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on Game Theory |
| By: | Silvia Faggian (Ca’ Foscari University of Venice); Dominika Machowska (University of Warsaw); Agnieszka Wiszniewska-Matyszkiel (University of Warsaw) |
| Abstract: | This paper investigates the formation of stable coalitions in a differential game of resource extraction where players' resource deposits are interdependent and spatial relations between them are represented as a network. The network structure allows heterogeneity in the spatial distribution of extractable resources. We introduce a new framework for cooperative extraction in which, in addition to side payments, extraction rights can also be shared. The main contribution is the identification of conditions under which partial coalitions with more than three players can be stable, and under which the grand coalition can also be stable. Illustrative examples of such games are provided. |
| Keywords: | resource extraction, network, the tragedy of the commons, cooperation, partial cooperation, stability of coalitions |
| JEL: | C61 C71 C72 C73 D85 Q20 Q21 Q30 Q32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:18 |
| By: | Tushar Shankar Walunj; Veeraruna Kavitha; Jayakrishnan Nair; Priyank Agarwal |
| Abstract: | We study a recommendation system where sellers compete for visibility by strategically offering commissions to a platform that optimally curates a ranked menu of items and their respective prices for each customer. Customers interact sequentially with the menu following a cascade click model, and their purchase decisions are influenced by price sensitivity and positions of various items in the menu. We model the seller-platform interaction as a Stackelberg game with sellers as leaders and consider two different games depending on whether the prices are set by the platform or prefixed by the sellers. It is complicated to find the optimal policy of the platform in complete generality; hence, we solve the problem in an important asymptotic regime. The core contribution of this paper lies in characterizing the equilibrium structure of the limit game. We show that when sellers are of different strengths, the standard Nash equilibrium does not exist due to discontinuities in utilities. We instead establish the existence of a novel equilibrium solution, namely `$\mu$-connected equilibrium cycle' ($\mu$-EC), which captures oscillatory strategic responses at the equilibrium. Unlike the (pure) Nash equilibrium, which defines a fixed point of mutual best responses, this is a set-valued solution concept of connected components. This novel equilibrium concept identifies a Cartesian product set of connected action profiles in the continuous action space that satisfies four important properties: stability against external deviations, no external chains, instability against internal deviations, and minimality. We extend a recently introduced solution concept equilibrium cycle to include stability against measure-zero violations and, by avoiding topological difficulties to propose $\mu$-EC. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.13462 |
| By: | Maria Titova; Kun Zhang |
| Abstract: | This paper studies a game in which an informed sender with state-independent preferences uses verifiable messages to convince a receiver to choose an action from a finite set. We characterize the equilibrium outcomes of the game and compare them with commitment outcomes in information design. We provide conditions under which a commitment outcome is an equilibrium outcome and identify environments in which the sender does not benefit from commitment power. Our findings offer insights into the interchangeability of verifiability and commitment in applied settings. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.08251 |
| By: | Francesc Dilmé (University of Bonn) |
| Abstract: | We analyze limiting equilibrium behavior along perturbations of a game in which both nature and strategic players tremble with small probability. We show that allowing nature to tremble to zero-probability actions expands the set of sequential equilibria and contracts the set of sequentially stable outcomes while preserving their existence. By extending a game through adding initial zero-probability moves by nature, we identify conditions for the existence of reputation effects, that is, changes in the model’s predictions due to the presence of payoff types. Finally, we discuss the relationship between reputation effects and forward induction arguments |
| Keywords: | Sequential equilibria, purification, mixed strategies |
| JEL: | C72 C73 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:373 |
| By: | Alan Hammond |
