nep-gth New Economics Papers
on Game Theory
Issue of 2024‒01‒08
29 papers chosen by
Sylvain Béal, Université de Franche-Comté

  1. Nash equilibria for dividend distribution with competition By De Angelis, Tiziano; Gensbittel, Fabien; Villeneuve, Stéphane
  2. The Role of Discounting in Bargaining with Private Information By Francesc Dilmé
  3. Transparency in Sequential Common-Value Trade By Justus Preusser; Andre Speit
  4. Comparing Crowdfunding Mechanisms: Introducing the Generalized Moulin-Shenker Mechanism By Andrej Woerner; Sander Onderstal; Arthur Schram
  5. Reciprocity and Learning Effects in Price Competition By Nese, Annamaria; O'Higgins, Niall; Sbriglia, Patrizia
  6. Algorithmic Persuasion Through Simulation: Information Design in the Age of Generative AI By Keegan Harris; Nicole Immorlica; Brendan Lucier; Aleksandrs Slivkins
  7. The War of Attrition under Uncertainty: Theory and Robust Testable Implications By Jean-Paul Décamps; Fabien Gensbittel; Thomas Mariotti
  8. Meet Me at the Threshold - Asymmetric Preferences in a Threshold Public Goods Game By Spycher, Sarah
  9. Resource Sharing in Energy Communities: A Cooperative Game Approach By Ahmed S. Alahmed; Lang Tong
  10. On the coevolution of cooperation and social institutions By Salazar Restrepo, Verónica; Szentes, Balázs
  11. Why Do Committees Work? By Yves Breitmoser; Justin Valasek; Justin Mattias Valasek
  12. Sanctions, Co-sanctions, and Counter-sanctions: A Multilateral, Evolutionary Game among Three Global Powers By Zhou, Peng; Guo, Dong
  13. Nonemptiness of the f-Core Without Comprehensiveness By Hideo Konishi; Dimitar Simeonov
  14. Cooperation, Norms, and Gene-culture Coevolution By Mankat, Fabian
  15. Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition By Marco Catola; Alessandra Chirco; Marcella Scrimitore
  16. Mechanisms without transfers for fully biased agents By Deniz Kattwinkel; Axel Niemeyer; Justus Preusser; Alexander Winter
  17. Deceptive Communication: Direct Lies vs. Ignorance, Partial-Truth and Silence By Despoina Alempaki; Valeria Burdea; Daniel Read
  18. Unobserved Wholesale Contracts By Maarten C.W. Janssen; Santanu Roy
  19. Organizational Design and Error Propagation: Theory and Experiment By Yves Breitmoser; Lian Xue; Jiwei Zheng; Daniel John Zizzo
  20. When Speed is of Essence: Perishable Goods Auctions By Isa Hafalir; Onur Kesten; Katerina Sherstyuk; Cong Tao
  21. Privatization and Licensing under Public Budget Constraint By Madhuri H.Shastry; Uday Bhanu Sinha
  22. Formation of Teams in Contests: Tradeoffs Between Inter and Intra-Team Inequalities By Hideo Konishi; Chen-Yu Pan; Dimitar Simeonov
  23. Allocation Rules of Indivisible Prizes in Team Contests By Hideo Konishi; Nicolas Sahuguet; Benoit Crutzen
  24. Incentives for Collective Innovation By Curello, Gregorio
  25. Negotiating power vs. market power: lessons for business and conclusions for politics By Spektor Stanislav; Nazarova Ekaterina; Akhtemzyanov Rafael
  26. Commitment Requests Do Not Affect Truth-Telling in Laboratory and Online Experiments By Tobias Cagala; Ulrich Glogowsky; Johannes Rincke; Simeon Schudy
  27. Absolute vs. relative poverty and wealth: Cooperation in the presence of between-group inequality By Eugenio Levi; Abhijit Ramalingam
  28. Intragroup communication in social dilemmas: An artefactual public good field experiment in small-scale communities By Hönow, Nils Christian; Pourviseh, Adrian
  29. The Politics of Bargaining as a Group By Vincent Anesi; Peter Buisseret

  1. By: De Angelis, Tiziano; Gensbittel, Fabien; Villeneuve, Stéphane
    Abstract: We construct a Nash equilibrium in feedback form for a class of two-person stochastic games with absorption arising from corporate finance. More precisely, the paper focusses on a strategic dynamic game in which two financially-constrained firms operate in the same market. The firms distribute dividends and are faced with default risk. The strategic interaction arises from the fact that if one firm defaults, the other one becomes a monopolist and increases its profitability. To determine a Nash equilibrium in feedback form, we develop two different concepts depending on the initial endowment of each firm. If one firm is richer than the other one, then we use a notion of control vs. strategy equilibrium. If the two firms have the same initial endowment (hence they are symmetric in our setup) then we need mixed strategies in order to construct a symmetric equilibrium.
