|
on Game Theory |
| By: | Riccardo Formenti |
| Abstract: | We study the steady states of games played recurrently within large anonymous populations of players who receive partial ex-post feedback about the play of their opponents. Departing from the classical Bayesian account, players do not trust their conjectures as a correct description of the strategic environment but consider them as approximations of a reality that is only partially modeled and partially observed. We introduce games with feedback and uncertainty attitudes, in which the normal-form structure is enriched with a profile of feedback functions and, for each player, a preference functional that encodes aversion to misspecification and to ambiguity. The induced misspecification sensitive criterion contains the variational, maxmin, and smooth-ambiguity evaluations as special cases and collapses to expected utility when beliefs are unambiguous and the player is neutral to misspecification. The appropriate steady-state notion for such games is the Self-Confirming Equilibrium under Model Misspecification (SCEM), which requires each player to best respond to a set of structured conjectures that the feedback generated by equilibrium play cannot falsify. In contrast with the classical theory and with its ambiguity-averse extensions, mixed-strategy Nash Equilibria need not be self-confirming. We therefore develop a companion notion of Robust Nash Equilibrium (R-NE), in which every supported action remains optimal under a variational evaluation. Robust Nash equilibria refine SCEM, exist whenever the statistical distances are continuous, thereby delivering existence of SCEM, and coincide with the latter under fully informative feedback. Under observationally consistent divergences and observable payoffs, R-NE and SCEM reduce, respectively, to Nash equilibrium and Self-Confirming Equilibrium under Ambiguity (SCEA), which generalizes smooth self-confirming equilibrium. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.35692 |
| By: | Ohnishi, Kazuhiro |
| Abstract: | This paper analyzes a three-stage Bertrand duopoly with partial cooperation and managerial delegation. In the first stage, each owner decides whether to hire a manager. In the second stage, owners who hire managers select their managers’ incentive parameters. In the third stage, managers—or owners if no delegation occurs—simultaneously and independently set the firms’ prices. The equilibrium is derived using backward induction under a subgame perfect equilibrium. As a result, the paper shows that managerial delegation does not increase payoffs for either firm. This finding contrasts sharply with the Cournot case, where delegation is profitable, and highlights that the strategic value of delegation depends critically on the mode of competition. |
| Keywords: | Bertrand model; Managerial delegation; Partially cooperating firm; Subgame perfection |
| JEL: | C72 D21 D43 L13 |
| Date: | 2026–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129402 |
| By: | Emanuel Namaiwa Barke (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France) |
| Abstract: | This paper studies the R&D investment-decision game in a Cournot duopoly with ex ante asymmetric production costs. Firms first decide whether to participate in process R&D and, conditional on participation, subsequently choose their costreducing R&D efforts. Despite cost heterogeneity, investing is a strictly dominant strategy for both firms, so bilateral R&D is the unique participation equilibrium. Cost asymmetry nevertheless changes the nature of this outcome. When firms are sufficiently similar, bilateral R&D may constitute a prisoner’s dilemma; as the initial cost gap widens, the dilemma breaks down asymmetrically, with the initially efficient firm preferring bilateral investment while the inefficient firm continues to prefer mutual non-investment. Cost asymmetry also reallocates R&D effort toward the initially efficient firm. The welfare analysis reveals a further wedge between private and social incentives: although bilateral R&D maximizes aggregate R&D and consumer surplus, social surplus may be higher when innovation is concentrated in the initially efficient firm. Extending the model to technological spillovers leaves bilateral participation as the unique equilibrium but changes the private desirability of joint R&D. |
| Keywords: | Process R&D; R&D investment-decision game; Cost asymmetry; Cournot duopoly; Prisoner’s dilemma; Technological spillovers. |
| JEL: | C72 L13 O31 O32 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2026-14 |
| By: | Andrew Sweeting; Xuezhen Tao; Qian Wang |
| Abstract: | We model a finite-horizon game of repeated oligopoly competition in which sellers choose quantities of a homogeneous product with linear demand and have private information about their own marginal costs, which are serially correlated over time. Focusing on fully separating equilibria, we provide conditions for existence and uniqueness. Relative to static complete- and incomplete-information benchmarks, sellers' incentives to signal low costs can substantially affect output, productive efficiency, and welfare, even when there are ten or more sellers. We apply the model to the global oil market, and compare predictions to a model where sellers can make quantity commitments. |
| JEL: | C73 D82 L13 L71 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35883 |