| Abstract: | Brownian Boost is a one-parameter family of stochastic differential games played on the real line in which players spend at rates of their choosing in an ongoing effort to influence the drift of a randomly diffusing point particle~$X$. One or other player is rewarded, at time infinity, according to whether~$X$ tends to plus or minus infinity. Each player's net receipt is the final reward (only for the victor) minus the player's total spend. We characterise and explicitly compute the time-homogeneous Markov-perfect Nash equilibria of Brownian Boost, finding the derivatives of the players' expected payoffs to solve a pair of coupled first-order non-linear ODE. Brownian Boost is a high-noise limit of a two-dimensional family of player-funded tug-of-war games, one of which was studied in~\cite{LostPennies}. We analyse the discrete games, finding them, and Brownian Boost, to exemplify key features studied in the economics literature of tug-of-war initiated by~\cite{HarrisVickers87}: a battlefield region where players spend heavily; stakes that decay rapidly but asymmetrically in distance to the battlefield; and an effect of discouragement that makes equilibria fragile under asymmetric perturbation of incentive. Tug-of-war has a parallel mathematical literature derived from~\cite{PSSW09}, which solved the scaled fair-coin game in a Euclidean domain via the infinity Laplacian PDE. By offering an analytic solution to Brownian Boost, a game that models strategic interaction and resource allocation, we seek to build a bridge between the two tug-of-war literatures. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.07682 |
| By: | Francesc Dilmé (University of Bonn) |
| Abstract: | An equilibrium outcome of a game in extensive form is fully self-justifiable if it is supported by justifiable equilibria (McLennan, 1985) regardless of the order in which actions implausible under the given outcome are excluded. We show that the set of fully self-justifiable outcomes is non-empty and contains the set of sequentially stable outcomes (Dilmé, 2024). In signaling games, fully self-justifiable outcomes pass all the selection criteria in Cho and Kreps (1987). Full self-justifiability allows for the systematic use of the logic of selection criteria in signaling games to select equilibria in any finite extensive form game. |
| Keywords: | Justifiable equilibria, selection criteria |
| JEL: | C72 C73 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:375 |
| By: | Joy Das Bairagya; Udipta Chakraborti; Sumana Annagiri; Sagar Chakraborty |
| Abstract: | Navigation through narrow passages during colony relocation by the tandem-running ants, $\textit{Diacamma}$ $\textit{indicum}$, is a tour de force of biological traffic coordination. Even on one-lane paths, the ants tactfully manage a bidirectional flow: Informed individuals (termed leaders) guide nest-mates (termed followers) from a suboptimal nest to a new optimal nest, and then return to recruit additional followers. We propose that encounters between the ants moving in opposite directions can be modelled within the framework of game theory leading to an understanding of the mechanism behind observed behaviours. Our experiments reveal that, upon encountering a tandem pair (a leader and its follower) on a narrow path, the returning leader reverses her direction and proceeds toward the new nest again as if she becomes the leader guiding a follower. This observed behaviour is consistent with game-theoretic predictions, provided the assumption of perfect rationality is relaxed in favour of bounded rationality -- specifically, procedural rationality. In other words, the experimental outcomes are consistent with sampling equilibrium but not with Nash equilibrium. Our work, which strives to induct the essence of behavioural game theory into the world of ants, is first ever report of realizing sampling equilibrium in scenarios not involving human players. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.17147 |
| By: | Anand Chopra; Malachy James Gavan; Antonio Penta |
| Abstract: | Safe Implementation (Gavan and Penta, 2025) combines standard implementation with the requirement that the implementing mechanism is such that, if up to k agents deviate from the relevant solution concept, the outcomes that are induced are still ‘acceptable’ at every state of the world. In this paper, we study Safe Implementation of social choice correspondences in mixed Nash Equilibrium. We identify a condition, Set-Comonotonicity, which is both necessary and (under mild domain restrictions) almost sufficient for this implementation notion. |
| Keywords: | Implementation, mechanism design, robustness, safe implementation, mixed implementation, Set-Comonotonicity |
| JEL: | C72 D82 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:upf:upfgen:1911 |
| By: | Emiliano Cantonini; Antonio Penta |
