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on Game Theory |
| By: | Nikos Dimou; Alex McAvoy |
| Abstract: | Originating in evolutionary game theory, the class of "zero-determinant" strategies enables a player to unilaterally enforce linear payoff relationships in simple repeated games. An upshot of this kind of payoff constraint is that it can shape the incentives for the opponent in a predetermined way. An example is when a player ensures that the agents get equal payoffs. While extensively studied in infinite-horizon games, extensions to discounted games, nonlinear payoff relationships, richer strategic environments, and behaviors with long memory remain incompletely understood. In this paper, we provide necessary and sufficient conditions for a player to enforce arbitrary payoff relationships (linear or nonlinear), in expectation, in discounted games. These conditions characterize precisely which payoff relationships are enforceable using strategies of arbitrary complexity. Our main result establishes that any such enforceable relationship can actually be implemented using a simple two-point reactive learning strategy, which conditions on the opponent's most recent action and the player's own previous mixed action, using information from only one round into the past. For additive payoff constraints, we show that enforcement is possible using even simpler (reactive) strategies that depend solely on the opponent's last move. In other words, this tractable class is universal within expectation-enforcing strategies. As examples, we apply these results to characterize extortionate, generous, equalizer, and fair strategies in the iterated prisoner's dilemma, asymmetric donation game, nonlinear donation game, and the hawk-dove game, identifying precisely when each class of strategy is enforceable and with what minimum discount factor. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.19828 |
| By: | Yash Prajapati |
| Abstract: | This paper examines public goods and evaluates the mechanism through the game theory. Public goods are characterized by nonexclusivity and nonrivalry and this creates fundamental challenges for allocation. We analyze why competitive markets undersupply public goods by deriving the inefficiency formally through Nash equilibrium. The paper evaluates theoretical solutions including Lindahl pricing, Clarke-Groves mechanisms, and voting schemes. The paper will cover their efficiency properties and practical limitations. We show how strategic interaction leads to free-riding behavior using roommates dilemma and other examples. We also cover why a large household lives in messy conditions not because individuals are lazy, but because they are rational players in a Nash equilibrium. We also examine voting mechanisms, the median voter theorem, and recent developments in truth-revealing mechanisms. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.15686 |
| By: | Itai Maimon |
| Abstract: | Classic Rock-Paper-Scissors, RPS, has seen many variants and generalizations in the past several years. In the previous paper, we defined playability and balance for games. We used these definitions to show that different forms of imbalance agree on the most balanced and least balanced form of playable two-player n-object RPS games, referred to as (2, n)-RPS. We reintroduce these definitions here and show that, given a conjecture, the generalization of this game for m |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.13736 |
| By: | Hu, Peicong; Sobel, Joel |
| Abstract: | A manager has access to expert advisers. The manager selects at most one project and can implement it only if one expert provides support. The game in which the manager consults experts simultaneously typically has multiple equilibria including one in which at least one expert supports the manager’s favorite project. We describe the set of outcomes that survive iterative deletion of weakly dominated strategies. These outcomes typically exclude the manager’s most preferred equilibrium outcome. We introduce sequential procedures and compare their performance to the simultaneous game. In general, sequential consultation may be superior or inferior to simultaneous consultation. |
| Keywords: | 38 Economics (for-2020), 3801 Applied Economics (for-2020), 3803 Economic Theory (for-2020) |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucsdec:qt3q79f8sh |
| By: | Alexander Frug; Malachy James Gavan |
| 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:upf:upfgen:1930 |
| By: | Germán Coloma |
| Abstract: | This paper analyzes the behavior of the Argentine chocolate bar industry during the period 2019-2022. It mainly focuses on the level of competition between the firms in the industry, estimating conduct parameters that signal the existence of harder or softer competition. The estimations change considerably under different demand specifications, and also if we explicitly model product differentiation at the level of the supplying firms. This allows discarding extreme hypotheses such as perfect competition and collusion, and it slightly favors the existence of quantity (Cournot) competition over price (Bertrand) competition. |
| Keywords: | Chocolate bars, Argentina, competition, product differentiation, conduct parameters. |
| JEL: | C32 L13 L66 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:cem:doctra:869 |
| By: | Pierre Bernhard (MACBES Team, INRIA Center of Université Côte d’Azur, Sophia Antipolis, France); Marc Deschamps (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France); Georges Zaccour (GERAD – HEC Montréal, Québec, Canada) |
| Abstract: | Space infrastructure and data have become indispensable to humanity at all scales, which is largely due to the advent of the New Space era, characterized by the creation of large satellite constellations. Unfortunately, these remarkable developments exacerbate an already pressing issue: the growing accumulation of space debris. In this article, we propose a dynamic gametheoretic model showing that this problem can be contained, if an international institution is created and empowered to levy taxes to finance active debris removal activities. |
| Keywords: | Dynamic games, space debris, large constellations, active debris removal, international institution |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2025-13 |
| By: | Daniel Fershtman; Kfir Eliaz; Alexander Frug |
| Abstract: | We study optimal dynamic scheduling of workers to tasks when task completion is privately observed —so that workers can delay the release of finished tasks — and idle time is the only available incentive instrument. We characterize a scheduling rule, and its induced equilibrium, that maximizes expected discounted output. Unless workers are inherently slow, production alternates between efficient phases and delays. Our analysis reveals a trade-off between the quality and the size of the workforce. We also present several extensions, illustrating the versatility of the framework. |
| Keywords: | moral hazard , strategic servers , non-monetary incentives , optimal scheduling , idle time , multi-server systems |
| JEL: | D82 J24 C73 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:upf:upfgen:1928 |
| By: | Peter Achim (York University); Roland Strausz (HU Berlin) |
| Abstract: | In modern information markets, buyers routinely combine signals from multiple sellers. We develop a model of ``portfolio competition'' to analyze this distinctive feature. We show that the combinability of information overturns standard oligopoly intuition. Unlike traditional markets, competitive pressure does not necessarily protect buyers: when signals are complements, sellers can leverage the buyer's desire for the joint portfolio to extract the full social surplus, regardless of the number of competitors. We characterize the precise conditions for rent extraction, which reduce to a simple geometric test for symmetric sellers. Furthermore, we find that the canonical logic of market entry fails. Entry is never socially excessive because efficient portfolio choices eliminate business-stealing effects. Paradoxically, entry can reduce competitive pressure: when entrants provide strong complementarities, they shift the buyer's threat point, allowing all sellers to extract higher rents. |
| Keywords: | information markets; portfolio competition; market entry; data economy; complementarity; |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:554 |
| By: | Monika Nalepa; Simone Paci |
| Abstract: | How can states rebuild fiscal capacity after a civil war? Trust in political institutions and trust in fellow citizens are cornerstones of tax compliance, necessary for a functioning fiscal contract. We posit that transitional justice (TJ) can influence both channels. We use a simple game of tax compliance to represent the trade-off posed by TJ, which at the same time affects trust towards other citizens and in political institutions. |
| Keywords: | Transitional justice, Civil conflict, Taxation, Post-conflict, State capacity, Game theory |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-92 |