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on Game Theory |
| By: | Sam Ganzfried |
| Abstract: | We present an algorithm for computing all evolutionarily stable strategies in nondegenerate normal-form games with three or more players. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.20859 |
| By: | Vikash Kumar Dubey; Suman Chakraborty; Arunava Patra; Sagar Chakraborty |
| Abstract: | Evolutionarily stable strategy (ESS) is the defining concept of evolutionary game theory. It has a fairly unanimously accepted definition for the case of symmetric games which are played in a homogeneous population where all individuals are in same role. However, in asymmetric games, which are played in a population with multiple subpopulations (each of which has individuals in one particular role), situation is not as clear. Various generalizations of ESS defined for such cases differ in how they correspond to fixed points of replicator equation which models evolutionary dynamics of frequencies of strategies in the population. Moreover, some of the definitions may even be equivalent, and hence, redundant in the scheme of things. Along with reporting some new results, this paper is partly indented as a contextual mini-review of some of the most important definitions of ESS in asymmetric games. We present the definitions coherently and scrutinize them closely while establishing equivalences -- some of them hitherto unreported -- between them wherever possible. Since it is desirable that a definition of ESS should correspond to asymptotically stable fixed points of replicator dynamics, we bring forward the connections between various definitions and their dynamical stabilities. Furthermore, we find the use of principle of relative entropy to gain information-theoretic insights into the concept of ESS in asymmetric games, thereby establishing a three-fold connection between game theory, dynamical system theory, and information theory in this context. We discuss our conclusions also in the backdrop of asymmetric hypermatrix games where more than two individuals interact simultaneously in the course of getting payoffs. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.19320 |
| By: | Itai Arieli; Colin Stewart |
| Abstract: | We introduce a model of persuasion in which a sender without any commitment power privately gathers information about an unknown state of the world and then chooses what to verifiably disclose to a receiver. The receiver does not know how many experiments the sender is able to run, and may therefore be uncertain as to whether the sender disclosed all of her information. Despite this challenge, we show that, under general conditions, the sender is able to achieve the same payoff as in the full-commitment Bayesian persuasion case. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.18662 |
| By: | Sriram Tolety |
| Abstract: | We study whether large language models acting as autonomous bidders can tacitly collude by coordinating when to accept platform posted payouts in repeated Dutch auctions, without any communication. We present a minimal repeated auction model that yields a simple incentive compatibility condition and a closed form threshold for sustainable collusion for subgame-perfect Nash equilibria. In controlled simulations with multiple language models, we observe systematic supra-competitive prices in small auction settings and a return to competitive behavior as the number of bidders in the market increases, consistent with the theoretical model. We also find LLMs use various mechanisms to facilitate tacit coordination, such as focal point acceptance timing versus patient strategies that track the theoretical incentives. The results provide, to our knowledge, the first evidence of bidder side tacit collusion by LLMs and show that market structure levers can be more effective than capability limits for mitigation. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.21802 |
| By: | Vijay V. Vazirani |
| Abstract: | This paper unifies two foundational constructs from economics and algorithmic game theory, the Arctic Auction and the linear Fisher market, to address the efficient allocation of differentiated goods in complex markets. Our main contributions are showing that an equilibrium for the Arctic Auction is captured by a Rational Convex Program, and deriving the first combinatorial polynomial-time algorithm for computing Arctic Auction equilibria. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.21637 |
| By: | Jordana Blazek; Frederick C. Harris Jr |
