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on Game Theory |
| By: | Bertrand Crettez (Université Paris-Panthéon-Assas, LEMMA); Rabia Nessah (IESEG School of Management, UMR 9221 – LEM – Lille Economie Management, F-59000 Lille, France); Tarik Tazdaït (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris) |
| Abstract: | This paper weakens the notion of robust better-reply correspondence property introduced in [Reny, P. J. [2020] Nash equilibrium in discontinuous games, Annu. Rev. Econ. 12, 439–470] to prove the existence of pure strategy Nash equilibrium in compact convex discontinuous and possibly nonquasiconcave games. Our weakening of this property is satisfied by a large class of these games and our equilibrium existence results strictly generalize the most important ones in the literature, namely those obtained in [Reny, P. J. [2020] Nash equilibrium in discontinuous games, Annu. Rev. Econ. 12, 439–470; Reny, P. [2016b] Introduction to the symposium on discontinuous games, Econ. Theory 61, 423–429; Carmona, G. and Podczeck, K. [2016] Existence of Nash equilibrium in ordinal games with discontinuous preferences, Econ. Theory 61, 457–478] (in a special case), [Reny, P. [1999] On the existence of pure and mixed strategy Nash equilibria in discontinuous games, Econometrica 67, 1029–1056; McLennan, A., Monteiro, P. K. and Tourky, R. [2011] Games with discontinuous payoffs: A strengthening of Reny's existence theorem, Econometrica 79, 1643–1664; Barelli, P. and Meneghel, I. [2013] A note on the equilibrium existence problem in discontinuous games, Econometrica 81, 813–824; Nessah, R. [2011] Generalized weak transfer continuity and Nash equilibrium, J. Math. Econ. 47, 659–662; Nessah, R. and Tian, G. [2016] On the existence of Nash equilibrium in discontinuous games, Econ. Theory 61, 515–540]. |
| Keywords: | better-reply correspondence., discontinuous game, Nash equilibrium |
| Date: | 2025–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05305754 |
| By: | Ben Abramowitz |
| Abstract: | We examine formal games that we call "capital games" in which player payoffs are known, but their payoffs are not guaranteed to be von Neumann-Morgenstern utilities. In capital games, the dynamics of player payoffs determine their utility functions. Different players can have different payoff dynamics. We make no assumptions about where these dynamics come from, but implicitly assume that they come from the players' actions and interactions over time. We define an equilibrium concept called "growth equilibrium" and show a correspondence between the growth equilibria of capital games and the Nash equilibria of standard games. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.00472 |
| By: | Venkat Ram Reddy Ganuthula; Manish Kumar Singh |
| Abstract: | This paper presents a novel game theoretic framework for analyzing academic dishonesty through the lens of a unique deterrent mechanism: forced exam script swapping between students caught copying. We model the strategic interactions between students as a non cooperative game with asymmetric information and examine three base scenarios asymmetric preparation levels, mutual non preparation, and coordinated partial preparation. Our analysis reveals that the script swapping punishment creates a stronger deterrent effect than traditional penalties by introducing strategic interdependence in outcomes. The Nash equilibrium analysis demonstrates that mutual preparation emerges as the dominant strategy. The framework provides insights for institutional policy design, suggesting that unconventional punishment mechanisms that create mutual vulnerability can be more effective than traditional individual penalties. Future empirical validation and behavioral experiments are proposed to test the model predictions, including explorations of tapering off effects in punishment severity over time. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.15307 |
| By: | Jose M. Betancourt |
| Abstract: | I study dynamic network formation games in which agents assign arbitrary values to network structures. Any such game admits an equivalent representation in terms of the values agents assign to its sub-structures, linking local valuations to equilibrium behavior. The game is a potential game precisely when all participants in a structure value it equally, yielding a closed-form stationary distribution. When valuations are restricted to a finite set of repeated sub-structures, or motifs, the model exhibits phase transitions: small changes in motif values cause discontinuous shifts in network density. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.10997 |
| By: | Smolin, Alex; Yamashita, Takuro |
