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on Game Theory |
| By: | Shurojit Chatterji (Singapore Management University); Takashi Kunimoto (Singapore Management University); Paul Ramos (Singapore Management University) |
| Abstract: | A social choice function (SCF) is said to be Nash implementable (in pure strategies) if there exists a mechanism in which every pure-strategy Nash equilibrium induces outcomes specified by the SCF. The main objective of this paper is to assess the impact of considering mixed-strategy equilibria in Nash implementation. We define compelling Nash implementation as a case where the implementing mechanism possesses a pure-strategy equilibrium that strictly Pareto dominates any undesired mixed-strategy equilibrium. We show that if the finite environment and the SCF to be implemented jointly satisfy what we call Condition COM, then we can construct a finite mechanism which compellingly implements the SCF. We also identify a class of voting environments that satisfies Condition COM, extend Condition COM to accommodate social choice correspondences, and explore a preliminary stability-based justification for the implementing mechanism. Our mechanism has several desirable features: transfers are completely dispensable; only finite mechanisms are considered; integer games are not invoked; and agents’ attitudes toward risk do not affect implementation. |
| Keywords: | Compelling Implementation; Mechanisms; Mixed Strategies; Nash Equilibrium |
| JEL: | C72 D78 D82 |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:021401 |
| By: | Daniela Di Cagno; Werner Güth; Francesca Marazzi; Luca Panaccione |
| Abstract: | We analyze a public goods game with linearly increasing marginal returns to contributions, leading to a non-monotonic group payoff. By allowing the incentive to freeride to persist at all contribution levels, we preserve the usual social dilemma of voluntary public goods provision. We compare two conditions in which both let participants face the voluntary contribution task over a finite number of rounds: one implements it as a static game (Baseline condition), and the other implements it as a dynamic game with four successive stages of simultaneous contribution choices within each round (Milestone condition). Our data show that cooperation in the Baseline condition is rare and mostly limited to the first few rounds. The evidence for the Milestone condition is much more encouraging: contributions beyond suffering are substantial and fairly stable across rounds, although full contributions remain rare. This evidence suggests that the Milestone protocol is a promising institutional device for enhancing voluntary cooperation. |
| Keywords: | experiments, public goods, increasing marginal incentives to contribute, freeriding |
| JEL: | C72 C92 H41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11988 |
| By: | Youngblood, Mason; Marie, Antoine (Aarhus University); Morin, Olivier (Max Planck Society) |
| Abstract: | “Conventions accounts” of conservative behaviors model them as moves in pure coordination games, where agents lose more from failing to coordinate on any equilibrium than from coordinating on a bad equilibrium. Such models are criticised on the grounds that conservatism may spring from private and rigid adherence to the status quo, instead of strategic concerns about coordination. We address this by modeling agents with varying pay-off and long-term memories, using an experience-weighted attraction model. When negotiation is costly, agents playing a pure coordination game can coordinate around one spontaneously emerging “status quo” move, whose existence stabilises “flexible conservative” strategies, playing the status quo move by default but open to negotiation, and “rigidly conservative” strategies that invariably play the status quo. This model explains two empirical phenomena—why conservative strategies can remain stable for a minority only, and bounce back once suppressed—without assuming conformity, group identification, or risk aversion. |
| Date: | 2025–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ngb58_v1 |
| By: | Joshua S. Gans |
| Abstract: | We develop a model of strategic information provision where politicians choose how to allocate limited disclosure across multiple policy dimensions. Citizens are heterogeneous statistical learners who interpret data differently, following Liang (2021). Our key insight: spreading information thinly across many dimensions (“flooding the zone”) maximizes disagreement among citizens, preventing the coordination needed for collective accountability. We characterize equilibrium disclosure strategies and show that politicians with unfavorable private information flood to prevent investigation, while those with favorable information choose intermediate disclosure levels that balance reputation building with enabling scrutiny. The model yields both pooling equilibria that create “transparency theater”—where all politicians provide vast but shallow information—and separating equilibria where disclosure strategies reveal type. We derive threshold conditions showing that flooding dominates when investigation stakes are asymmetric, communication technology enables high dimensionality, and citizen populations are heterogeneous in their information processing. Extensions examine strategic interactions between competing politicians and the mediating role of information platforms in either amplifying or constraining flooding strategies. |
| JEL: | C72 D72 D80 D83 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33933 |
| By: | Kamei, Kenju; Sharma, Smriti; Walker, Matthew |