| By: | Wei He; Yeneng Sun; Hanping Xu |
| Abstract: | We study sharp bounds on equilibrium behavior in Bayesian games when players may make mistakes. Under strategic complementarities, the set of behavioral perfect equilibria has a largest and a smallest element, both in pure strategies. We ask when these bounds are monotone and how they depend on the way mistakes are made. For monotone supermodular games, we consider limits of equilibria under increasing perturbations, in the sense that conditional tremble distributions have full support and increase stochastically with type. We show that the largest and smallest perfect equilibria exist, which are pure and monotone. Under the general perfection notion, the extremal perfect equilibria continue to be monotone in the setting with finite actions. With infinite actions, the extremal perfect equilibria can be nonmonotone, and the set of perfect monotone equilibria can even lack extrema. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.35511 |
| By: | John Bone; Michalis Drouvelis; Konstantinos Georgalos; Indrajit Ray |
| Abstract: | We set up an experiment to test whether players use a payoff-irrelevant public message (BLUE or RED) as a possible sunspot to coordinate in a Battle of the Sexes game in which the pure strategies are labelled as X and Y. We find that most players do not play a “sunspot equilibrium†; instead, they learn to coordinate on a particular focal point (pure strategy X) in the game, largely ignoring the presence of the public signal (colour), and stick to this focal point, even after the public signal is withdrawn. Colour-contingent play emerges in only two of the six matching groups, which adopt opposite mappings. |
| Keywords: | Battle of the Sexes, Coordination, Sunspots, , Public Signal, Focal Point |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:lan:wpaper:444838694 |
| By: | Fernando E. Alvarez; David Argente |
| Abstract: | We study the relation between strategic complementarities and aggregate persistence in linear-quadratic mean field games with interactions in states and actions. The framework provides local approximations to common macroeconomic problems, including capital accumulation and multiproduct pricing. We show that the equilibrium aggregate dynamics coincide with those of a single-agent linear-quadratic control problem in which state and action curvatures are adjusted for strategic interactions. This result gives conditions for equilibrium existence, establishes uniqueness, and links strategic interactions to aggregate adjustment. We establish conditions under which stronger state complementarities increase persistence, while stronger action complementarities reduce it, even in multidimensional problems whose underlying matrices are not simultaneously diagonalizable. Under these conditions, internalizing state complementarities makes the utilitarian planner’s allocation more persistent, while internalizing action complementarities makes it less persistent. Aggregate-only payoff terms can reinforce or offset these effects. With common shocks, we give conditions under which individual and aggregate dynamics can be combined to identify strategic interactions and model parameters. Finally, we extend the analysis to interactions through higher moments of the state distribution. |
| JEL: | C61 C73 E31 E32 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35892 |
| By: | Emanuel Namaiwa Barke (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France) |
| Abstract: | This paper studies mutual outsourcing between competing firms in a differentiated network duopoly and examines how positive network externalities interact with the timing of quantity competition. Firms first choose the outsourcing prices charged to their rivals and then compete either simultaneously à la Cournot or sequentially à la Stackelberg. We show that stronger network effects increase equilibrium output and profits under both competitive regimes, but have non-monotonic effects on outsourcing prices. Under Cournot competition, the equilibrium outsourcing price increases with network intensity when network effects are weak and decreases once they become sufficiently strong. Under Stackelberg competition, outsourcing incentives become asymmetric: the leader’s outsourcing price is non-increasing in network intensity, while the follower’s price may exhibit a threshold effect. The comparison across market structures further reveals that network effects can reverse both outsourcing-price and profit rankings. In particular, the Stackelberg leader always earns more than under Cournot competition, whereas sufficiently strong network effects allow the follower first to outperform the Cournot benchmark and eventually to earn more than the leader. The analysis highlights a strategic trade-off specific to network industries: firms balance the incentive to raise a rival’s input cost against the need to preserve the common installed base that supports market demand. |
| Keywords: | Mutual outsourcing; positive network externalities; Cournot competition; Stackelberg competition; outsourcing prices; strategic input pricing |
| JEL: | D43 L13 L14 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2026-10 |
| By: | Gondauri, Davit; Müller, Karsten |