| Abstract: | Backward Induction is only defined for games with perfect information, but its logic is also invoked in many equilibrium concepts for games with imperfect or incomplete information. Yet, the meaning of 'backward induction reasoning' is unclear in these settings, and we lack a way to apply its simple logic to general games. We remedy this by introducing a solution concept, Backwards Rationalizability, that satisfies several properties normally ascribed to backward induction reasoning, foremost the possibility of being computed via a tractable backwards procedure. We also show that Backwards Rationalizability characterizes the robust predictions of a 'perfect equilibrium' notion that introduces the backward induction logic and nothing more into equilibrium analysis. We discuss a few applications, including a new version of peer-confirming equilibrium (Lipnowski and Sadler (2019)) that, thanks to Backwards Rationalizability, restores in dynamic games the natural comparative statics that the original concept only displays in static settings. |
| Keywords: | backward induction, backwards procedure, backwards rationalizability, incomplete information, interim perfect equilibrium, perfect bayesian equilibrium rationalizability, robustness |
| JEL: | C72 C73 D82 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:upf:upfgen:1894 |
| By: | Gerson Personnat; Tao Lin; Safwan Hossain; David C. Parkes |
| Abstract: | In a multi-follower Bayesian Stackelberg game, a leader plays a mixed strategy over $L$ actions to which $n\ge 1$ followers, each having one of $K$ possible private types, best respond. The leader's optimal strategy depends on the distribution of the followers' private types. We study an online learning version of this problem: a leader interacts for $T$ rounds with $n$ followers with types sampled from an unknown distribution every round. The leader's goal is to minimize regret, defined as the difference between the cumulative utility of the optimal strategy and that of the actually chosen strategies. We design learning algorithms for the leader under different feedback settings. Under type feedback, where the leader observes the followers' types after each round, we design algorithms that achieve $\mathcal O\big(\sqrt{\min\{L\log(nKA T), nK \} \cdot T} \big)$ regret for independent type distributions and $\mathcal O\big(\sqrt{\min\{L\log(nKA T), K^n \} \cdot T} \big)$ regret for general type distributions. Interestingly, those bounds do not grow with $n$ at a polynomial rate. Under action feedback, where the leader only observes the followers' actions, we design algorithms with $\mathcal O( \min\{\sqrt{ n^L K^L A^{2L} L T \log T}, K^n\sqrt{ T } \log T \} )$ regret. We also provide a lower bound of $\Omega(\sqrt{\min\{L, nK\}T})$, almost matching the type-feedback upper bounds. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.01387 |
| By: | Holmberg, Pär; Willems, Bert; Ruddell, Keith |
| Abstract: | We characterize Nash equilibria in multi-product markets in which producers commit to vectors of supply functions contingent on all prices. The framework accommodates (dis)economies of scope in production, and goods may be substitutes or complements in demand. We show that equilibrium allocations of underlying goods and payoffs are invariant under bundling. With quadratic costs and linear demand, this invariance reduces the multi-product problem to an equivalent set of single-product markets that can be analyzed independently. We introduce Lerner and pass-through matrices to capture markups and welfare losses; their eigenvalues summarize fundamental market properties, remain invariant under bundling, and lend themselves to comparative statics analysis. |
| Keywords: | Supply function equilibrium; multi-product pricing; divisible-good auction;; bundling; pass-through; welfare |
| JEL: | C62 C72 D43 D44 L94 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130961 |
| By: | Oliver Slumbers; Benjamin Patrick Evans; Sumitra Ganesh; Leo Ardon |
| Abstract: | Game theory has traditionally had a relatively limited view of risk based on how a player's expected reward is impacted by the uncertainty of the actions of other players. Recently, a new game-theoretic approach provides a more holistic view of risk also considering the reward-variance. However, these variance-based approaches measure variance of the reward on both the upside and downside. In many domains, such as finance, downside risk only is of key importance, as this represents the potential losses associated with a decision. In contrast, large upside "risk" (e.g. profits) are not an issue. To address this restrictive view of risk, we propose a novel solution concept, downside risk aware equilibria (DRAE) based on lower partial moments. DRAE restricts downside risk, while placing no restrictions on upside risk, and additionally, models higher-order risk preferences. We demonstrate the applicability of DRAE on several games, successfully finding equilibria which balance downside risk with expected reward, and prove the existence and optimality of this equilibria. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.03446 |
| By: | Wanying Huang; J. Jude Kline; Priscilla Man |
