nep-gth New Economics Papers
on Game Theory
Issue of 2022‒11‒28
sixteen papers chosen by
Sylvain Béal
Université de Franche-Comté

  1. Nash equilibria of COVID-19 vaccination By Alessandro Saccal
  2. A Nash equilibrium against gun control By Saccal, Alessandro
  3. Predicting Voluntary Contributions by `Revealed-Preference Nash-Equilibrium' By Wolff, Irenaeus
  4. Two-Player Bargaining Problems with Unilateral Pre-donation By Saglam, Ismail
  5. Average monotonic cooperative games with nontransferable utility By Sudhölter, Peter; Giménez-Gómez, José-Manuel; Vilella, Cori
  6. Persuasion without Priors By Alexei Parakhonyak; Anton Sobolev
  7. Motivated Skepticism By Jeanne Hagenbach; Charlotte Saucet
  8. Information Aggregation and Transmission in Strategic Networks By Fan-chin Kung; Ping Wang
  9. Promises or Agreements? Moral commitments in bilateral communication By Giovanni Di Bartolomeo; Martin Dufwenberg; Stefano Papa; Francesco Passarelli
  10. Persuading crowds By Caio Lorecchio
  11. Group Representation Concerns and Network formation By Melguizo, Isabel
  12. Fair cost sharing: big tech vs telcos By Bruno Jullien; Matthieu Bouvard
  13. Comparing Crowdfunding Mechanisms: Introducing the Generalized Moulin-Shenker Mechanism By Andrej Woerner; Sander Onderstal; Arthur Schram
  14. Dynamic Consistency and Ambiguous Communication By Pahlke, Marieke
  15. On the Welfare Effects of Adverse - Selection in Oligopolistic Markets By Marco de Pinto; Lazlo Goerke; Alberto Palermo
  16. Information Design in Allocation with Costly Verification By Yi-Chun Chen; Gaoji Hu; Xiangqian Yang

  1. By: Alessandro Saccal
    Abstract: The present research conducts a formal analysis of the interactive decisions concerning the enterprise of COVID-19 vaccination on the part of governments and citizens. It specifically constructs a non-cooperative static game with complete information between the citizen and the government encompassing the strategies of vaccination and no vaccination with regard to the former and the strategies of direct imposition, subsistence restrictions, luxury restrictions and no imposition with regard to the latter. On account of its payoff structure the present analysis finds that the game in question presents one sole and strict pure strategy Nash equilibrium, being that of strategies no vaccination and no imposition, respectively. The core rationale is that the citizen accepts COVID-19 vaccination only if his subsistence survival is placed at risk, because of the inherent unlawfulness presented by COVID-19 vaccination, itself due to foetal exploitation and potentially adverse effects, thereby prompting the government not to impose it, lest individual integrity and societal rights be violated as well. It furthermore shows that the exogenous elimination of the no imposition strategy on the part of the government transforms the Nash equilibrium into that of strategies vaccination and direct imposition, respectively, as materially come to pass. It finally determines that the unlikely addition of the revolution strategy on the part of the citizen in the presence of the elimination of the no imposition strategy on the part of the government likewise admits one sole and strict pure strategy Nash equilibrium, either in strategies vaccination and direct imposition or in strategies revolution and direct imposition, respectively.
    Keywords: Citizen, COVID-19, equilibrium, game, government, imposition, pandemic, payoff, vaccination
    JEL: C72 D74 I12 I18
    Date: 2022–10–11
  2. By: Saccal, Alessandro
    Abstract: This work constructs a non-cooperative, static game of gun control between the citizen and a pacifistic society characterised by law enforcement imperfection, by which the retention of firearms and the certitude of punishment against all crimes emerges both as a strict Nash equilibrium, in pure strategies, and as a strict dominant strategy equilibrium. The reason is that ratified by the Second Amendment to the American Constitution, discerning the necessity of a militia to the individual and societal security of a free state, by which the right of the people to keep and bear arms cannot be infringed.
    Keywords: citizen; criminal; equilibrium; felon; game; guns; mass murderer; payoff; punishment; society; suicide.
    JEL: C72 D74 K14 K39 K42
    Date: 2022–10–31
  3. By: Wolff, Irenaeus
    JEL: C72
    Date: 2022
  4. By: Saglam, Ismail
    Abstract: This paper characterizes conditions for two-player bargaining problems and bargaining rules under which unilateral pre-donation always yields Pareto utility gains. The paper also computes the optimal pre-donation of each player under the class of proportional bargaining rules.