| Abstract: | This paper develops a quantitative, mathematically rigorous, and computationally auditable framework for certifying the local persistence of symmetric Nash equilibria in common-kernel bimatrix games. It translates classical essentiality, fixed-point index, and parametric stability theory into explicit, verifiable robustness certificates for declared equilibria under payoff uncertainty, parameter perturbations, and finite computational error. The revised framework integrates strengthened continuation theorems, sharper perturbation bounds, exact support-based regularity tests, and constructive certificates for auxiliary zero-sum saddle nonuniqueness. The analysis employs the affine common-kernel representation R_T = (J + 2T − Tᵀ)/3, C_T = R_Tᵀ, with directional matrix D_T = 2T − Tᵀ = 3R_T − J. Building on the previously established affine inverse T = 2R + Rᵀ − J and parallelotope characterization of the admissible kernel cube K = [0, 1]^(m×m), the paper derives sharp coordinate-norm bounds, exact boundary-distance formulas, and explicit conversions between kernel and symmetric-payoff perturbations. It proves that common-kernel-relative symmetric essentiality and ambient symmetric-strategy essentiality coincide for equilibrium points and specified isolated components throughout the closed cube, including boundary kernels. This equivalence holds without requiring equilibrium regularity. For a support-regular symmetric Nash equilibrium, the support equations reduce to an explicit matrix A_S(T) = BᵀR_TB. Nonsingularity of this reduced matrix, together with strict inactive payoff inequalities, establishes isolation in the entire strategy simplex. The local symmetric Nash index is computed algebraically as ind_N(T, x*) = sgn(det[−A_S(T)]). The resulting nonzero-index certificate guarantees qualitative local essentiality. A sufficient positive-index condition is also obtained from negative definiteness of the symmetric part of the reduced directional matrix. These results concern the symmetric-strategy index and distinguish it from the full product-space equilibrium index. The quantitative continuation theorem is extended to arbitrary ambient reference kernels, rather than being restricted to K. Explicit sufficient perturbation radii guarantee preservation of support, strict inactive payoff gaps, local isolation, and bounded strategy displacement. The bounds depend on the smallest active probability, the minimum inactive payoff gap, the reduced-matrix inverse norm, and the reference payoff scale. Direct payoff-space estimates eliminate the unnecessary factor-three loss associated with inverse-coordinate conversion, yielding stronger certified uncertainty tolerances. Strict pure equilibria are handled separately through a direct payoff-gap certificate, without invoking an inverse of a zero-dimensional reduced matrix. The auxiliary zero-sum connection is characterized precisely through support geometry. For a saddle pair (p, q) of D_T, the inclusion supp(q) ⊆ supp(p) guarantees that q is an exact symmetric Nash equilibrium; diagonal equality p = q is unnecessary. Crucially, strict support inclusion necessarily produces an unused best response and a zero inactive Nash gap. Consequently, the strict-gap support-regularity certificate cannot apply in this case, even if the reduced matrix on q's smaller support is nonsingular. An explicit counterexample demonstrates that persistence may fail. The revised certification workflow therefore distinguishes exact equilibrium verification from regularity and persistence certification, rather than incorrectly treating strict inclusion as sufficient for all three. Under equal support, the tangent identity Q = B_SᵀD_SS B_S = 3A_S(T) establishes the equivalence between active bordered-system regularity and reduced Nash invertibility. The two-block saddle determinant satisfies det(K_tan) = (det Q)², so it detects nonsingularity but does not retain the orientation information required for the signed symmetric Nash index. The complete auxiliary saddle correspondence is treated as a nonempty, compact-valued, upper-hemicontinuous set-valued mapping, without assuming a globally continuous selector. For active-regular equal-support saddle pairs with strict inactive inequalities for both players, improved probability-vector residual estimates yield explicit perturbation radii, support-preserving smooth continuation, and quantitative displacement bounds. These estimates remove the explicit multiplier involving the absolute saddle value, although the full bordered inverse norms may still depend on that value. A local-isolation argument, followed by convexity of the complete zero-sum saddle set, proves global uniqueness of the continued saddle pair throughout the certified neighborhood. Its column strategy is an exact support-regular symmetric Nash equilibrium and coincides with the independently certified Nash branch wherever both continuation certificates apply. A further contribution of the revised analysis is a constructive nonuniqueness theorem. After successful equal-support Nash regularity tests, a zero inactive column gap is shown to imply saddle nonuniqueness under the stated nonsingularity and strict inactive row-gap hypotheses. The new result explicitly constructs a nonconstant segment of saddle column strategies, with a positive admissible step bound and an exact rational witness for rational inputs. Thus the certification procedure can establish saddle nonuniqueness while retaining a valid Nash persistence