nep-gth New Economics Papers
on Game Theory
Issue of 2023‒10‒30
six papers chosen by
Sylvain Béal, Université de Franche-Comté

  1. Substitutability in Favor Exchange By Oguzhan Celebi
  2. Evolution of environmentally mediated social interactions under isolation by distance By Mullon, Charles; Peña, Jorge; Lehmann, Laurent
  3. Increasing Ticketing Allocative Efficiency Using Marginal Price Auction Theory By Boxiang Fu
  4. Trade Wars and Industrial Policy Competitions: Understanding the US-China Economic Conflicts By Jiandong Ju; Hong Ma; Zi Wang; Xiaodong Zhu
  5. Solutions in multi-actor projects with collaboration and strategic incentives By van Beek, Andries
  6. Two Experiments on Trading Information Goods in a Network By Nobuyuki Hanaki; Yutaka Kayaba; Jun Maekawa; Hitoshi Matsushima

  1. By: Oguzhan Celebi
    Abstract: I introduce a favor exchange model where favors are substitutable and study bilateral enforcement of cooperation. Without substitutability, the value of a relationship does not depend on the rest of the network, and in equilibrium there is either no cooperation or universal cooperation. When favors are substitutable, each additional relationship is less valuable than the previous, and intermediate levels of cooperation are observed. I extend the model to allow for transfers, heterogeneous players, and multilateral enforcement. My results can explain the stratification of social networks in post-Soviet states and the adoption of different enforcement mechanisms by different groups of medieval traders.
    Date: 2023–09
  2. By: Mullon, Charles; Peña, Jorge; Lehmann, Laurent
    Abstract: Many social interactions happen indirectly via modifications of environmental variables, e.g. through the depletion of renewable resources or the secretion of functional compounds. Here, we derive the selection gradient on a quantitative trait affecting the dynamics of such environmental vari-ables that feedback on reproduction and survival in a patch-structured population that is finite, of con-stant size, and subject to isolation by distance. Our analysis shows that the selection gradient depends on how a focal individual influences the fitness of all future individuals in the population through modifications of the environmental variables they experience, weighted by the neutral relatedness be-tween recipients and the focal. The evolutionarily relevant trait-driven environmental modifications are formalized as the extended phenotypic effects of an individual, which quantify how a trait change in the individual in the present affects the environmental variables in all patches at all future times. When the trait affects reproduction and survival through some payoff function, the selection gradient can be expressed in terms of extended phenotypic effects weighted by scaled-relatedness coefficients. We show how to compute extended phenotypic effects, relatedness, and scaled-relatedness coefficients using Fourier analysis, allowing us to investigate a broad class of environmentally mediated social in-teractions in a tractable way. We illustrate our approach by studying the evolution of a trait controlling the costly production of some lasting commons (e.g. a common-pool resource or a toxic compound) that can diffuse in space. We show that whether selection favours environmentally mediated altruism or spite depends on the spatial correlation between an individual’s lineage and the commons originat-ing from its patch. The sign of this correlation depends on interactions between dispersal patterns and the commons’ renewal dynamics. More broadly, we suggest that selection can favour a wide range of social behaviours when these are mediated in space and time through environmental feedback.
    Keywords: Adaptive dynamics; Metacommunity; Extended Phenotype; Altruism; Spite
    Date: 2023–10
  3. By: Boxiang Fu
    Abstract: Most modern ticketing systems rely on a first-come-first-serve or randomized allocation system to determine the allocation of tickets. Such systems has received considerable backlash in recent years due to its inequitable allotment and allocative inefficiency. We analyze a ticketing protocol based on a variation of the marginal price auction system. Users submit bids to the protocol based on their own utilities. The protocol awards tickets to the highest bidders and determines the final ticket price paid by all bidders using the lowest winning submitted bid. Game theoretic proof is provided to ensure the protocol more efficiently allocates the tickets to the bidders with the highest utilities. We also prove that the protocol extracts more economic rents for the event organizers and the non-optimality of ticket scalping under time-invariant bidder utilities.
    Date: 2023–09
  4. By: Jiandong Ju; Hong Ma; Zi Wang; Xiaodong Zhu
    Abstract: We provide the first quantitative evaluation of the impacts and interactions of the US-China trade wars and industrial policy competitions. We extend the multi-country-multi-sector model in Caliendo and Parro (2015) by incorporating sectoral external economies of scale. We find that (i) under our baseline calibration of scale economies, the "Made-in-China 2025" ("MIC 2025") subsidies tend to improve the welfare of both China and the U.S.; (ii) the US gains from Trump administration's tariffs if China does not retaliate, and the gain is larger if China had implemented the "MIC 2025" project; (iii) in a non-cooperative tariff game targeting on high-tech industries supported by the "MIC 2025", both China and the U.S. impose high tariffs and endure welfare losses; and (iv) if it is feasible for the U.S. to subsidize its own high-tech industries, the U.S. would reduce its tariffs on high-tech imports from China and benefit from its own industrial subsidies. These results (i) provide a rationale for trade wars and industrial policy competitions between the U.S. and China, and (ii) suggest that industrial subsidies, if properly implemented, may generate less distortion than import tariffs as a means of international competition.
    Keywords: Trade War, Industrial Policy, Scale Economies, Strategic Interactions
    JEL: F12 F13 F17 F51
    Date: 2023–10–12
  5. By: van Beek, Andries (Tilburg University, School of Economics and Management)
    Date: 2023
  6. By: Nobuyuki Hanaki; Yutaka Kayaba; Jun Maekawa; Hitoshi Matsushima
    Abstract: We examine the impact of a cycle path on the trading of a copyable information good in a network experimentally. A cycle path in a network allows a buyer to become a reseller who can compete against existing sellers by replicating the good. A theoretical prediction considers that the price of the information good, even with the first transaction where there is not yet a reseller competing with the original seller, will be lower in networks with a cycle path than otherwise. However, our experiment reveals that the observed price for the first transaction is significantly higher in networks with a cycle path. An additional experiment that enhances competition also does not support the theoretical prediction.
    Date: 2021–12

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