    Date: 2023–12–13
  2. By: Francesc Dilmé (University of Bonn)
    Abstract: In this paper we analyze a continuous-time Coase setting with finite horizon, interdependent values, and different discount rates for the buyer and seller. We fully characterize the equilibrium behavior, which permits us to study how the agents’ discount rates (i.e., patience levels) shape the bargaining outcome. We find that the seller’s commitment problem persists even when she is fully patient, and that higher seller impatience may lead to higher equilibrium prices. Higher buyer impatience, on the other hand, incentivizes the buyer to trade earlier, which accelerates price decline since the seller’s commitment problem is more severe at earlier times. Under appropriate conditions, we conclude that the buyer is better off when he is more impatient, independently of his private valuation; hence, higher bargaining costs may give negotiators with private information greater bargaining power.
    Keywords: Bargaining with private information, different discount factors
    JEL: C78 D82
    Date: 2023–12
  3. By: Justus Preusser; Andre Speit
    Abstract: We consider the sale of a single indivisible common-value good in a dynamic market where short-lived buyers arrive over time. Buyers observe private signals about the value. The seller is initially uninformed and proposes the terms of trade. As time passes, all players learn about the value from delay in trade. Importantly, this learning process depends on what is made public about buyer-seller interactions. We compare the division of surplus across three transparency regimes that differ with respect to whether buyers observe the seller’s past actions or time-on-the-market. When the seller’s time-on-the market but not the seller’s past actions are observable, and if buyers’ signals are sufficiently rich, then there is no perfect Bayesian equilibrium where the seller extracts the full surplus. In the other two regimes, where buyers observe either everything or nothing about the seller’s past actions and time-on-the-market, the seller extracts the full surplus in at least one equilibrium, no matter the signal structure.
    Keywords: Common-value, dynamic trade, transparency, learning, division of surplus
    JEL: D83
    Date: 2023–12
  4. By: Andrej Woerner (LMU Munich); Sander Onderstal (University of Amsterdam , Tinbergen Institute); Arthur Schram (University of Amsterdam, Tinbergen Institute)
    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 suggests that the current standard of financing projects may be improved upon by implementing a crowdfunding mechanism that is similar to the dynamic GMS.
    Date: 2023–11–24
  5. By: Nese, Annamaria (University of Salerno); O'Higgins, Niall (ILO International Labour Organization); Sbriglia, Patrizia (University of Campania-Luigi Vanvitelli)
    Abstract: One disputed topic in Organization and Management economics is how leadership and collusive agreements are set and maintained in industries where firms are characterised by similar technological opportunities and structures. This topic is particularly important to analyse online and digital markets, which can be regarded as networks where managers share information and where there are no structural differences among firms. In this paper we claim that strategic advantages may be the outcome of repeated interaction among managers and can be driven by two (in some cases) competing forces, information and reciprocity. In fact, on one side, full information on all firms' strategies, help agents to coordinate their decisions and drive the final outcomes towards more profitable solutions. On the other side, when information is limited only to their direct opponents, competitive advantages are maintained when each competitor views the individuals' share of profits as a "fair" allocation. Thus, pricing behaviour is affected both by the willingness to reciprocate the opponent behaviour and the willingness to imitate best strategies observed in other markets. Both pricing behaviours lead to different profit outcomes. We test our hypotheses with a lab experiment on a sequential pricing game. We find a striking difference in pricing behaviour across treatments, and a significant difference also in the ability of the second movers to establish and keep their leadership. Specifically, individuals are highly competitive when information on other players' prices is limited, and only in few markets we observe second movers' advantages. When information on prices on all markets is provided, the picture is entirely different, and prices are very close to the sub-game equilibrium level. Overall, reciprocity can explain the results, however, full information reduces negative reciprocity and competition.
