nep-gth New Economics Papers
on Game Theory
Issue of 2017‒09‒24
ten papers chosen by
László Á. Kóczy
Magyar Tudományos Akadémia

  1. The Central Core and the Mid-central Core as Novel Set-valued and Point-valued Solution Concepts for TU Coalitional Games: Topological and Axiomatic Properties By Marco Rogna
  2. Ambiguity and the Centipede Game: Strategic Uncertainty in Multi-Stage Games By Jürgen Eichberger; Simon Grant; David Kelsey
  3. Strategic Behavior of Moralists and Altruists, By Alger, Ingela; Weibull, Jörgen W.
  4. Strategic complexity and the value of thinking By David Gill; Victoria Prowse
  5. An Evolutionary approach to International Environmental Agreements By Tiziano Distefano; Simone D'Alessandro
  7. Arranged Marriages under Transferable Utilities By Pauline Morault
  8. Motivating Workers through Task Assignment: A Dynamic Model of Up-and-Down Competition for Status By Julianna M. Butler; Scott M. Gilpatric; Christian A. Vossler
  9. Costly Voting: A Large-scale Real Effort Experiment By Marco Faravelli; Kenan Kalayci; Carlos Pimienta
  10. Who gains more power in the EU after Brexit? By Szczypinska, Agnieszka