certificate. Nash exactness, Nash regularity and persistence, and saddle uniqueness are reported as logically separate outcomes. The computational framework comprises two explicit certification algorithms supported by exact rational arithmetic and outward-rounded interval verification. Its checks include determinant signs, validated matrix inverses and residuals, active probability positivity, inactive payoff margins, solver-output reconstruction, and finite-error perturbation budgets. Worked examples cover gap-limited proper supports, equal-support saddles with p ≠ q, strict-inclusion failure of persistence, Nash regularity despite saddle nonuniqueness, exact boundary-mesh certification, and complete interval reconstruction from approximate numerical output. Additional computational audits and independently replayable solver records strengthen the reproducibility of the certification procedures without being substituted for the mathematical proofs. For isolated equilibrium components, the framework provides quantitative persistence guarantees conditional on a supplied isolating neighborhood, an independently certified nonzero component index, and a validated boundary covering. The finite-cover displacement estimate does not independently establish these prerequisites. General persistence for arbitrary degenerate or positive-dimensional components is not claimed. The contribution is a coordinate-explicit synthesis and quantitative refinement of established equilibrium-index, sensitivity, and perturbation principles, rather than a claim of foundational priority over classical stability theory. It provides finite, independently checkable certificates for regular isolated symmetric Nash equilibria and precisely delineates when auxiliary zero-sum solutions yield exact equilibria, persistent Nash branches, globally unique saddle branches, or constructive nonuniqueness witnesses. The framework supports ex-post robustness assessment in game-theoretic models after estimation, recalibration, numerical optimization, scenario modification, and finite-precision computation. All reported perturbation radii are sufficient guarantees; failure to meet a certified bound does not by itself establish instability or nonexistence of nearby equilibria. |
| Keywords: | symmetric Nash equilibrium, common-kernel games, relative essentiality, fixed-point index, support regularity, quantitative continuation, perturbation certification, saddle-point sensitivity |
| JEL: | C72 C62 C63 C02 C61 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:344195 |
| By: | Watson, Joel |
| Abstract: | This article identifies sufficient conditions under which a partial construction of sequential equilibrium—characterizing beliefs and behavior for only a subset of the information sets—is sufficient for the existence of a sequential equilibrium that coincides with the partial construction in a suitable way. Illustrative applications are also presented. |
| Keywords: | 38 Economics (for-2020), 3801 Applied Economics (for-2020), 3803 Economic Theory (for-2020), Sequential equilibrium applications, Full consistency for belief updating, Partial equilibrium, Appraisals, Contractual chains, Decentralized contracting, Multistage games with observed actions and, independent types, Sequential equilibrium applications, full consistency, belief updating, 1401 Economic Theory (for), 1499 Other Economics (for), Economic Theory (science-metrix), 3801 Applied economics (for-2020), 3803 Economic theory (for-2020) |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucsdec:qt5nh3x3kf |
| By: | Marie-Laure Cabon-Dhersin (University of Rouen Normandie); Joanna Poyago-Theotoky (University of Salento, Department of Economics and The Australian National University, Research School of Economics); Natacha Raffin (ENS Paris-Saclay, CEPS) |
| Abstract: | We explore the interplay of competition and environmental policies to address the question of whether green antitrust has beneficial effects in terms of both environmental and consumer welfare performance. We focus on two environmental policy tools, an emission tax and an emission standard, and explore three particular configurations: competitive ‘green R&D, collaborative ‘green’ R&D in the form of a joint lab, and the benchmark case of no ‘green’ R&D. Firms compete in the product market by selling a homogeneous product, either by setting prices (Bertrand competition) or quantities (Cournot competition) while facing convex costs. We show that ‘green antitrust’ can unambiguously improve the effectiveness of environmental policy without undermining the interests of either consumers or producers, establishing a ‘win-win-win’ outcome. |
| Keywords: | ‘Green’ R&D, emission tax, environmental standard, ‘green’ antitrust, R&D cooperation, joint lab, convex costs |
| JEL: | L13 L4 Q55 Q58 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.22 |
| By: | Ernest Liu; Stephen J. Redding; Bennett Smith-Worthington; David Y. Yang |