    Keywords: price competition, learning direction theory, trust and reciprocity
    JEL: C90 C91 L1
    Date: 2023–11
  6. By: Keegan Harris; Nicole Immorlica; Brendan Lucier; Aleksandrs Slivkins
    Abstract: How can an informed sender persuade a receiver, having only limited information about the receiver's beliefs? Motivated by research showing generative AI can simulate economic agents, we initiate the study of information design with an oracle. We assume the sender can learn more about the receiver by querying this oracle, e.g., by simulating the receiver's behavior. Aside from AI motivations such as general-purpose Large Language Models (LLMs) and problem-specific machine learning models, alternate motivations include customer surveys and querying a small pool of live users. Specifically, we study Bayesian Persuasion where the sender has a second-order prior over the receiver's beliefs. After a fixed number of queries to an oracle to refine this prior, the sender commits to an information structure. Upon receiving the message, the receiver takes a payoff-relevant action maximizing her expected utility given her posterior beliefs. We design polynomial-time querying algorithms that optimize the sender's expected utility in this Bayesian Persuasion game. As a technical contribution, we show that queries form partitions of the space of receiver beliefs that can be used to quantify the sender's knowledge.
    Date: 2023–11
  7. By: Jean-Paul Décamps; Fabien Gensbittel; Thomas Mariotti
    Abstract: We study a generic model of the war of attrition with symmetric information and stochastic payoffs that depend on a homogeneous linear diffusion. We first show that a player’s mixed Markov strategy can be represented by an intensity measure over the state space together with a subset of the state space over which the player concedes with probability 1. We then show that, if players are asymmetric, then, in all mixed-strategy Markov-perfect equilibria, these intensity measures must be discrete, and characterize any such equilibrium through a variational system for the players’ value functions. We illustrate these findings by revisiting the standard model of exit in a duopoly under uncertainty and construct a mixed-strategy Markov-perfect equilibrium in which attrition takes place on path despite firms having different liquidation values. We show that firms’ stock prices comove negatively over the attrition zone and exhibit resistance and support patterns documented by technical analysis.
    Keywords: war of attrition, mixed-strategy equilibrium, uncertainty
    JEL: C61 D25 D83
    Date: 2023
  8. By: Spycher, Sarah
    JEL: H41 C91 Q50
    Date: 2023
  9. By: Ahmed S. Alahmed; Lang Tong
    Abstract: We analyze the overall benefits of an energy community cooperative game under which distributed energy resources (DER) are shared behind a regulated distribution utility meter under a general net energy metering (NEM) tariff. Two community DER scheduling algorithms are examined. The first is a community with centrally controlled DER, whereas the second is decentralized letting its members schedule their own DER locally. For both communities, we prove that the cooperative game's value function is superadditive, hence the grand coalition achieves the highest welfare. We also prove the balancedness of the cooperative game under the two DER scheduling algorithms, which means that there is a welfare re-distribution scheme that de-incentivizes players from leaving the grand coalition to form smaller ones. Lastly, we present five ex-post and an ex-ante welfare re-distribution mechanisms and evaluate them in simulation, in addition to investigating the performance of various community sizes under the two DER scheduling algorithms.