| Abstract: | We propose a refinement of correlated equilibrium based on mediator errors, called correlated perfect equilibrium (CPE). In finite games, the set of CPE is nonempty and forms a finite union of convex sets. Like perfect equilibrium, a CPE never assigns positive probability to any weakly dominated strategy. We provide a dual representation of CPE and demonstrate how it differs from two existing refinements of correlated equilibrium--acceptable correlated equilibrium (Myerson, 1986) and perfect direct correlated equilibrium (Dhillon-Mertens, 1996)--through examples. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.07906 |
| By: | Arega Getaneh Abate; Salim Hassi; Dogan Keles; Xiufeng Liu; Xiao-Bing Zhang |
| Abstract: | The transition to electricity systems powered entirely by renewable energy sources makes energy storage indispensable for balancing intermittency and ensuring reliability. Since RES operate at near-zero marginal cost, storage operators can strongly influence electricity prices and energy security when renewable supply alone cannot meet demand. We develop a Cournot competition model in which storage operators strategically bid quantities to maximize their profits. We propose a MILP model with the big-M method and reformulation using continuous variables, incorporating demand blocks. The strategic bidding game is solved using the diagonalization algorithm, and the social planner's problem is used for benchmarking, cast as a one-shot optimization. The proposed model is applied to Denmark's power system using current data and 2030 renewable projections, capturing both current and future market conditions. Results show that storage operators affect market performance by arbitrage between low-and high-price periods, which can smooth supply-demand imbalances, thereby improving welfare relative to the no-storage case. With limited competition, however, strategic withholding increases prices and reduces welfare, while expanding storage capacity beyond a certain point yields no further gains. As the number of firms increases, competition mitigates distortions, and outcomes converge toward the social planner's benchmark with only two to three strategic players. These findings highlight storage's dual role in both stabilizing markets and creating market power. underscoring the need for market designs that align operators' incentives with social welfare. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.26568 |
| By: | Li, Bingbing (Center for Mathematical Economics, Bielefeld University); Förster, Manuel (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | In our principal-agent model, the principal can repeatedly delegate authority to an agent with uncertain preferences or take the decisions himself. The principal learns the state at the end of each period and then updates his belief about the agent’s bias based on the decision implemented if he delegated authority. We demonstrate that equilibria are characterized by an “imitation” interval of agent types (biases) who mimic less biased types in order to be retained. Interestingly, the principal generally benefits from the agent’s imitation compared to a benchmark. Furthermore, comparative statics reveal that, surprisingly, the principal may be worse off with better information. Finally, an extension to finitely many periods shows that the imitation interval gradually shifts, such that agent types within the interval imitate less biased types. |
| Keywords: | Delegation, preference uncertainty, private information, dynamic game, organizational design |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:753 |
| By: | Tonghui Qi |
| Abstract: | Many auction datasets with reserve prices do not include bids that fall below the reserve. This paper establishes nonparametric identification results in first- and second-price auctions when transaction prices are truncated by a binding reserve price under a range of information structures. In the simplest case-where the number of potential bidders is fixed and known across all auctions-if only the transaction price is observed, the bidders' private-value distribution is identified in second-price auctions but not in first-price auctions. Identification in first-price auctions can be achieved if either the number of active bidders (those whose bids exceed the reserve) or the number of auctions with no sales (all bids below the reserve) is observed. When the number of potential bidders varies across auctions and is unknown, the bidders' private-value distribution is identified in first-price auctions but not in second-price auctions, provided that both the transaction price and the number of active bidders are observed. Finally, I extend these results to auctions with entry costs, which face a similar truncation issue when data on potential bidders who do not enter are missing. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.04464 |