| Abstract: | We consider a bipartite network of buyers and sellers, where the sellers run locally independent Progressive Second-Price (PSP) auctions, and buyers may participate in multiple auctions, forming a multi-auction market with perfect substitute. The paper develops a projection-based influence framework for decentralized PSP auctions. We formalize primary and expanded influence sets using projections on the active bid index set and show how partial orders on bid prices govern allocation, market shifts, and the emergence of saturated one-hop shells. Our results highlight the robustness of PSP auctions in decentralized environments by introducing saturated components and a structured framework for phase transitions in multi-auction dynamics. This structure ensures deterministic coverage of the strategy space, enabling stable and truthful embedding in the larger game. We further model intra-round dynamics using an index to capture coordinated asynchronous seller updates coupled through buyers' joint constraints. Together, these constructions explain how local interactions propagate across auctions and gives premise for coherent equilibria--without requiring global information or centralized control. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.19225 |
| By: | Jan Majewski; Francesca Giardini |
| Abstract: | Gossip has been shown to be a relatively efficient solution to problems of cooperation in reputation-based systems of exchange, but many studies don't conceptualize gossiping in a realistic way, often assuming near-perfect information or broadcast-like dynamics of its spread. To solve this problem, we developed an agent-based model that pairs realistic gossip processes with different variants of Trust Game. The results show that cooperators suffer when local interactions govern spread of gossip, because they cannot discriminate against defectors. Realistic gossiping increases the overall amount of resources, but is more likely to promote defection. Moreover, even partner selection through dynamic networks can lead to high payoff inequalities among agent types. Cooperators face a choice between outcompeting defectors and overall growth. By blending direct and indirect reciprocity with reputations we show that gossiping increases the efficiency of cooperation by an order of magnitude. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.20248 |
| By: | Dhiraj Jagadale; Kavita Vemuri |
| Abstract: | Mutual trust is a key determinant of decision-making in economic interactions, yet actual behavior often diverges from equilibrium predictions. This study investigates how emotional arousal, indexed by skin conductance responses, SCR, relates to trust behavior in a modified centipede game. To examine the impact of uncertainty, the game incorporated both fixed and random termination conditions. SCRs were recorded alongside self-reported measures of mutual and general trust and individual risk-taking propensity. Phasic SCRs were significantly higher under random termination, particularly following the opponent take actions, indicating increased emotional arousal under uncertainty. Mutual trust scores correlated positively with risk propensity but not with general trust. Behaviorally, higher mutual trust was associated with extended cooperative play, but only in the fixed-turn condition. These findings suggest that physiological arousal reflects emotional engagement in trust-related decisions and that uncertainty amplifies both arousal and strategic caution. Mutual trust appears context-dependent, shaped by emotional and physiological states that influence deviations from equilibrium behavior. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.18738 |
| By: | Malachy James Gavan; Alexander Frug |
| Abstract: | This paper shows that stability-based equilibrium refinements may not be well defined when taken to the infinite horizon. To do so, we use a stable-set-style notion of the dynamically consistent partition, allowing for incomplete information. We provide a concrete example where, only via taking the game to the infinite horizon, the dynamically consistent partition of equilibria does not exist. |
| Keywords: | dynamic learning and communication, revision-proof equilibria |
| JEL: | D83 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1536 |
| By: | Kai A. Konrad; Marcel Thum |
| Abstract: | The enforcement of international sanctions is frequently undermined by multiple third-party sanction-breaking countries. This paper examines how a sanctioning country can optimally negotiate with several such loophole countries to close the enforcement gaps. We compare several sequential and simultaneous bargaining strategies. Suitably chosen sequencing, but also simultaneous negotiations under the Single-Undertaking Principle can minimize the cost to the sanctioning country by creating competitive pressure among the loophole countries. We find that, if the desire to make the sanctioning regime effective is sufficiently high, the ultimate goal of closing the sanction loopholes is achieved for all sequencing rules of ultimatum bargaining we consider. However, the equilibrium size and distribution of compensation among loophole countries differ. We characterize the optimal sequential strategy and the optimal simultaneous-offer strategy. Furthermore, for well-chosen negotiation strategies, the sum of compensations paid to multiple loophole countries is lower than if there is only one loophole country. |
| Keywords: | sanctions, negotiations, geoeconomics, conflict, trade |
| JEL: | F13 F51 C78 H56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12308 |
| By: | Abigail Barr (University of Nottingham); Uzma Afzal (Royal Melbourne Institute of Technology (RMIT)); Daniele Nosenzo (Aarhus University) |