    Date: 2023–11
  10. By: Salazar Restrepo, Verónica; Szentes, Balázs
    Abstract: This paper examines an environment inhabited by self-interested individuals and unconditional cooperators. The individuals are randomly paired and engage in the Prisoner's Dilemma Game. Cooperation among players is incentivized by institutional capital, and selfish individuals incur a cost to identify situations where defection goes unpunished. In this environment, we explore the coevolution of types and institutional capital, with both the distribution of types and capital evolving through myopic best-response dynamics. The equilibria are shown to be Pareto-ranked. The main finding is that any equilibrium level of institutional capital exceeds the optimal amount in the long run. Thus, forward-looking optimal institutions not only foster a more cooperative culture but are also more cost-effective compared to the myopically optimal ones.
    Keywords: cooperation; evolutionary dynamics; prisoner's dilemma
    JEL: J1
    Date: 2024–01–01
  11. By: Yves Breitmoser; Justin Valasek; Justin Mattias Valasek
    Abstract: We report on the results of an experiment designed to disentangle behavioral biases in information aggregation of committees. Subjects get private signals about the state of world, send binary messages, and finally vote under either majority or unanimity rules. Committee decisions are significantly more efficient than predicted by Bayesian equilibrium even with lying aversion. Messages are truthful, subjects correctly anticipate the truthfulness (contradicting limited depth of reasoning), but strikingly overestimate their pivotality when voting (contradicting plain lying aversion). That is, committees are efficient because members message truthfully and vote non-strategically. We show that all facets of behavior are predicted by overreaction, subjects overshooting in Bayesian updating, which implies that subjects exaggerate the importance of truthful messages and sincere voting. A simple one-parameteric generalization of quantal response equilibrium capturing overreaction covers 87 percent of observed noise.
    Keywords: committees, incomplete information, cheap talk, information aggregation, laboratory experiment, Bayesian updating, lying aversion, limited depth of reasoning
    JEL: D71 D72 C90
    Date: 2023
  12. By: Zhou, Peng (Cardiff Business School); Guo, Dong
    Abstract: Facing the sanctions from the West since the annexation of Crimea in 2014, Russia quickly converged to a strong counter-sanction strategy. The US and the EU staggered the strengths of sanctions in turns, with the EU first imposing relatively stronger commercial sanctions first and the US relaying with stronger financial sanctions later. Using US-EU-Russia sanctions as an example, we develop a multilateral, evolutionary game to capture the strategic complementarity between the sanctioners and the sanctionee, as well as the strategic substitutability between the leading sanctioner and the co-sanctioner. In an extended model, the sanction technology is introduced to endogenize how sanctions are designed before deployment. The model is then calibrated to match the summarized stylized facts, to demonstrate the simulated evolutionary paths, and to verify the derived strategic dependence.
    Keywords: Sanction; Strategic Dependence; Evolutionary Game Theory
    Date: 2023–12
  13. By: Hideo Konishi (Boston College); Dimitar Simeonov (Bahçeşehir University)
    Abstract: Kaneko and Wooders (1986) showed under general conditions that an atomless NTU game with finite types of players has a core allocation when coalitions have a finite number of players. In this paper, we provide a direct proof of the above result using Kakutani’s fixed point theorem when the sizes of coalitions are not only finite but also bounded above. This condition simplifies the presentation of the model and the existence proof. Most importantly, we can drop the comprehensiveness assumption, allowing for a much wider applicability of the result for matching problems, as well as for hedonic coalition formation problems. Additionally, without comprehensiveness, f-core allocations might not possess equal-treatment in payoffs for the same type. We also note that the nonemptiness of the core of NTU games by Scarf (1971) can be derived from our result as a corollary.
    Keywords: f-core, comprehensiveness, atomless players
    JEL: C71 C78
    Date: 2023–12–02
  14. By: Mankat, Fabian
    JEL: C70 C73 Z13
    Date: 2023
  15. By: Marco Catola; Alessandra Chirco; Marcella Scrimitore
    Abstract: By developing a linear model in a two-country framework of international price competition, we show how the degree of product differentiation and the cross-country distribution of private firms affect the strategic privatization choices made by governments concerned with their own country’s welfare. More particularly, the work points out that sufficiently low product differentiation may lead public ownership to be optimally chosen to restrict competition in the country with the larger number of firms, and privatization to be global welfare enhancing in this case.