| Abstract: | We develop a tractable framework for analyzing geopolitics as a network of coordination and strategic influence. Countries choose geopolitical actions that trade off domestic interests against incentives to align with connected countries. They can exert costly bilateral influence to affect one another’s actions. We characterize equilibrium actions and bilateral influence in closed form. Cross-country differences in domestic interests decompose into latent geopolitical cleavages, each of which the network transmits into geopolitical actions independently of the others. The cross-country covariance matrices of domestic interests and of geopolitical actions identify the cleavages and their importance, from which we recover the network. We implement the framework using data on United Nations voting and democratic orientation. The inferred network is well approximated by a few dimensions, aligns with external measures of geopolitical ties, and recovers well-known historical cleavages. We undertake counterfactuals for domestic interests and network connections and quantify three notions of geopolitical power |
| JEL: | C72 D85 F15 F52 F68 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35951 |
| By: | Mark Whitmeyer; Kun Zhang |
| Abstract: | We introduce a mediator to a communication setting with verifiable (hard) evidence and characterize precisely when mediation can induce every obedient outcome--every type-contingent distribution of actions that the receiver is willing to follow--including the outcome that delivers the sender's commitment (Bayesian persuasion) payoff. For both type-independent and general preferences, it is necessary for each type to have a message he alone can send. This is also sufficient for type-independent preferences, whereas the general case also requires a particular alignment of the types' utilities. We also rank evidence structures by the distributions of actions conditional on the sender's type that they can induce at (mediated) equilibrium, through garbling conditions analogous to Blackwell's comparison of experiments. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.36490 |
| By: | Moira Gidseg (College of the Holy Cross) |
| Abstract: | In this study, I propose a new model of distributional preferences, the “Bliss Point†model. According to this model, each person has a preferred payoff for others which is a linear function of his own payoff, and he suffers a utility penalty proportional to the distance between this bliss point for his co-players and the actual payoffs. To evaluate the empirical relevance of this model, I create an experiment in which subjects play several games which affect both their own payoff and that of an anonymous partner. I used their behavior to estimate individual-level parameters of my model as well as three others: inequality aversion (Fehr & Schmidt, 1999), quasi-maximin (Charness & Rabin, 2002), and constant elasticity of substitution (Andreoni & Miller, 2002). I then compare the models’ ability to predict behavior out-ofsample. I find that the Bliss Point model generally predicts about as well as the other models. Further, it is a better predictor than the other models for up to 7% of subjects, depending on the task. This suggests that the Bliss Point model is a useful alternative to existing models. |
| JEL: | C72 D64 C91 H41 D91 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:hcx:wpaper:2601 |
| By: | Christopher Clayton; Matteo Maggiori; Jesse Schreger |
| Abstract: | We build a model of two hegemons that have valuable trading relationships with each other and at the same time compete in exerting geoeconomic power over countries in the rest of the world. When the hegemons trade with each other, their optimal policy is shaped both by classic economic considerations - the profitability of that specific trade - and by geoeconomic competition - how the trade affects the power of each hegemon vis-a-vis the rest of the world. We show that containment, a policy mix in which a hegemon limits sales of its inputs to the rival hegemon and uses its power to demand that the rest of the world shift away from sourcing from the rival, arises when the two hegemons offer relatively substitutable exports, are less interdependent with each other, and have more direct geopolitical rivalry. Countries in the rest of the world benefit, all else equal, from hegemons containing each other since they partially squander their power with offsetting demands. However, containment policy can also worsen the efficiency of global production, leaving the rest of the world worse off. |
| JEL: | E0 F0 L0 N0 P0 F10 F30 F40 F50 N40 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35952 |
| By: | Louphou Coulibaly; Charles Engel |
| Abstract: | We examine optimal non-cooperative monetary policy in a two-country New Keynesian setting with complete financial markets and pricing to market for goods. In contrast to the case in which the law of one price holds for goods, currency misalignments are an important consideration even for self-oriented policymakers. Financial markets are critical in the analysis. Under “full” commitment, the optimal policy considers the effects on asset values and hence wealth distribution across countries. Optimal policy under full commitment differs from the “partial” commitment case in which the policy commitment is not made until after asset markets clear. Surprisingly, the optimal targeting rule under strategic policy with full commitment is the same as under cooperative policy. In this setting, changes in state-contingent claim prices offset the wealth a self-oriented policymaker might seek through terms-of-trade manipulation, and we show that there are no gains from cooperation. Although a policy chosen under partial commitment may be desirable from a country’s perspective, the resulting Nash equilibrium yields lower welfare. |