| By: | Masayuki Odora (Global Education Center, Waseda University) |
| Abstract: | I study the role of fact-checking in a two-period strategic communication game between a decision maker and a media outlet. The decision maker relies on the outlet’s article to take a binary action, while the outlet may exert costly effort to acquire information before publishing. The decision maker is uncertain about the outlet’s motive: the outlet might be opportunistic, caring only about attracting clicks. Fact-checking probabilistically reveals the payoff-relevant state. I highlight a trade-off between the diagnostic effect and the discipline effect that arises when the probability of fact-checking successfully revealing the state increases. Consequently, introducing fact-checking or increasing its success probability may, in some parameter ranges, reduce the decision maker’s welfare. |
| Keywords: | Fact-checking, Information acquisition, Cheap-talk |
| JEL: | C72 D83 L82 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2521 |
| By: | Francesc Dilmé (University of Bonn); Aaron Kolb (Kelley School of Business, Indiana University) |
| Abstract: | We revisit the classic chain-store paradox by introducing a novel element: the arrival of exogenous, public signals about the incumbent’s private type over time. As the horizon lengthens, two opposing forces come into play. On one hand, standard reputational incentives grow stronger; on the other, the increasing availability of information makes it more difficult to sustain a reputation. We show that full deterrence can still emerge as the horizon grows arbitrarily long, though not always, and we provide a complete characterization of the conditions under which it arises. |
| Keywords: | Entry deterrence, reputation, chain-store paradox |
| JEL: | C72 C73 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:374 |
| By: | Matteo Bizzarri (Università di Napoli Federico II, Napoli, Italy); Fernando Vega-Redondo (The Chinese University of Hong Kong, Hong Kong) |
| Abstract: | We quantify a parsimonious model of oligopolistic competition with common ownership in input–output networks. Using Spanish data on demand, ownership, and input–output linkages, we estimate the overall welfare effect of common ownership. Input–output linkages introduce a theoretical channel through which common ownership could improve welfare. We find that this channel exists but is not strong enough to offset the reduction in competition: common ownership has a negative welfare effect, though weaker than in the absence of input–output linkages. Finally, we introduce a parameterized ownership separation to compute a firm-level index of the anti-competitiveness of common ownership. |
| Keywords: | production networks, network games, common ownership, oligopoly |
| JEL: | D43 D57 D85 L13 L16 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:25-05 |
| By: | Emilie Dargaud (Université Lumière Lyon 2, CNRS, Université Jean Monnet Saint Etienne, EMLyon Business School, GATE, 69007 Lyon, France); Mickaël Lallouche (Université Lumière Lyon 2, Université Claude Bernard Lyon 1, ERIC, 69007, Lyon, France); Petros G. Sekeris (TBS Business School, 1 Place A. Jourdain, 31000 Toulouse, France) |
| Abstract: | We analyze corporate groups managing horizontally differentiated, substitutable firms that share cost externalities yet compete strategically. Using a model with two groups each owning two firms producing goods under distinct brands, we study the choice between centralized and decentralized management. Our results show that when cost externalities are low, decentralization can emerge as equilibrium despite centralization being Pareto superior, due to strategic incentives resembling the “merger paradox”. With stronger cost synergies, centralization dominates, though product differentiation creates multiple equilibria. The findings refine our understanding of corporate organizational design in imperfectly competitive markets. |
| Keywords: | Organizational design, Strategic delegation, Horizontal differentiation |
| JEL: | L13 L22 L25 D21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2520 |
| By: | Jiaxin Song; Pooja Kulkarni; Parnian Shahkar; Bhaskar Ray Chaudhury |