    Keywords: Mixed oligopoly, price competition, strategic privatization, internationalmarkets
    JEL: F23 L13 L32
    Date: 2023–12–01
  16. By: Deniz Kattwinkel; Axel Niemeyer; Justus Preusser; Alexander Winter
    Abstract: A principal must decide between two options. Which one she prefers depends on the private information of two agents. One agent always prefers the first option; the other always prefers the second. Transfers are infeasible. One application of this setting is the efficient division of a fixed budget between two competing departments. We first characterize all implementable mechanisms under arbitrary correlation. Second, we study when there exists a mechanism that yields the principal a higher payoff than she could receive by choosing the ex-ante optimal decision without consulting the agents. In the budget example, such a profitable mechanism exists if and only if the information of one department is also relevant for the expected returns of the other department. We generalize this insight to derive necessary and sufficient conditions for the existence of a profitable mechanism in the n-agent allocation problem with independent types.
    Keywords: Mechanism design without transfers, correlation, zero-sum games
    JEL: D82
    Date: 2023–12
  17. By: Despoina Alempaki (Warwick Business School); Valeria Burdea (LMU Munich); Daniel Read (Warwick Business School)
    Abstract: In cases of conflict of interest, people can lie directly or evade the truth. We analyse this situation theoretically and test the key behavioural predictions in a novel sender-receiver game. We find senders prefer to deceive through evasion rather than direct lying, more so when evasion is a partial-truth. This is because they do not want to deceive others nor be seen as deceptive. Receivers are sensitive to the deceptive language and more likely to act in senders’ favour when these lie directly. Our findings suggest dishonesty is more prevalent and costlier than previous best estimates focusing on direct lies.
    JEL: C91 D82 D91
    Date: 2023–11–04
  18. By: Maarten C.W. Janssen (University of Vienna); Santanu Roy (Southern Methodist University)
    Abstract: A manufacturer with private information about product quality may earn higher expected profit when their wholesale pricing contract with a retailer is unobserved by consumers. Secret wholesale contracts may prevent distortionary signaling by the manufacturer and double marginalization by the retailer. Instead, reasonable pooling outcomes exist where wholesale pricing is independent of quality, leaving the retailer and consumers in the dark about true quality. These outcomes may increase expected consumer and total surplus. The strategic interaction is different from standard signaling games. The pooling outcomes satisfy a new equilibrium refinement that we develop in the spirit of the Intuitive Criterion.
    Keywords: Asymmetric Information; Product Quality; Vertical Contracts; Wholesale Pricing; Signaling; Pooling.
    JEL: L13 L15 D82 D43
    Date: 2023–08
  19. By: Yves Breitmoser (Department of Economics, Bielefeld University.); Lian Xue (Economics and Management School, Wuhan University.); Jiwei Zheng (Department of Economics, Lancaster University Management School); Daniel John Zizzo (School of Economics, University of Queensland, Brisbane, Australia)
    Abstract: This paper explores the impact of incentives on employee performance in chain-type organizations, where workers’ efforts are interdependent on each other while the goals of all workers are aligned. Using a novel information chain game, we examine the role of incentive schemes and the procurement of costly additional information in promoting individual efforts that align with organizational goals. Our results indicate that incentivizing workers based on their own performance, and allowing them to verify information at low costs, leads to the best outcomes in chain-type organizations. This way, the firm’s profit and agents’ incomes can all be improved compared to incentivization based on the organizational goal. Additionally, we find that there is no close correlation between an individual’s own effort level and their elicited beliefs about the accuracy of the input coming from upstream agents. Our study provides valuable insights into the design of effective incentive schemes and error prevention strategies in chain-type organizations..