    Keywords: Cooperative bargaining; pre-donation.
    JEL: C78
    Date: 2022–10–29
  5. By: Sudhölter, Peter (Department of Economics); Giménez-Gómez, José-Manuel (Universitat Rovira i Virgili); Vilella, Cori (Universitat Rovira i Virgili)
    Abstract: A non-negative transferable utility (TU) game is average monotonic if there exists a non-negative allocation according to which the relative worth is not decreasing when enlarging the coalition. We generalize this definition to the nontransferable utility (NTU) case. It is shown that an average monotonic NTU game shares several properties with an average monotonic TU game. In particular it has a special core element and there exists a population monotonic allocation scheme. We show that an NTU bankruptcy game is average monotonic with respect to the claims vector.
    Keywords: nontransferable utility; average monotonicity; core; population monotonicity
    JEL: C71
    Date: 2022–10–29
  6. By: Alexei Parakhonyak; Anton Sobolev
    Abstract: We consider an information design problem when the sender faces ambiguity regarding the probability distribution over the states of the world, the utility function and the prior of the receiver. The solution concept is minimax loss (regret), that is, the sender minimizes the distance from the full information benchmark in the worst-case scenario. We show that in the binary states and binary actions setting the optimal strategy involves a mechanism with a continuum of messages, which admits a representation as a randomization over mechanisms consisting of two messages. A small level of uncertainty regarding the receiver’s prior makes the sender more truthful than in the full information benchmark, but as uncertainty increases at some point the sender starts to lie more. If the sender either knows the probability distribution over the states of the world, or knows that the receiver knows it, then the maximal loss is bounded from above by 1/e. This result generalizes to an infinite state model, provided that the set of admissible mechanisms is limited to cut-off strategies.
    Date: 2022–07–05
  7. By: Jeanne Hagenbach (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Charlotte Saucet (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne)
    Abstract: We experimentally study how individuals read strategically-transmitted information when they have preferences over what they will learn. Subjects play disclosure games in which Receivers should interpret messages skeptically. We vary whether the state that Senders communicate about is ego-relevant or neutral for Receivers, and whether skeptical beliefs are aligned or not with what Receivers prefer believing. Skepticism is lower when skeptical beliefs are self-threatening than in neutral settings. When skeptical beliefs are self-serving, skepticism is not enhanced compared to neutral settings. These results demonstrate that individuals' exercise of skepticism depends on the conclusions of skeptical inferences.
    Keywords: Disclosure games,Hard information,Unraveling result,Skepticism,Motivated beliefs
    Date: 2022–07–15
  8. By: Fan-chin Kung; Ping Wang
    Abstract: Observing the increasingly important roles played by the creation and transmission of information and tacit knowledge, we construct an information-network model incorporating both information transmitters and information aggregators. Given information-processing roles in aggregation or transmission, we establish various general properties concerning the existence of a network equilibrium, its optimality and the patterns of equilibrium and optimal configuration. We then allow for endogenous choice of the information-processing roles. We prove the existence and show that, with sufficiently small link maintenance costs, the monocentric network with one aggregator connecting to all other agents as transmitters on a tree graph is the unique configuration. In general, a rich array of equilibrium configurations may emerge, including core-star, star-with-satellites and cycles. We further characterize an information-processing chain network with all information aggregators and transmitters linked along a chain and compute numerically the ranges of transmission decays and link costs within which a network equilibrium arises.
    JEL: C7 D20 D83
    Date: 2022–10
  9. By: Giovanni Di Bartolomeo; Martin Dufwenberg; Stefano Papa; Francesco Passarelli
    Abstract: Messages may trigger moral incentives to honor promises or agreements in a game with pre-play bilateral communication. We hypothesize that individuals’ inclination to keep a promise is highest if the counterpart requited the promise. We interpret this as an inclination to honor agreements. We report supporting results from an experiment.
    Keywords: Guilt aversion; promise-keeping; informal agreements
    JEL: A13 C91 D03 D64 D90
    Date: 2022–11
  10. By: Caio Lorecchio (Universitat de Barcelona and BEAT)
    Abstract: A sequence of short-lived agents must choose which action to take under a fixed, but unknown, state of the world. Prior to the realization of the state, the long-lived principal designs and commits to a dynamic information policy to persuade agents toward his most preferred action. The principal's persuasion power is potentially limited by the existence of conditionally independent and identically distributed private signals for the agents as well as their ability to observe the history of past actions. I characterize the problem for the principal in terms of a dynamic belief manipulation mechanism and analyze its implications for social learning. For a class of private information structure - the log-concave class, I derive conditions under which the principal should encourage some social learning and when he should induce herd behavior from the start (single disclosure). I also show that social learning is less valuable to a more patient principal: as his discount factor converges to one, the value of any optimal policy converges to the value of the single disclosure policy.