| Abstract: | We present three lab-in-the-field studies investigating systematic heterogeneity in cooperative decision-making across spouses in arranged and love-matched marriages in Pakistan, where the former is the tradition and the latter is associated with modernization. In Study 1, we engaged married couples in a one-shot, two-person, sequential public goods game, in which we applied the strategy method to the second mover. Using hierarchical clustering to analyze the strategy data, we categorized spouses into cooperative types and found that spouses in love-matched marriages are significantly more likely to be unconditionally cooperative. Spouses in love-matched marriages are also significantly more cooperative overall. In Study 2, we replicated our findings from Study 1 in a new sample of villages similarly close to a city but found that, as distance from the city increased, the love-matched effect declined. We interpreted this as suggestive evidence that there is less tolerance and support for love matches in more remote areas. In Study 2, by also engaging the spouses in games with neighbors, we established that the observed differences in cooperation between spouses in love-matched versus arranged marriages could not be explained by the selection of unconditionally cooperative people into love-matched marriages. Finally, in Study 3, we confirmed that there is indeed a social norm prescribing arranged marriage and that this norm is stronger in more remote villages. |
| Keywords: | Creativity; Associative Thinking; Methodology |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:not:notcdx:2025-02 |
| By: | Francesco De Sinopoli; Leo Ferraris; Claudia Meroni |
| Abstract: | In an insightful paper entitled Some Unpleasant Monetarist Arithmetic, Sargent and Wallace (1981) have argued that, when monetary and fiscal policy are not coordinated, inflation can get out of control if the monetary authority does not impose discipline on the fiscal authority. This paper shows that discipline can be reciprocal if the policy interaction is repeated and the rationality of the authorities is fully taken into account through the equilibrium concept. |
| Keywords: | Policy coordination, chicken game, forward induction |
| JEL: | C72 E31 E52 E63 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:562 |
| By: | Hang Wu; Qin Wu; Yue Liu; Mengmeng Shi |
| Abstract: | The rapid expansion of digital commerce platforms has amplified the strategic importance of coordinated pricing and inventory management decisions among competing retailers. Motivated by practices on leading e-commerce platforms, we analyze a sequential duopolistic newsvendor game where retailers first publicly set prices and subsequently make private inventory decisions under demand uncertainty. Our theory predicts that higher profit margins and demand uncertainty intensify price competition, while optimal inventory responses to demand uncertainty are shaped by profit margins. Laboratory evidence, however, reveals that participants are generally reluctant to compete on price, frequently coordinating on salient focal (reserve) prices, particularly in low-margin settings, and show little sensitivity to demand uncertainty in pricing. On the inventory side, participants' order quantities are largely insensitive to chosen prices and continue to exhibit well-documented Pull-to-Center biases. These findings reveal a disconnect between pricing and inventory decisions under competition and highlight the importance of accounting for persistent behavioral tendencies in retail operations. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.00994 |
| By: | James C. Cox; Cary Deck; Laura Razzolini; Vjollca Sadiraj |
| Abstract: | Deviations from choices predicted by self-regarding preferences have regularly been observed in standard dictator games. Such behavior is not inconsistent with conventional preference theory or revealed preference theory, which accommodate other-regarding preferences. By contrast, experiments in which giving nothing is not the least generous feasible act produce data that is inconsistent with conventional preference theory including social preference models and suggest the possible relevance of reference point models. Two such models are the reference-dependent theory of riskless choice with loss aversion and choice monotonicity in moral reference points. Our experiment includes novel treatments designed to challenge both theoretical models of reference dependence and conventional rational choice theory by poking holes in or adding to the dictator's feasible set along with changes to the initial endowment of the players. Our design creates tests that at most one of these models can pass. However, we do not find that any of these models fully capture behavior. In part this result is due to our observing behavior in some treatments that differs from previous experiments for reasons attributable to implementation differences across studies. |
| Keywords: | Rational Choice Theory, Reference Dependence, Behavioral Models, Laboratory Experiments |
| JEL: | C7 C9 D9 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:exc:wpaper:2025-02 |