.
    Keywords: Nash equilibrium, exchange economies, intrinsic preferences for responsibility,, boundary problem, price-quantity mechanism
    JEL: C72 D71
    Date: 2016–12
  5. By: Kenju Kamei (Durham Business School)
    Abstract: A large body of theoretical and experimental literature suggests that exogenously imposed infinite repetition can mitigate people’s opportunistic behavior in dilemma situations through personal enforcement. But, do people collectively choose to interact with the same persons, when there is an alternative with random matching? In a framework of an indefinitely-repeated collective action dilemma game, we let subjects collectively choose whether to (i) play with specific others for all rounds or to (ii) play with randomly matched counterparts in every period. The experiment showed that most subjects collectively select the partner matching option. It also indicated that groups achieve a higher level of cooperation when subjects collectively select option (i) by voting, compared with when the same option is exogenously imposed. These findings have an implication that people’s equilibrium selection may be affected by how the basic rules of games are introduced (endogenously or exogenously) to them.
    Keywords: experiment, public goods, cooperation, dilemma, social norms, endogenous choices
    JEL: C92 H41 C73 D72
    Date: 2017–07
  6. By: LOMBARDI, Michele; YOSHIHARA, Naoki
    Abstract: This paper investigates the robustness of Dutta and Sen’s (2012) Theorem 1 to weaker notions of truth-telling. An individual honesty standard is modeled as a subgroup of the society, including the individual herself, for which she feels truth-telling concerns. An individual i is honest when she states her true preferences as well as rankings (not necessarily complete) of outcomes that are consistent with the true preferences of individuals in her honesty standard. The paper offers a necessary condition for Nash implementation, called partial-honesty monotonicity, and shows that in an independent domain of preferences that condition is equivalent to Maskin monotonicity.
    Keywords: Nash implementation, partial-honesty, non-connected honesty standards, independent domain
    JEL: C72 D71 D82
    Date: 2017–07
  7. By: Battal Dogan; Bumin Yenmez
    Abstract: The Chicago Board of Education is implementing a centralized clearinghouse to assign students to schools for 2018-19 admissions. In this clearinghouse, each student can simultaneously be admitted to a selective and a nonselective school. We study this divided enrollment system and show that an alternative unified enrollment system, which assigns each student to only one school, is better for all students. We also examine systems with two stages of admissions, which has also been considered in Chicago, and establish conditions under which the unified enrollment system is better than the divided enrollment system.
    Keywords: Market design, school choice, unified enrollment
    JEL: C72 C78 I21
    Date: 2017–07
  8. By: Rietz, Thomas; Schniter, Eric; Sheremeta, Roman; Shields, Timothy
    Abstract: Many economic interactions rely on trust, which is sometimes violated. The fallout from business fraud and other malfeasance shows serious economic consequences of trust violations. Simple rules mandating minimum standards are attractive because they prevent the most egregious trust violations. However, such rules may undermine more trusting and reciprocal (trustworthy) behavior that otherwise would have occurred and, thus, lead to worse outcomes. We use an experimental trust game to test the efficacy of exogenously imposed minimum standard rules. Rules fail to increase trust and reciprocity, leading to lower economic welfare. Although sufficiently restrictive rules restore welfare, trust and reciprocity never return. The pattern of results is consistent with participants who are not only concerned with payoffs, but also use the game to learn about trust and trustworthiness of others.
    Keywords: Trust, Reciprocity, Minimum Standards, Experiment
    JEL: C72 C90 D63 D64 L51
    Date: 2017–07–19
  9. By: Yutaka Kayaba (University of Tokyo); Hitoshi Matsushima (University of Tokyo); Tomohisa Toyama (Kogakuin University)
    Abstract: We experimentally examine repeated prisoner’s dilemma with random termination, in which monitoring is imperfect and private. Our estimation indicates that a significant proportion of subjects follow generous tit-for-tat strategies, straightforward extensions of tit-for-tat. However, the observed retaliating policies are inconsistent with the generous tit-for-tat equilibria. Contrary to the theory, subjects tend to retaliate more with high accuracy than with low accuracy. Specifically, they tend to retaliate more than the theory predicts with high accuracy, while they tend to retaliate lesser with low accuracy. In order to describe these results as unique equilibrium, we demonstrate an alternative theory that incorporates naïveté and reciprocity.
    Date: 2017–07
  10. By: Patricia Charléty; Marie-Cécile Fagart; Saïd Souam
    Abstract: This paper characterizes the equilibria of a costly voting game in which shareholders heterogeneous in both size and preferences strategically vote for or against a proposed resolution or withhold. It is shown that a minimum quorum generates (1) equilibria in which one or several shareholders form voting coalitions in favor of the resolution that is adopted (2) an equilibrium in which shareholders strategically abstain from voting and the resolution is rejected. The size of blockholders and their preferences (in favor or against the resolution) play a crucial role in the existence of equilibria, their nature, the size and the number of voters in coalitions. We derive conditions under which the dominant shareholder controls the meeting. We also examine how large shareholders influence the result of the vote. In particular, we analyze the interaction between blockholders and discuss the situations in which large shareholders jointly control annual meetings or form coalitions to counter the dominant shareholder.
    Keywords: Shareholder Meeting, Strategic voting, Coalitions, Quorum rule, Dominant, Controlling and Reference shareholders.
    JEL: D72 G34 K20
    Date: 2017
  11. By: Philippe Jehiel (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Laurent Lamy (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Set-asides programs consist in forbidding access to specific participants, and they are commonly used in procurement auctions. We show that when the set of potential participants is composed of an incumbent (who bids for sure if allowed to) and of entrants who show up endogenously (in such a way that their expected rents are fixed by outside options), then it is always beneficial for revenues to exclude the incumbent in the second-price auction. This exclusion principle is generalized to auction formats that favor the incumbent in the sense that he would always gets the good when he values it most. By contrast, set-asides need not be desirable if the incumbent's payoff is included into the seller's objective or in environments with multiple incumbents. Various applications are discussed.
    Keywords: set-asides, entry restrictions, auctions with endogenous entry,entry deterrence, asymmetric buyers, incumbents, government procurement,procurement competition policy
    Date: 2017–07
  12. By: Ben D’Exelle; Christine Gutekunst; Arno Riedl
    Abstract: We study gender differences in bilateral bargaining using an artefactual field experiment in rural Uganda, through variation in gender composition of bargaining pairs and in disclosure of identities. Disagreement is common independently of disclosure condition, but less frequent among female-only pairs. When paired with a man who is informed about their identity, women tend to demand less than men in the same situation. The influence of beliefs on demands is stronger for men than for women, and this difference is larger under anonymity than when identities are disclosed. These results identify important mechanisms that induce gender inequality in resource access.
    Date: 2017

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