| JEL: | E44 E52 F31 F41 F42 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35928 |
| By: | Shahriar, Muhammad Shajid; Rakas, Jasenka |
| Abstract: | When parked at airport gates, commercial aircraft need electricity and conditioned air to power avionics, lighting, cabin services, and passenger comfort. Aircraft typically use an auxiliary power unit (APU), a small gas-turbine engine located at the rear of the aircraft that burns jet fuel as a power source. Ground power (GP) and preconditioned air (PCA) can reduce auxiliary power unit (APU) use during aircraft turnaround, but their availability alone does not ensure adoption. Reliability, coordination, timing and perceived delay risk can make continued APU reliance a rational airline response. This study develops a game-theoretic framework that links diagnosis of persistent APU reliance to the evidence needed for airport intervention. Each airline–gate pair is represented as a two-player airport–airline game. Four information packages are ordered by expected acquisition burden, with decision sufficiency defined as preserving both the equilibrium classification and selected intervention obtained under a full-information benchmark. Two synthetic demonstrations illustrate the framework. The first evaluates baseline equilibria and one-at-a-time intervention thresholds across 16 airline–gate pairs. Fourteen pairs initially remained in a weak-support/APU equilibrium. Coordination improvement shifted six pairs toward strong support and GP/PCA use, the broadest response among the five tested interventions. Equipment reliability had the smallest mean positive threshold among successfully shifted pairs. Intervention responses varied across pairs, with the broadest lever shifting 37.5% of all pairs within the tested range, supporting a pair-specific approach to intervention selection. The second demonstration uses 60 synthetic operation-style records across the same 16 pairs to illustrate bottleneck diagnosis and candidate-response mapping. Weak economic incentives relative to operational risk were the dominant modeled constraint for 10 pairs. Together, the demonstrations motivate a staged pathway that begins with existing operational records and adds technical or strategic evidence when needed to clarify intervention choice. The framework establishes a structured basis for targeted information acquisition and provides a pathway for empirical evaluation of decision-sufficient stopping packages, acquisition costs, and operational effectiveness. |
| Keywords: | Engineering, Airport gate electrification, Auxiliary power units, Ground power, Game theory, Decision-sufficient information, Targeted information acquisition |
| Date: | 2026–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt70271188 |
| By: | Mickael Beaud (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Yujiang Sun (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | While various models of inequality aversion predict different effects of background risk on giving, empirical evidence remains mixed. This study presents a laboratory experiment using a modified dictator game to examine whether exposure to an additive, zero-mean background risk affecting endowments influences giving behavior. Our results show that such exposure does not significantly affect average donation amounts, the likelihood of giving nothing, or the tendency to split resources equally. These findings are consistent with ex ante inequality concerns under risk neutrality; however, overall, our experimental data do not support the behavioral predictions implied by purely ex post inequality aversion. |
| Keywords: | Inequality aversion, Background risk, Dictator game |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05777756 |
| By: | Kevin Dano; Bryan S. Graham; Yassine Sbai Sassi |
| Abstract: | In social and economic networks linked agents often share connections in common. There are two competing explanations for this phenomenon. First, agents may have a structural taste for transitive links – the returns to linking may be higher if two agents share a common connection. Second, agents may assortatively match on unobserved attributes, a process called homophily. We study parameter identifiability in a simple model of dynamic network formation with both effects. Agents form, maintain, and dissolve links over time to maximize utility. The return to linking may be higher if agents share connections in common. A pair-specific utility component allows for arbitrary homophily on time-invariant agent attributes. We derive conditions under which it is possible to detect the presence of a taste for transitivity in the presence of assortative matching on unobservables. We leave the joint distribution of the initial network and the pair-specific utility component, both high dimensional nuisance parameters, unrestricted. Our identification result is constructive, suggesting an analog estimator, whose finite and (single) large network properties we characterize. We show, via examples, the delicacy of information accumulation in the single (large) network setting. |
| Date: | 2026–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:azt:cemmap:18/26 |
| By: | Gondauri, Davit |
