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on Game Theory |
| By: | Aviad Heifetz (Open University of Israel); Enrico Minelli (University of Brescia); Herakles Polemarchakis (University of Warwick) |
| Abstract: | Purely affective interaction allows the welfare of an individual to depend on her own actions and on the profile of welfare levels of others. Under an assumption on the structure of mutual affection that we interpret as "non-explosive mutual affection, " we show that equilibria of simultaneous-move affective interaction are Pareto optimal independently of whether or not an induced standard game exists. Moreover, if purely affective interaction induces a standard game, then an equilibrium profile of actions is a Nash equilibrium of the game, and this Nash equilibrium and Pareto optimal profile of strategies is locally dominant. |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2360r1 |
| By: | Mete \c{S}eref Ahunbay; Paul W. Goldberg; Edwin Lock; Panayotis Mertikopoulos; Bary S. R. Pradelski; Bassel Tarbush |
| Abstract: | Finding, counting, or determining the existence of Nash equilibria, where players must play optimally given each others' actions, are known to be computational intractable problems. We ask whether weakening optimality to the requirement that each player merely avoid worst responses -- arguably the weakest meaningful rationality criterion -- yields tractable solution concepts. We show that it does not: any solution concept with this minimal guarantee is ``as intractable'' as pure Nash equilibrium. In general games, determining the existence of no-worst-response action profiles is NP-complete, finding one is NP-hard, and counting them is #P-complete. In potential games, where existence is guaranteed, the search problem is PLS-complete. Computational intractability therefore stems not only from the requirement of optimality, but also from the requirement of a minimal rationality guarantee for each player. Moreover, relaxing the latter requirement gives rise to a tractability trade-off between the strength of individual rationality guarantees and the fraction of players satisfying them. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.10966 |
| By: | Vasilios Kanellopoulos |
| Abstract: | The present paper examines the effect of R&D spillovers on regional innovation in Greece over the 2002-2010 period. The approach taken goes beyond a regional knowledge production function and draws possible explanations from a more extensive pool of R&D related and regional structural variables. Having employed game theory techniques in order to describe the licensing of the patents through royalties and derived the subgame perfect Nash equilibrium under a Stackelberg duopoly, the results obtained accord with findings of previous studies when it comes R&D expenditure related variables and further suggest that the role of highly-qualified employment is instrumental in promoting regional innovation. The results also suggest the benefits of synergies between R&D personnel in manufacturing and other measures of highly-qualified employment as well as R&D expenditure of the public sector and employment in manufacturing business R&D for regional innovation. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02274 |
| By: | Oechssler, Jörg |
| Abstract: | I study a formal mechanism that can sustain Pareto optimality in a new and very broad class of dilemma games. In the absence of a central authority that could enforce multilateral agreements, the mechanism is based on binding unilateral commitments, which condition a player's (possibly multidimensional) contribution on other players' contributions. I show that unexploitable better response dynamics converge to Pareto optimal contributions when the game is played recurrently. |
| Keywords: | public goods; climate treaties; conditional contributions |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:awi:wpaper:0770 |
| By: | Joy Das Bairagya; Jonathan Newton; Sagar Chakraborty |
| Abstract: | We present a collaboration ring model -- a network of players playing the prisoner's dilemma game and collaborating among the nearest neighbours by forming coalitions. The microscopic stochastic updating of the players' strategies are driven by their innate nature of seeking selfish gains and shared intentionality. Cooperation emerges in such a structured population through non-equilibrium phase transitions driven by propensity of the players to collaborate and by the benefit that a cooperator generates. The robust results are qualitatively independent of number of neighbours and collaborators. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.11601 |
| By: | Charles Nolan |
| Abstract: | The "financial trilemma" asserts that deep financial integration, purely national financial policies and financial stability cannot simultaneously be achieved. Existing formalizations employing ex post burden-sharing games imply the trilemma result hinges on equilibrium selection. We develop a minimal ex ante prudential-effort model where financial integration amplifies cross-border crisis risk and national regulators internalise only part of global losses. The unique symmetric Nash equilibrium underprovides prudential effort and cannot deliver first-best stability when both integration and national policy autonomy are high. That provides a unique-equilibrium foundation for the financial trilemma and clarifies when supranational prudential arrangements are needed. |
| Keywords: | Financial trilemma; Financial stability; Prudential coordination |
| JEL: | F33 G28 H41 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:gla:glaewp:2026_03 |
| By: | Navin Kartik (Yale University, Department of Economics); Francesco Squintani (University of Warwick, Department of Economics); Katrin Tinn (McGill University, Desautels Faculty of Management) |
| Abstract: | We study two-player constant-sum Bayesian games with type-independent payoffs. Under a "completeness" statistical condition, any "identifiable" equilibrium is an ex-post equilibrium. We apply this result to a Downsian election in which office-motivated candidates possess private information about policy consequences. The ex-post property implies a sharp bound on information aggregation: equilibrium voter welfare is at best equal to the efficient use of a single candidate's information. In canonical specifications, politicians may "anti-pander" (overreact to their information), whereas some degree of pandering would be socially beneficial. We discuss other applications of the ex-post result. |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2484 |
| By: | Ayato Kitadai; Shunta Yoshimura; Takuya Nakashima; Noora Torpo; Rei Miratsu; Naoki Mizutani; Nariaki Nishino |