| Abstract: | This paper presents the first experimental study on how higher-order punishment affects third-party sanction enforcement in the presence of multiple third parties. The design varies across treatments the number of third parties witnessing a norm violation and the opportunities available for third parties to costly punish each other after observing their peers’ enforcement actions. To test generalizability of higher-order enforcement effects, the experiment is conducted across two contrasting societies – India and the United Kingdom – using a prisoner’s dilemma game. These societies are selected for their positions at opposite ends of the tight-loose ancestral kinship spectrum. In both societies, third parties punish defectors who exploit their paired cooperators more strongly than any other person, consistent with prior research. However, punitive patterns differ. In the UK, third parties punish defectors less frequently and less strongly when other third parties are present. However, when higher-order punishments are available among third parties, their failure to punish defectors and acts of anti-social punishment invite strong higher-order punishment from their peers, which encourages their pro-social first-order punishments and makes mutual cooperation a Nash equilibrium outcome in the primary cooperation dilemma. However, in India, overall punishment levels are lower, group size and incentive structure changes have no discernible effects, and higher-order punishments are not better disciplined. These findings support a model of norm conformity for the UK and do not contradict such a model for India. |
| Keywords: | Experiment; Cross-societal variation; Public Goods; Third-party punishment; Higher-order |
| JEL: | C92 D01 H41 |
| Date: | 2025–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125206 |
| By: | Heidelmeier, Lisa; Sahm, Marco |
| Abstract: | We investigate the impact of an environmental award in a Bertrand duopoly with green consumers considering a three-stage game. First, the regulator designs the environmental contest. Second, firms choose their green investments, and the winner of the contest is awarded. Third, firms compete in prices, and consumption takes place. We illustrate that the award not only incentivizes green investments and may thus reduce environmental externalities. As consumers perceive the product of the awarded firm to be of superior quality, it also gives rise to vertical product differentiation. This induces market power, and thus anti-competitive effects: Rents shift from consumers to producers, and consumer surplus may decrease, particularly if marginal investment costs in green technologies are high compared to the strength of environmental damage. |
| Keywords: | Bertrand Competition, Contests, Environmental Award, Green Consumer, Product Differentiation |
| JEL: | D43 H23 L13 L51 Q52 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bamber:319885 |
| By: | Rémi Suchon; Vincent Théroude |
| Abstract: | Cooperation has many economic and social benefits, yet it is vulnerable to inequality. This study examines how the magnitude of inequality affects cooperation, focusing on differences in behavior between individuals randomly assigned to high (i.e. the rich) and low endowments (i.e. the poor). To do so, we use a novel dataset that pools individual-level observations from 24 published experimental linear public good games with unequal endowments. Pooling many studies allows us to study the causal effect of inequality at the participant level, with a substantial variation in levels of inequality. Such a variation would be very hard to get with a single, properly powered experiment. We start by confirming that inequality reduces overall contributions, and that the rich contribute a lower share (“relative contribution”) of their endowment than the poor on average. We further identify a striking asymmetry: as inequality grows, the relative contributions of the rich decrease significantly, while the relative contributions of the poor are not significantly impacted. Therefore, the gap in contributions across statuses increases as inequality gets stronger. We provide a simple model of conditional cooperation that is compatible with our empirical findings. These results may inform the design of policies addressing inequality and social cohesion. |
| Keywords: | Public good game, contribution gap, inequality, meta-analysis. |
| JEL: | C92 H41 D91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-15 |
| By: | Brice Corgnet (EM - EMLyon Business School); Simon Gächter; Roberto Hernán-González |
| Abstract: | In many contractual arrangements where product or service delivery occurs sometime after contracts have been concluded, conditions may change, leading to disputes that need to be resolved often by a third party (arbitrator/mediator). In this paper we introduce the Contractual Dispute Resolution Game (CDRG), which allows us to study dispute resolution through arbitration. Unlike prior research studying arbitration at impasse using zero-sum bargaining games, we analyze a situation where parties can create additional value. We introduce a novel real-effort task, the Car Assembly Real-effort Task (CART), and show in two studies how automated arbitration rules (Study 1) and human arbitrators (Study 2) affect dispute resolution and surplus creation. In Study 1, we find that high-accuracy arbitration enhances efficiency. In Study 2, we find that arbitrators who are incentivized based on the total surplus of the negotiation do also promote greater efficiency. The CDRG provides a valuable tool for examining the effects of arbitration and mediation in settings where contracts are incomplete and can be impacted by shocks. |
| Keywords: | Contractual disputes, Cooperation, Arbitration, Fairness, Risk-sharing, Laboratory experiments, Real-effort experiments, Car Assembly Real-effort Task (CART), Contractual Dispute Resolution Game (CDRG) |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05053021 |