  1. By: Marco Rogna
    Abstract: The present paper proposes two new solution concepts that are Core restrictions: the first, set-valued, is the Central Core, the second, point valued, is the Mid-central Core. The basic idea at the root of the Central Core is to allow such Core elements that grant to each player at least the pay-off obtained as the centroid of the extreme points of the set of endogenous outside options that would emerge from a hypothetical bargaining game over the same coalitions except the grand coalition. The Mid-central Core is simply defined as the centroid of the extreme points of the Central Core. The basic topological properties of the Central Core are then analysed showing that it is a convex polytope with dimensionality equal to, maximum, n-2 and, at most, n extreme points lying on the boundaries of the Core, with $n$ being the number of players in the coalitional game. It is further shown that almost all axiomatic properties of the Core are preserved by these restrictions, except for consistency. The Mid-central Core further satisfies aggregate and weak coalitional monotonicity, but not strong and coalitional monotonicity.
    JEL: C71 C78 D63
    Date: 2017–06–05
  2. By: Jürgen Eichberger (Alfred Weber Institut, Universität Heidelberg.); Simon Grant (Research School of Economics, Australian National University.); David Kelsey (Department of Economics, University of Exeter)
    Abstract: We propose a solution concept for a class of extensive form games with ambiguity. Speci?cally we consider multi-stage games. Players have CEU preferences. The associated ambiguous beliefs are revised by Generalized Bayesian Updating. We assume individuals take account of possible changes in their preferences by using consistent planning. We show that if there is ambiguity in the centipede game it is possible to sustain ?cooperation? for many periods as part of a consistent-planning equilibrium under ambiguity. In a non-cooperative bargaining game we show that ambiguity may be a cause of delay in bargaining.
    Keywords: optimism, neo-additive capacity, dynamic consistency, consistent planning, centipede game, multi-stage game.
    JEL: D81
    Date: 2017
  3. By: Alger, Ingela; Weibull, Jörgen W.
    Abstract: Does altruism and morality lead to socially better outcomes in strategic interactions than selfishness? We shed some light on this complex and non-trivial issue by examining a few canonical strategic interactions played by egoists, altruists and moralists. By altruists we mean people who do not only care about their own material payoffs but also about those to others, and by a moralist we mean someone who cares about own material payoff and also about what would be his or her material payoff if others were to act like himself or herself. It turns out that both altruism and morality may improve or worsen equilibrium outcomes, depending on the nature of the game. Not surprisingly, both altruism and morality improve the outcomes in standard public goods games. In infinitely repeated games, however, both altruism and morality may diminish the prospects of cooperation, and to different degrees. In coordination games, morality can eliminate socially inefficient equilibria while altruism cannot.
    Keywords: altruism; morality; Homo moralis; repeated games; coordination games
    JEL: C73 D01 D03
    Date: 2017–08
  4. By: David Gill; Victoria Prowse
    Abstract: Response times are a simple low-cost indicator of the process of reasoning in strategic games. In this paper, we leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we categorize situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects’ thinking times are to complexity. We also study how variation in response times at the individual level across rounds a?ects strategic behavior and success. We find that ‘overthinking’ is detrimental to performance: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. Overthinking is detrimental even though subjects who think for longer on average tend to be more successful. Finally, cognitive ability and personality have no e?ect on average response times.
    Keywords: Response time; decision time; thinking time; strategic complexity; game theory; strategic games; repeated games; beauty contest; cognitive ability; personality
    JEL: C72 C91
    Date: 2017–08
  5. By: Tiziano Distefano (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Simone D'Alessandro (Department of Economics and Management, Università di Pisa, Italy)
    Abstract: Our work contributes to explain the observation of two facts at odds: the number of signatories of international environmental agreements (IEA) has grown in time, meanwhile, the aggregate global level of greenhouse gas emissions is increasing at exponential rate. We introduce a novel multi-scale framework, composed by two tied games, to show under which conditions a country is able to fulfill the IEA: an Evolutionary Game which describes the economic structure through the interaction of households and rms' strategies; and a 2x2 one-shot Game, with asymmetric nations that negotiate on the maximum share of emissions. The distance between international environmental targets and country's emissions performances is explained in terms of heterogeneous economic structure, without the need to impose any free-riding behaviour. Consumer's environmental consciousness (micro level) together with global income (and technological) inequality (macro level), are found to be the key variables towards the green transition path. We provide analytical results paired with numerical simulations.
    Keywords: International environmental agreements, asymmetry, evolutionary process, Multi-level perspective, climate change
    JEL: C71 C72 C73 H41 F53 Q20
    Date: 2017–09
  6. By: Ori Haimanko (BGU)
    Keywords: Games with a continuum of players, nonatomic games, mixed games, semivalues, Banzhaf value, compound game, composition property
    JEL: C71 D72
    Date: 2017
  7. By: Pauline Morault (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille)
    Abstract: In many societies, marriage is a decision taken at the familial level. Arranged marriages are documented from Renaissance Europe to contemporary rural Kenya, and are still prevalent in many parts of the developing world. However, this family dimension has essentially been neglected by the existing matching literature on marriages. The objective of this paper is to introduce family considerations into the assignment game. We explore how shifting decision-making to the family level affects matching on the marriage market. We introduce a new concept of familial stability and find that it is weaker than individual stability. The introduction of families into the marriage market generates coordination problems, so the central result of the transferable utility framework no longer holds: a matching can be family-stable even if it does not maximize the sum of total marital surpluses. Interestingly, even when the stable matching is efficient, family decision-making drastically modifies how the surplus is shared-out. These results may have fundamental implications for pre-marital investments. We find that stable matchings depend on the type of family partitioning. Notably, when each family contains one son and one daughter, familial and individual stability are equivalent.
    Keywords: marriage, family, matching, transferable utility
    Date: 2017–06
  8. By: Julianna M. Butler (Department of Economics, University of Delaware); Scott M. Gilpatric (Department of Economics, University of Tennessee); Christian A. Vossler (Department of Economics, University of Tennessee)
    Abstract: We show how competition for status that conveys explicit benefits can motivate effort in organizations such as schools, public agencies, and unionized firms in the absence of monetary incentives or intrinsically motivated workers. We develop an indefinitely-repeated labor market tournament model in which high-status agents may be rewarded either monetarily or with favorable task assignment. If monetary incentives are unavailable and the principal relies on task assignment this entails an efficiency cost relative to the benchmark case with monetary incentives. Our model offers a new perspective on the value to an employer of flexibility over job assignments within labor contracts.
    Keywords: task assignment; status; dynamic tournament; non-wage compensation
    JEL: C73 J41 L20 M51 M52
    Date: 2017–09
  9. By: Marco Faravelli (School of Economics, University of Queensland, Brisbane, Australia.); Kenan Kalayci (School of Economics, University of Queensland, Brisbane, Australia.); Carlos Pimienta (School of Economics, UNSW Business School, UNSW, Sydney, Australia.)
    Abstract: We test the turnout predictions of the standard two-party, private value, costly voting model through a large-scale, real effort experiment. We do this by recruiting 1,200 participants through Amazon's Mechanical Turk and employing a 2 x 2 between subjects design encompassing small (N=30) and large (N=300) elections, as well as close and one-sided elections. We find partial evidence of selfish instrumental voting. Participants with a higher opportunity cost are less likely to vote (cost effect); turnout rate decreases as the electorate size increases (size effect) in one-sided elections and increases the closer the election is (competition effect) in large elections. Contrary to the theoretical predictions, in large one-sided elections the majority turns out to vote at a higher rate than the minority. We propose an alternative theory assuming that voters obtain a small non-monetary utility if they vote and their party wins.
    Keywords: Costly Voting, Turnout, Field Experiment, Real Effort, Amazon's Mechanical Turk
    JEL: C93 D72 C72
    Date: 2017–08
  10. By: Szczypinska, Agnieszka (Ministry of Finance)
    Abstract: Brexit implications are analysed in most cases from the macroeconomic, financial or legal point of view while these areas are not the only ones the economists or governments should pay attention to. In this article we focus on how Brexit influences application of the European procedures, i.e. the results of various voting scenarios in the Council of the European Union. Based on power indices we examine changes of power distribution within the European Union (EU) from the perspective of each EU Member State separately as well as potential coalitions. This analysis covers also projection of power distribution in 2030 and 2060 that takes into account population forecast prepared by the Ageing Working Group. We find that larger countries benefit from the new possible power distribution while the smaller ones lose their power. Moreover, power of coalitions built by the EU Member States, representing different groups of interests in particular voting, e.g. EU budget or enforcement of the EU rules, seems to be vulnerable to the implications of the decision of the United Kingdom to leave the EU. Brexit may influence the quality of institutional and macroeconomic policy, especially in terms of decisions on the strictness of the EU rules.
    Keywords: Brexit; power index; voting power; Council of the European Union; demographics
    JEL: C71 F15
    Date: 2017–03–21

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