    Keywords: information chains, errors, incentives, welfare, adaptive coding.
    JEL: C72 C91 D83
    Date: 2023–12
  20. By: Isa Hafalir (University of Technology Sydney); Onur Kesten (University of Sydney); Katerina Sherstyuk (University of Hawaii at Manoa); Cong Tao (University of Technology Sydney)
    Abstract: We study a remarkable auction used in several fish markets around the world, notably in Honolulu and Sydney, whereby high-quality fish are sold fast through a hybrid auction that combines the Dutch and the English formats in one auction. Speedy sales are of essence for these perishable goods. Our theoretical model incorporating Òtime costsÓ demonstrates that such Honolulu-Sydney auction is preferred by the auctioneer over the Dutch auction when there are few bidders or when bidders have high time costs. Our laboratory experiments confirm that with a small number of bidders, Honolulu-Sydney auctions are significantly faster than Dutch auctions. Bidders overbid in Dutch, benefiting the auctioneer, but bidding approaches risk-neutral predictions as time costs increase. Bidders fare better in the Honolulu-Sydney format compared to Dutch across all treatments. We further observe bidder attempts to tacitly lower prices in Honolulu- Sydney auctions, substantiating existing concerns about pricing in some fish markets.
    Keywords: auction theory, time costs, laboratory experiments
    JEL: C7 C92 D02 D44 L0
    Date: 2023–12
  21. By: Madhuri H.Shastry (Department of Economics, Delhi School of Economics); Uday Bhanu Sinha (Department of Economics, Delhi School of Economics)
    Abstract: We analyse the interplay of privatization and technology licensing under a public budget constraint, where a cost-disadvantaged public firm has to generate profits to pay for the license. In a mixed duopoly, we consider the licensing of a cost-reducing technology by an outsider innovator. The innovator chooses to license smaller sizes of innovation to both firms, whereas, larger innovation is licensed exclusively to the private firm. The public firm alone never gets the license. Thus, the public firm can never “catch up” with its more efficient private rival. We find the possibility of both partial and full privatization in our model. Additionally, from a social planner’s perspective, it is always optimal to allocate licenses to both firms.
    Keywords: mixed duopoly; technology licensing; privatization; budget constraint; welfare. JEL codes: L32, L33, H42, O33, O38
    Date: 2023–12
  22. By: Hideo Konishi (Boston College); Chen-Yu Pan (National Chengchi University, Taiwan); Dimitar Simeonov (Bahçeşehir University)
    Abstract: We consider a team contest in which players make efforts to compete with other teams for a prize, and players of the winning team divide the prize according to a prize-sharing rule. This prize-sharing rule matters in generating members’ efforts and attracting players from outside. Assuming that players differ in their abilities to contribute to a team and their abilities are observable, we analyze which team structure is realized by allowing players to move across teams. This inter-team mobility is achieved via head-hunting: a team leader can offer one of the positions to an outside player. We say that it is a successful head-hunting if the player is better off by taking the position, and the team’s winning probability is improved. A team structure is stable if there is no successful head-hunting opportunity. We show that if all teams employ the egalitarian sharing rule, then the complete sorting of players according to their abilities occurs, and inter-team inequality becomes the largest. In contrast, if all teams employ a substantially unequal sharing rule, there is a stable team structure with a small inter-team inequality and a large intra-team inequality. This result illustrates a trade-off between intra-team inequality and inter-team inequality in forming teams.
    Keywords: group contest, pairwise stable matching, assortative matching, farsightedness, largest consistent set, effectiveness function
    JEL: C71 C72 C78 D71 D72 D74
    Date: 2023–11–18
  23. By: Hideo Konishi (Boston College); Nicolas Sahuguet (HEC Montreal); Benoit Crutzen (Erasmus School of Economics)
    Abstract: We analyze contests in which teams compete to win indivisible homogeneous prizes. Teams are composed of members who may differ in their ability, and who exert effort to increase the success of their team. Each team member can obtain at most one prize as a reward. As effort is costly, teams use the allocation of prizes to give incentives and solve the free-riding problem. We develop a two-stage game. First, teams select a prize-allocation rule. Then, team members exert effort. Members take into account how their effort and the allocation rule influence the chance they receive a prize. We prove the existence and uniqueness of equilibrium. We characterize the optimal prize-assignment rule and individual and aggregate efforts. We then show that the optimal assignment rule is generally not monotonic.