| Abstract: | This study develops a novel class of queueing game to explain a common practice in cargo shipping "Sail Fast, Then Wait" (SFTW), and demonstrates that resolving information asymmetry among ships can deconcentrate port arrival times. We formulate a competitive navigating environment as an incomplete information game where players strategically decide their arrival time within heterogeneous feasible sets under First-Come, First-Served port policy. Our results show that in incomplete information settings, SFTW emerges as the unique symmetric equilibrium. Conversely, under complete information, the set of equilibria expands, allowing for slower and more environmentally friendly actions without compromising service order. We further quantitatively evaluate the effect of information enrichment based on empirical data. Our findings suggest that the prevalence of technologies enabling ships to infer others' private information can effectively reduce SFTW and enable more energy-efficient and environmentally sustainable operations. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.01958 |
| By: | Joshua J Bon; James Bailie; Judith Rousseau; Christian P Robert |
| Abstract: | We propose a novel framework for measuring privacy from a Bayesian game-theoretic perspective. This framework enables the creation of new, purpose-driven privacy definitions that are rigorously justified, while also allowing for the assessment of existing privacy guarantees through game theory. We show that pure and probabilistic differential privacy are special cases of our framework, and provide new interpretations of the post-processing inequality in this setting. Further, we demonstrate that privacy guarantees can be established for deterministic algorithms, which are overlooked by current privacy standards. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.22945 |
| By: | Bernard Cornet (Department of Economics, University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | This paper investigates several existence theorems that are central to mathematical economics and game theory, with a special emphasis on infinite-dimensional settings. By synthesizing different related formulations, including the existence of equilibria, fixed-point/coincidence theorems, surjectivity theorems, variational inequalities and Gale-Nikaido-Debreu generalizations, we aim to provide a unifying perspective across varied mathematical landscapes. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:kan:wpaper:202607 |
| By: | Elias Asproudis (Swansea University, School of Social Sciences, Department of Economics, UK); Eleftherios Filippiadis (Department of Economics, University of Macedonia, Greece) |
| Abstract: | This paper examines how environmental taxes, abatement effort, and green trade unions interact within a differentiated duopoly under decentralised and centralised wage setting structures. We show that trade union environmental awareness acts as a substitute for environmental taxation: as unions internalize local damages in wage negotiations, the regulator optimally chooses a lower emissions tax. Centralised wage bargaining leads to higher wages and lower emissions, while decentralised bargaining yields higher output, profits, and social welfare. From a policy perspective, we argue that incorporating green trade unions’ environmental preferences into environmental governance can improve efficiency of the environmental policy taxation. |
| Keywords: | environmental tax, abatement effort, green trade unions, environmental damages, labour market structure |
| JEL: | Q5 L13 D43 J5 H2 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2026_03 |
| By: | Emilio Calvano; Clemens Possnig; Juha Tolvanen |
| Abstract: | We analyze strategic communication when advice is generated by a reinforcement-learning algorithm rather than by a fully rational sender. Building on the cheap-talk framework of Crawford and Sobel (1982), an advisor adapts its messages based on payoff feedback, while a decision maker best-responds. We provide a theoretical analysis of the long-run communication outcomes induced by such reward-driven adaptation. With aligned preferences, we establish that learning robustly leads to informative communication even from uninformative initial policies. With misaligned preferences, no stable outcome exists; instead, learning generates cycles that sustain highly informative communication and payoffs exceeding those of any static equilibrium. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.12035 |
| By: | Navin Kartik (Department of Economics, Yale University); Elliot Lipnowski (Department of Economics, Yale University); Harry Pei (Department of Economics, Northwestern University) |
| Abstract: | Does electoral replacement ensure that officeholders eventually act in voters' interests? We study a reputational model of accountability. Voters observe incumbents' performance and decide whether to replace them. Politicians may be "good" types who always exert effort or opportunists who may shirk. We find that good long-run outcomes are always attainable, though the mechanism and its robustness depend on economic conditions. In environments conducive to incentive provision, some equilibria feature sustained effort, yet others exhibit some long-run shirking. In the complementary case, opportunists are never fully disciplined, but selection dominates: every equilibrium eventually settles on a good politician, yielding permanent effort. |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2483 |
| By: | Michael Balzer; Adhen Benlahlou |
| Abstract: | This paper develops a theory of scientific and technological peer effects to study how individuals' productivity responds to the behavior and network positions of their collaborators across both scientific and inventive activities. Building on a simultaneous equation network framework, the model predicts that productivity in each activity increases in a variation of the Katz-Bonacich centrality that captures within-activity and cross-activity strategic complementarities. To test these predictions, we assemble the universe of cancer-related publications and patents and construct coauthorship and coinventorship networks that jointly map the collaboration structure of researchers active in both spheres. Using an instrumental-variables approach based on predicted link formation from exogenous dyadic characteristics, and incorporating community fixed effects to address endogenous network formation, we show that both authors' and inventors' outputs rise with their network centrality, consistent with the theory. Moreover, scientific productivity significantly enhances technological productivity, while technological output does not exert a detectable reciprocal effect on scientific production, highlighting an asymmetric linkage aligned with a science-driven model of innovation. These findings provide the first empirical evidence on the joint dynamics of scientific and inventive peer effects, underscore the micro-foundations of the co-evolution of science and technology, and reveal how collaboration structures can be leveraged to design policies that enhance collective knowledge creation and downstream innovation. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.02403 |