| Abstract: | The emergence of the agentic economy-an economic environment in which autonomous artificial intelligence agents increasingly undertake transactions, negotiate contractual terms, allocate resources, and execute decisions on behalf of human and institutional principals-introduces a fundamental challenge to economic theory: individual algorithmic rationality does not necessarily imply collective efficiency, equilibrium stability, or the protection of human welfare. As autonomous decision-making becomes increasingly embedded in economic institutions, the central question extends beyond whether AI agents can optimize delegated objectives. It concerns whether their strategic interactions generate economically desirable outcomes, under what conditions delegated decisions diverge from human interests, and whether governance mechanisms can provide mathematically verifiable guarantees against welfare deterioration. This study develops a comprehensive theoretical-computational framework for equilibrium selection, welfare alignment, and robust governance in the agentic economy. Integrating noncooperative game theory, strategic complementarities, Bayesian and regularized market responses, convex optimization, quasilinear exchange, and incomplete financial markets, the research establishes a structured collection of analytical results, counterexamples, computational algorithms, and verifiable certificates, designated AE1-AE30. Principal Scientific Contributions 1. Equilibrium rationality does not guarantee human-welfare protection. The analysis establishes that individually rational strategies of autonomous AI delegates may generate multiple Nash equilibria with materially different consequences for human principals. Consequently, governance policies evaluated exclusively against a favorable equilibrium may fail to protect human interests under alternative strategically consistent outcomes. For a specified class of finite games with nonnegative additive strategic complementarities and nondecreasing human loss, the research derives conditions under which the greatest pure-strategy equilibrium provides a valid upper bound on human loss across all mixed Nash equilibria (AE9). This result converts a potentially complex equilibrium-safety assessment into a mathematically tractable certificate within the declared game class. 2. Cost-minimizing safe governance may fail to attain an optimum. The study identifies an explicit two-instrument governance mechanism in which autonomy incentives and assurance interventions jointly influence strategic behavior and human exposure. Within this model, the requirement to protect human welfare against every Nash equilibrium generates a nonclosed safety region. An exact analytical construction (AE7-AE8) demonstrates that the governance-cost infimum can remain unattained, even though feasible policies can approach it arbitrarily closely. The result reveals a fundamental distinction between approaching the lowest possible governance cost and possessing an implementable, cost-minimizing safe policy. 3. A common AI valuation bias can be economically neutral, while heterogeneous biases generate welfare losses. The research distinguishes common additive distortions in delegated valuations from cross-agent differences in those distortions. Under explicitly specified quasilinear exchange conditions, a common additive score shift can be absorbed into supporting market prices without changing equilibrium resource allocations or aggregate human welfare. By contrast, heterogeneous distortions alter relative allocation incentives and can generate measurable human-welfare losses. The resulting decomposition (AE24) provides an economic explanation of why the dispersion of delegated objectives-not merely the magnitude of a common algorithmic bias-can be decisive for welfare alignment. 4. Mathematically certified bounds on AI-induced welfare deterioration and safe governance. A central contribution is the derivation of a sharp welfare-loss bound for delegated exchange under uniform curvature assumptions and fixed convex feasibility constraints (AE27). The analysis connects the dispersion of AI-delegate valuation distortions to an explicit upper bound on human-welfare regret, including settings with active portfolio restrictions and incomplete security spanning. Building on this result, AE27-AE29 establish a computable, sufficient safety certificate for governance policies. When delegated score distortions depend affinely on policy instruments, the certificate generates a convex inner approximation of the safe-policy region. This provides a rigorous foundation for identifying governance interventions whose compliance with a prescribed welfare-loss threshold can be mathematically verified under the model's assumptions. 5. Reproducible computational verification and independent numerical benchmarking. The theoretical results are supported by a structured computational research program incorporating exact rational calculations, interval-certified numerical bounds, projected optimization methods, and independent solver comparisons. The computational analysis includes: 100 synthetic nonlinear policy-shock economies, including 50 cases with active joint portfolio constraints. Successful reconstruction of all 100 constructed equilibrium allocations, with certified rational coordinate-error bounds below (10^{-9}). 16 independently checked logit fixed-point certificates, using rigorous exponential enclosures with error bounds below (10^{-13}). 