    Keywords: Observational learning, Bayesian persuasion, dynamic information design.
    JEL: D82 D83
    Date: 2022
  11. By: Melguizo, Isabel
    Abstract: This paper studies processes of integration and segregation using a connections model in which individuals form valuable links that also entail a cost. Individuals belong to two different groups and care about whether their own group represents a sufficient fraction in their neighborhood. Concerns for representation promote the segregation of societies as even for small linking costs individuals do not link to different others because of the threat that their group become under-represented. For certain cost ranges, concerns for representation also determine efficient networks because forming links with members of the opposite group entails a utility loss due to under-representation.
    Keywords: integration, segregation, representation concerns, homophily, welfare, pairwise stability
    JEL: D6 D85 Z13
    Date: 2022–02–08
  12. By: Bruno Jullien (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique); Matthieu Bouvard (TSE-R - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées)
    Abstract: We study a cost-sharing mechanism where a content provider contributes to covering the costs incurred by a network operator when delivering content to consumers. The costshare not only boosts the content provider's incentives to moderate trac but also aects the price composition for consumers buying access and content. We show the overall eect on consumer welfare depends on the content provider's ability to monetize users. When that ability is high, introducing a cost-share can lead to lower overall prices and higher consumer welfare. We study the robustness of this result to long-term investments in cost reduction by the operator and to heterogeneity in consumers' taste for content. In extensions with multiple contents and multiple operators, contractual externalities arise that suggest a role for regulation.
    Date: 2022–10–28
  13. By: Andrej Woerner (Ludwig Maximilian University of Munich); Sander Onderstal (University of Amsterdam); Arthur Schram (University of Amsterdam)
    Abstract: For reward-based crowdfunding, we introduce the strategy-proof Generalized Moulin-Shenker mechanism (GMS) and compare its performance to the prevailing All-Or-Nothing mechanism (AON). Theoretically, GMS outperforms AON in equilibrium profit and funding success. We test these predictions experimentally, distinguishing between a sealed-bid and a dynamic version of GMS. We find that the dynamic GMS outperforms the sealed-bid GMS. It performs better than AON when the producer aims at maximizing funding success. For crowdfunding in practice, this implies that the current standard of financing projects could be improved upon by implementing a crowdfunding mechanism that is similar to the dynamic GMS.
    Keywords: keywords
    Date: 2022–11–13
  14. By: Pahlke, Marieke
    JEL: C73 D81 D83
    Date: 2022
  15. By: Marco de Pinto (University of Applied Labour Studies, Mannheim); Lazlo Goerke (Institute for Labour Law and Industrial Relations in the EC, University of Trier, IZA Bonn and CESifo Muenchen); Alberto Palermo (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: We consider a principal-agent relationship with adverse selection. Principals pay informational rents due to asymmetric information and sell their output in a homogeneous Cournot-oligopoly. We find that asymmetric information may mitigate or more than compensate the welfare reducing impact of market power, irrespective of whether the number of firms is given exogenously or determined endogenously by a profit constraint. We further show that welfare in a setting with adverse selection may be higher than the maximized welfare level attainable in a world with perfect observability.
    Keywords: Adverse Selection, Oligopoly, Welfare
    JEL: D43 D82 L51
  16. By: Yi-Chun Chen; Gaoji Hu; Xiangqian Yang
    Abstract: A principal who values an object allocates it to one or more agents. Agents learn private information (signals) from an information designer about the allocation payoff to the principal. Monetary transfer is not available but the principal can costly verify agents' private signals. The information designer can influence the agents' signal distributions, based upon which the principal maximizes the allocation surplus. An agent's utility is simply the probability of obtaining the good. With a single agent, we characterize (i) the agent-optimal information, (ii) the principal-worst information, and (iii) the principal-optimal information. Even though the objectives of the principal and the agent are not directly comparable, we find that any agent-optimal information is principal-worst. Moreover, there exists a robust mechanism that achieves the principal's payoff under (ii), which is therefore an optimal robust mechanism. Many of our results extend to the multiple-agent case; if not, we provide counterexamples.
    Date: 2022–10

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