| Abstract: | The rapid growth of data-driven technologies and the emergence of various data-sharing paradigms have underscored the need for efficient and stable data exchange protocols. In any such exchange, agents must carefully balance the benefit of acquiring valuable data against the cost of sharing their own. Ensuring stability in these exchanges is essential to prevent agents -- or groups of agents -- from departing and conducting local (and potentially more favorable) exchanges among themselves. To address this, we study a model where agents participate in a data exchange. Each agent has an associated payoff for the data acquired from other agents and a cost incurred during sharing its own data. The net utility of an agent is payoff minus the cost. We adapt the classical notion of core-stability from cooperative game theory to data exchange. A data exchange is core-stable if no subset of agents has any incentive to deviate to a different exchange. We show that a core-stable data exchange is guaranteed to exist when agents have concave payoff functions and convex cost functions -- a setting typical in domains like PAC learning and random discovery models. We show that relaxing either of the foregoing conditions may result in the nonexistence of core-stable data exchanges. Then, we prove that finding a core-stable exchange is PPAD-hard, even when the potential blocking coalitions are restricted to constant size. To the best of our knowledge, this provides the first known PPAD-hardness result for core-like guarantees in data economics. Finally, we show that data exchange can be modelled as a balanced $n$-person game. This immediately gives a pivoting algorithm via Scarf's theorem \cite{Scarf1967core}. We show that the pivoting algorithm works well in practice through our empirical results. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.16450 |
| By: | Antonio Cozzolino (NYU Stern, New York University, New York, NY, USA); Cristina Gualdani (School of Economics and Finance, Queen Mary University of London, London, UK); Ivan Gufler (Department of Economics and Finance, University of Bonn, Bonn, Germany); Niccolò Lomys (CSEF and Department of Economics and Statistics, University of Naples Federico II, Naples, Italy); Lorenzo Magnolfi (Department of Economics, University of Wisconsin-Madison, Madison, WI, USA) |
| Abstract: | We develop an econometric framework for recovering structural primitives---such as marginal costs---from price or quantity data generated by firms whose decisions are governed by reinforcement-learning algorithms. Guided by recent theory and simulations showing that such algorithms can learn to approximate repeated-game equilibria, we impose only the minimal optimality conditions implied by equilibrium, while remaining agnostic about the algorithms’ hidden design choices and the resulting conduct---competitive, collusive, or anywhere in between. These weak restrictions yield set identification of the primitives; we characterise the resulting sets and construct estimators with valid confidence regions. Monte~Carlo simulations confirm that our bounds contain the true parameters across a wide range of algorithm specifications, and that the sets tighten substantially when exogenous demand variation across markets is exploited. The framework thus offers a practical tool for empirical analysis and regulatory assessment of algorithmic behaviour. |
| Keywords: | Algorithms; Reinforcement Learning; Repeated Games; Coarse Correlated Equilibrium; Partial Identification; Incomplete Models |
| JEL: | C1 C5 C7 D8 L1 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2504 |
| By: | Maria Haydee Fonseca-Mairena (Department of Economics and Management, Catholic University of the Maule Region, Talca, Chile); Matteo Triossi (Venice School of Management, Università Ca' Foscari Venice) |
| Abstract: | We study the connection between cores and strategy-proofness in environments with externalities. With this objective in mind, we present a new concept of the core that relies on agents' expectations about their peers' reactions to group deviations. It encompasses several core consistent solutions previously proposed in the literature for environments with externalities. It allows us to prove that essentially single-valued cores are necessary and sufficient for strategy-proof, efficient, and individually rational mechanisms. |
| Keywords: | Allocation problems, Core, Expectations, Externalities, Strategy-proofness. |
| JEL: | C71 C72 C78 D62 D78 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:vnm:wpdman:217 |
| By: | Shawn Berry |
| Abstract: | Traffic congestion represents a complex urban phenomenon that has been the subject of extensive research employing various modeling techniques grounded in the principles of physics and molecular theory. Although factors such as road design, accidents, weather conditions, and construction activities contribute to traffic congestion, driver behavior and decision-making are primary determinants of traffic flow efficiency. This study introduces a driver behavior archetype model that quantifies the relationship between individual driver behavior and system-level traffic outcomes through game-theoretic modeling and simulation (N = 500, 000) of a three-lane roadway. Mann-Whitney U tests revealed statistically significant differences across all utility measures (p 2.0). In homogeneous populations, responsible drivers achieved substantially higher expected utility (M = -0.090) than irresponsible drivers (M = -1.470). However, in mixed environments (50/50), irresponsible drivers paradoxically outperformed responsible drivers (M = 0.128 vs. M = -0.127), illustrating a social dilemma wherein defection exploits cooperation. Pairwise comparisons across the six driver archetypes indicated that all irresponsible types achieved equivalent utilities while consistently surpassing responsible drivers. Lane-specific analyses revealed differential capacity patterns, with lane 1 exhibiting a more pronounced cumulative utility decline. These findings offer a robust framework for traffic management interventions, congestion prediction, and policy design that aligns individual incentives with collective efficiency. Directions for future research were also proposed. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.04740 |