33 additional instances generated independently of preselected equilibrium solutions, covering heterogeneous populations of 4-128 agents and multiple portfolio-constraint regimes. Active portfolio restrictions in 22 of the 33 additional instances. Successful numerical solution of all 33 additional instances using projected-gradient optimization and an independent SLSQP reference solver, with a maximum absolute objective-value difference of approximately (5.433\times10^{-9}). These experiments evaluate numerical consistency, scalability across the examined population sizes, and the robustness of the computational implementation under different feasibility constraints. The results are accompanied by documented computational procedures and replication materials. Originality and Contribution to Economic Science The study's principal scientific contribution is not the invention of a universal equilibrium-existence theorem or a new foundation for convex optimization. Rather, it develops new conditional economic-mathematical results for explicitly specified human-AI delegation mechanisms, drawing on established mathematical tools while extending their application to agentic economic governance. Its distinctive contribution lies in the integration of three analytically connected problems: The relationship between strategic equilibrium selection and the safety of delegated economic decisions. The distinction between common valuation distortions and economically consequential heterogeneity across autonomous delegates. The construction of computable welfare-loss bounds and sufficient governance certificates for protecting human economic interests. Together, these results clarify the difference between optimizing the objectives of AI agents and safeguarding the welfare of the humans and institutions they represent. Scientific Significance and Scope The findings offer a mathematical foundation for further research into human-aligned AI markets, delegated financial decisions, algorithmic market coordination, equilibrium-sensitive regulation, and welfare-constrained autonomous economic systems. The framework provides theoretical guidance for designing assurance mechanisms, reviewing portfolio restrictions, and evaluating governance policies against explicitly defined welfare objectives. The investigation is theoretical-computational. Its mathematical conclusions apply under the stated assumptions, and its numerical results are derived from constructed or independently sampled synthetic economies. The study does not claim causal identification of governance effects in observed AI markets, empirical validation of deployed autonomous agents, or universal safety guarantees across all economic environments. Its broader significance is the demonstration that the economic governance of autonomous AI requires more than algorithmic efficiency: it requires explicit alignment between delegated objectives and human welfare, rigorous treatment of equilibrium multiplicity, and verifiable mathematical conditions under which governance interventions can limit economic harm. By connecting equilibrium theory, incomplete-market allocation, welfare analysis, and reproducible computation, this research contributes to the theoretical foundations of the emerging agentic economy and establishes a platform for subsequent empirical validation and institutional application. |
| Keywords: | agentic economy, human AI delegation, equilibrium selection, robust governance, incomplete markets, welfare alignment, exact computation |
| JEL: | C62 C63 C72 D52 D61 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:344185 |
| By: | Yue Li |
| Abstract: | This paper revisits the consumer search and price competition model of Wolinsky (1986). Suppose that the market has a finite number of firms, and the match value distribution function and survival function are both log-concave. Then, there is a unique symmetric pure-strategy equilibrium price with active consumer search. Two applications are discussed. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.34578 |
| By: | Bangum, Christine T.; Fiva, Jon H.; Invernizzi, Giovanna M.; Prato, Carlo; Tukiainen, Janne |
| Abstract: | We study how political parties share power internally by analyzing the allocation of list positions to different factions. We develop a theory of intra-party bargaining in which list positions shape the mobilization efforts of party activists in different factions. Our results allow us to link observable patterns in list allocations to the importance of consensus in intra-party negotiations. We empirically evaluate these predictions using data from Norwegian municipal elections. We exploit a wave of municipal mergers to identify candidates' geography-based factional affiliations. In line with our theory's functionalist logic and consensus-based bargaining, smaller factions are over-compensated in both safe and contested list positions, but more so in safe positions. Our theoretical and empirical results show that parties can promote consensus among their factions while maintaining mobilization incentives, indicating that equality and efficiency within a political organization can be simultaneously achieved. |
| Keywords: | Party Factions, Intra-Party Power Sharing, Candidate Selection, Geographic Representation, Municipal Mergers |
| JEL: | C21 C78 D72 H77 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:344254 |