| By: | Gaëtan Fournier (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Alberto Grillo (AMU - Aix Marseille Université, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Yevgeny Tsodikovich (Bar-Ilan University [Israël], AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study candidates' position adjustments in response to information about voters' preferences. Repositioning allows candidates to move closer to the median voter, but it incurs financial and electoral costs. In a subgame-perfect equilibrium, candidates diverge from the center ex ante if the costs of adjustment are sufficiently large. This allows them to increase the chances of a costless victory when the information is strongly in their favor. Our theory highlights a dynamic of moderation during the campaign stage in competitive elections, as well as a prominent role for minor adjustments made preemptively by the favored candidate. JEL Classification: C72, D72, D82 Model. We enrich the Downs-Hotelling framework by introducing an information shock, creating a two-stage game. The shock reveals the location of the median voter. This captures the idea that voters' aggregate preferences fluctuate over time and that their current leanings are disclosed during the electoral cam-This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
| Keywords: | flip-flop, imperfect information, spatial voting, re-positioning |
| Date: | 2025–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05105112 |
| By: | Gabriel, Nathan; Bell, Adrian V.; Smaldino, Paul E. |
| Abstract: | Individual social identities indicate group affiliations and are typically associated with group-typical preferences, signals that indicate group membership, and the propensity to condition actions on the social signals of others, resulting in group-differentiated interaction norms. Past work modeling identity signaling and coordination has typically assumed that individuals belong to one of a discrete set of groups. Yet individuals can simultaneously belong to multiple groups, which may be nested within larger groupings. Here, we introduce the generalized Bach or Stravinsky game, a coordination game with ordered preferences, which allows us to construct a model that captures the overlapping and hierarchical nature of social identity. Our model unifies several prior results into a single framework, including results related to coordination, minority disadvantage, and cross-cultural competence. Our model also allows agents to express complex social identities through multidimensional signaling, which we use to explore a variety of complex group structures. Our consideration of intersectional identities exposes flaws in naive measures of group structure, illustrating how empirical studies may overlook some social identities if they do not consider the behaviors that those identities function to afford. |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:w246t_v1 |
| By: | Roberto Hernán González (BSB Dijon); Praveen Kujal (Middlesex University Business School; Chapman University); Miguel Angel Ropero-García (Universidad de Málaga); Román Fossati (Facultad de Ciencias Económicas, UNICEN) |
| Abstract: | List-pricing and discounting is common in both retail and wholesale markets. Its interpretation amongst competition authorities varies from being procompetitive to collusion facilitating. We experimentally test how list pricing and discounting impact prices in a capacity constrained Bertrand-Edgeworth duopoly with symmetric and asymmetric firms facing constant marginal costs. We find that, relative to the symmetric baseline experiments, list pricing and discounting generate higher equilibrium prices for (symmetric) firms. Prices in the asymmetric-list price duopoly are also higher, however, the effect is much smaller than under symmetry. The introduction of asymmetry results in higher prices. The smaller firms gain more from list pricing and use it to signal price commitment. We also find that the announcement of exactly the same list prices signals sellers´ intentions to set the same market prices. When list prices are different, then the minimum of the list prices works as a coordination device in the market prices stage. Setting the same list prices in the first stage leads to coordination in market prices and to significantly higher prices. |
| Keywords: | List pricing, Discounts, Capacity Constraints, Mixed Strategies, Pure Strategies |
| JEL: | C9 L0 L1 L4 L11 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:25-03 |
| By: | Werner Güth (Max-Planck-Institute for Research on Collective Goods); Ludivine Martin (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, LISER - Luxembourg Institute of Socio-Economic Research); Tibor Neugebauer (uni.lu - Université du Luxembourg = University of Luxembourg = Universität Luxemburg); Sotiria Xanalatou (uni.lu - Université du Luxembourg = University of Luxembourg = Universität Luxemburg) |
| Abstract: | We present an experimental test of a procedurally fair co-determination mechanism where group members reduce their value uncertainty before submitting bids for a joint project. The results suggest a relatively efficient mechanism, with unprofitable projects being largely rejected and profitable ones accepted. Repeated interactions tended to enhance the efficiency, while uncertain information reduced it. The subjects invested surprisingly little search effort to reduce the uncertainty about the costs and benefits, and appeared to trade off search costs against higher bids. JEL Classification: C92; D70; D81; J52; L20 |
| Keywords: | corporate governance, joint venture, experiment, auction, uncertainty |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05068612 |
| By: | de Vos, Wout (Tilburg University, School of Economics and Management); Borm, Peter (Tilburg University, School of Economics and Management); Hamers, Herbert (Tilburg University, School of Economics and Management) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:b21371ea-a12a-4e8d-8b21-f60eb10b6a03 |