| By: | Migrow, Dimitri (University of Edinburgh); Park, Hyungmin (University of Warwick); Squintani, Francesco (University of Warwick) |
| Abstract: | We study a leader’s choice of advisors, balancing political alignment, informational competence, and diversity of views. The leader can consult one or two advisors : one is politically aligned but less informed or shares potentially redundant information; the other is better informed but more biased. The leader’s optimal strategy can exhibit reversals. If both advisors are initially consulted, increasing the bias of the more biased advisor may cause the leader to exclude the aligned advisor to preserve truthfulness from the informed one. As bias rises further, the leader ultimately replaces the informed advisor if his bias becomes too large. When the leader is uncertain about the bias of the more informed advisor, increasing the chance of alignment can justify consulting both advisors. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1582 |
| By: | Nicola Meccheri |
| Abstract: | In an international duopoly involving two countries (markets) and two ports, this paper examines how unilateral and passive port cross-ownership interacts with the degree of port privatization and the presence of tariff protection in shaping port performance and welfare outcomes. Port cross-ownership affects the usage fees set by ports in the two countries in different ways but consistently reduces their overall level. Under free trade, this fosters international trade and intensifies product market competition, thereby increasing consumer surplus while reducing firm profits. However, domestic welfare rises only in the country whose port holds a stake in the foreign port. Under tariff protection, by contrast, port cross-ownership induces countries to differentiate their tariff policies, with the country whose port holds a stake in the other setting a lower tariff. As a result, firm profits increase substantially in the other country, while consumers are not excessively disadvantaged. Depending on the degree of privatization, cross-ownership can enhance welfare in both countries, and, counterintuitively, tariff protection may improve welfare only for the country with a foreign port stake. |
| Keywords: | port cross-ownership, privatization, tariff protection, international duopoly |
| JEL: | F13 L13 L33 R48 |
| Date: | 2025–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2025/325 |
| By: | Jacopo Gambato; Bernhard Ganglmair; Julia Krämer |
| Abstract: | In a model of asymmetric regulation, a firm can comply with two regulatory targets, and a regulator can audit the firm for compliance. Inspection by the regulator is imperfect, and it assesses the firm’s compliance with the targets with different success probabilities. The firm fully complies only if compliance costs are low. Otherwise, the firm always prioritizes the requirement that is easier to enforce. Expanding regulatory capacity positively affects compliance with the easy-to-enforce target; however, a higher capacity can harm compliance with the hard-to-enforce target. |
| Keywords: | agency resources, asymmetric enforcement, compliance, multi-tasking, regulation |
| JEL: | H32 K20 L51 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_706 |
| By: | Ivan Rendo (Toulouse School of Economics, University of Toulouse Capitole) |
| Abstract: | Unregulated online platforms often host extreme and socially undesirable content. As mainstream platforms tighten moderation, some users shift to unmoderated alternatives, leading to a leakage of extreme content. I develop a duopoly model where an ad-funded mainstream platform competes with an unmoderated fringe. Heterogeneous users choose platforms and create content reflecting their views. The mainstream platform trades off attracting fringe users with making content safer for advertisers. With strong network effects, the socially optimal moderation is more lenient than the profit-maximizing one. Therefore, regulation mandating stricter moderation may backfire by increasing overall content unsafety. |
| Keywords: | content moderation, platforms, social media, user-generated content. |
| JEL: | L86 L82 L51 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2502 |