    Keywords: contest, team, moral hazard
    JEL: C72 D72
    Date: 2023–12–02
  24. By: Curello, Gregorio
    JEL: C73 D82
    Date: 2023
  25. By: Spektor Stanislav (Department of Economics, Lomonosov Moscow State University); Nazarova Ekaterina (Department of Economics, Lomonosov Moscow State University); Akhtemzyanov Rafael (Department of Economics, Lomonosov Moscow State University)
    Abstract: The distinction between the concepts of market power and bargaining power is not only a methodological, but also a practical problem. The paper describes the currently existing approaches to understanding these phenomena. An attempt has been made to include not only market power, but also bargaining power in the theoretical model. In addition, game-theoretic models of interaction between market participants with an asymmetric distribution of market power and bargaining power between them are considered. Also in the work in the context of the ratio of bargaining power between agents one of the classical economic experiments is considered. The article describes real situations in which a correct understanding of market power and bargaining power was very important for making a decision on the need to apply antitrust regulation measures. Antimonopoly regulation is currently focused on considering only market power, however, when determining the justification for the use of certain influences, it should be borne in mind that manifestations of market power may be similar to the effects of asymmetry in the distribution of bargaining power, and it is also necessary to clearly distinguish between these phenomena. At the same time, an individual approach is required for each case to assess the impact on public welfare of both the phenomena themselves and the regulatory influences applied. Length: 33 pages
    Keywords: market power, bargaining power, antitrust policy, competition, bilateral monopoly, experimental economics
    JEL: K21 L40 L41 L50
    Date: 2023–12
  26. By: Tobias Cagala (Deutsche Bundesbank); Ulrich Glogowsky (University of Linz); Johannes Rincke (University of Erlangen-Nuremberg); Simeon Schudy (Ulm University)
    Abstract: Using a standard cheating game, we investigate whether the request to sign a no-cheating declaration affects truth-telling. Our design varies the content of a no-cheating declaration (reference to ethical behavior vs. reference to possible sanctions) and the type of experiment (online vs. offline). Irrespective of the declaration's content, commitment requests do not affect truth-telling, neither in the laboratory nor online. The inefficacy of commitment requests appears robust across different samples and does not depend on psychological measures of reactance.
    Keywords: cheating; lying; truth-telling; compliance; commitment; no-cheating rule; no-cheating declaration; commitment request;
    JEL: C91 C93 D03
    Date: 2023–11–27
  27. By: Eugenio Levi (Department of Public Economics, Masaryk University, Brno, 602 00, Czech Republic, Faculty of Economics and Management, Free University of Bozen-Bolzano, Bozen-Bolzano, 39100, Italy); Abhijit Ramalingam (Department of Economics, Walker College of Business, Appalachian State University, Boone, NC 28608, United States)
    Abstract: While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. Our results suggest that this is related to a combination of within- and between-group inequality aversion and to stereotypes about the rich contributing less than the poor.
    Keywords: between-group, resource inequality, cooperation, public goods, online experiment, beliefs
    JEL: C72 C91 C92 D63 H41
    Date: 2023–12
  28. By: Hönow, Nils Christian; Pourviseh, Adrian
    Abstract: Communication is well known to increase cooperation rates in social dilemma situations, but the exact mechanisms behind this have been questioned and discussed. This study examines the impact of communication on public good provisioning in an artefactual field experiment conducted with 216 villagers from small, rural communities in northern Namibia. In line with previous experimental findings, we observe a strong increase in cooperation when face-to-face communication is allowed before decision making. We additionally introduce a condition in which participants cannot discuss the dilemma but talk to their group members about an unrelated topic prior to learning about the public good game. It turns out that this condition already leads to higher cooperation rates, albeit not as high as in the condition in which discussions about the social dilemma are possible. The setting in small communities also allows investigating the effect of pre-existing social relationships between group members and their interaction with communication. We find that both types of communication are primarily effective among socially more distant group members, which suggests that communication and social ties work as substitutes in increasing cooperation. Further analyses rule out better comprehension of the game and increased mutual expectations of one's group members' contributions as drivers for the communication effect. Finally, we discuss the role of personal and injunctive norms to keep commitments made during discussions.
    Abstract: Es ist bekannt, dass direkte, persönliche Kommunikation zwischen involvierten Personen die Kooperationsbereitschaft in sozialen Dilemmata merklich erhöht, jedoch sind die genauen Mechanismen dahinter noch nicht vollständig geklärt. Diese Studie untersucht die Auswirkungen von Kommunikation auf die Bereitstellung öffentlicher Güter ('Public Good Game') in einem Feldexperiment, das mit 216 Dorfbewohnerinnen und Dorfbewohnern aus kleinen, ländlichen Gemeinschaften im Norden Namibias durchgeführt wurde. In Übereinstimmung mit bestehenden Erkenntnissen beobachten wir einen starken Anstieg der Kooperation, wenn Gruppenmitglieder vor ihrer Entscheidung miteinander reden können. Darüber hinaus testen wir eine Bedingung, in der die Teilnehmenden nicht über das Dilemma reden können, sondern mit ihren Gruppenmitgliedern über ein anderes Thema ohne Bezug zum Public Good Game sprechen, bevor sie das Spiel kennenlernen. Es zeigt sich, dass diese Bedingung bereits zu mehr Kooperation führt, wenn auch nicht so stark wie in der Bedingung, in der Diskussionen über das soziale Dilemma möglich sind. Der Studienkontext in kleinen Gemeinschaften erlaubt es auch, die Auswirkungen bereits bestehender sozialer Beziehungen zwischen den Gruppenmitgliedern und deren Interaktion mit Kommunikation zu untersuchen. Wir stellen fest, dass beide Arten der Kommunikation vor allem bei sich weniger nahestehenden Gruppenmitgliedern wirksam sind, was darauf hindeutet, dass Kommunikation und soziale Bindungen als Substitute für die Steigerung von Kooperation wirken. Weitere Analysen schließen ein besseres Verständnis des Spiels und erhöhte gegenseitige Erwartungen an die Beiträge der Gruppenmitglieder als Erklärungen für den Effekt von Kommunikation aus. Schließlich erörtern wir die Rolle persönlicher und injunktiver Normen zur Einhaltung getroffener Absprachen.
    Keywords: Communication, cooperation, field experiment, public good, social ties
    JEL: C71 C93 D8 D9 H41 Q5 Z1
    Date: 2023
  29. By: Vincent Anesi (DEM, Université du Luxembourg); Peter Buisseret (Department of Government, Harvard University, USA)
    Abstract: We develop a dynamic model in which a group collectively bargains with an external party. At each date the group makes an offer to the external party (the ‘agent’) in exchange for a concession. Group members hold heterogeneous preferences over agreements and are uncertain about the agent’s resolve. We show that all group members favor more aggressive proposals than they would if they were negotiating alone. By eliciting more information about the agent’s resolve, these offers reduce the group members’ uncertainty about the agent’s preferences and therefore reduce the group’s internal conflicts over its negotiating strategy. To mitigate the consequent risk that negotiations fail, decisive group members successively give up their influence over proposals: starting from any initially democratic decision process, the group eventually consolidates its entire negotiation authority into the hands of a single member
    Keywords: Adverse selection, collective choice, political economy, dictatorship, bargaining.
    JEL: D02 D71 D78 D82 L22
    Date: 2023

This nep-gth issue is ©2024 by Sylvain Béal. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.