| Abstract: | We study information design in games where players choose from a continuum of ac-tions and have continuously differentiable payoffs. We show that an information structure is optimal when the equilibrium it induces can also be implemented in a principal-agent contracting problem. Building on this result, we characterize optimal information struc-tures in symmetric linear-quadratic games. With common values, targeted disclosure is robustly optimal across all priors. With interdependent and normally distributed values, linear disclosure is uniquely optimal. We illustrate our findings with applications in venture capital, Bayesian polarization, and price competition. |
| Keywords: | Bayesian persuasion; information design; dual certification; first-order approach; linear-quadratic games; targeted disclosure; Gaussian coupling, linea; disclosure. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130998 |
| By: | Felix Reichel |
| Abstract: | This paper introduces a contest-theoretic simplified model of triathlon as a sequential two-stage game. In Stage 1 (post-swim), participants decide whether to continue or withdraw from the contest, thereby generating an endogenous participation decision. In Stage 2 (bike-run), competition is represented as a Tullock contest in which swim drafting acts as a multiplicative shifter of quadratic effort costs. Closed-form equilibrium strategies are derived in the two-player case, and existence, uniqueness, and comparative statics are shown in the asymmetric n-player case. The continuation decision yields athlete-specific cutoff rules in swim drafting intensity and induces subgame-perfect equilibria (SPEs) with endogenous participation sets. The analysis relates swim drafting benefits, exposure, and group size to heterogeneous effective cost parameters and equilibrium efforts. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.00349 |
| By: | Itai Arieli; Yakov Babichenko; Atulya Jain; Rann Smorodinsky |
| Abstract: | We study games with incomplete information and characterize when a feasible outcome is Pareto efficient. We show that any outcome with excessive randomization over actions is inefficient. Generically, efficiency requires that the total number of actions taken across states be strictly less than the sum of the number of players and states. We then examine the efficiency of equilibrium outcomes in communication models. Generically, a cheap talk outcome is efficient only if it is pure. When the sender's payoff is state-independent, it is efficient if and only if the sender's most preferred action is chosen with certainty. In natural buyer-seller settings, Bayesian persuasion outcomes are inefficient across a wide range of priors and preferences. Finally, we show that our results apply to mechanism design problems with many players. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.12508 |
| By: | Lukyanov, Georgy; Shamruk, Konstantin; Logina, Ekaterina |
| Abstract: | We study a dynamic reputation model with a fixed posted price where only pur-chases are public. A long-lived seller chooses costly quality; each buyer observes the purchase history and a private signal. Under a Markov selection, beliefs split into two cascades—where actions are unresponsive and investment is zero—and an interior region where the seller invests. The policy is inverse-U in reputation and produces two patterns: Early Resolution (rapid absorption at the optimistic cascade) and Dou-ble Hump (two investment episodes). Higher signal precision at fixed prices enlarges cascades and can reduce investment. We compare welfare and analyze two design levers: flexible pricing, which can keep actions informative and remove cascades for patient sellers, and public outcome disclosure, which makes purchases more informa-tive and expands investment. |
| Keywords: | Reputation; Social learning; Informational cascades; Product quality; Dynamic games. |
| JEL: | D82 D83 C73 L15 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131019 |
| By: | Tiziano De Angelis; Jan Palczewski; Jacob Smith |
| Abstract: | This paper provides necessary and sufficient conditions for a pair of randomised stopping times to form a saddle point of a zero-sum Dynkin game with partial and/or asymmetric information across players. The framework is non-Markovian and covers essentially any information structure. Our methodology relies on the identification of suitable super and submartingales involving players' equilibrium payoffs. Saddle point strategies are characterised in terms of the dynamics of those equilibrium payoffs and are related to their Doob-Meyer decompositions. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.15616 |
| By: | Baranski, Andrzej (New York University, Abu Dhabi); Reuben, Ernesto (New York University, Abu Dhabi); Riedl, Arno (Maastricht University) |
| Abstract: | In a laboratory experiment, we study the role of fairness ideals as focal points in coordination problems in homogeneous and heterogeneous groups. We elicit the normatively preferred behavior about how a subsequent coordination game should be played. In homogeneous groups, people share a unique fairness ideal how to solve the coordination problem, whereas in heterogeneous groups, multiple conflicting fairness ideals prevail. In the coordination game, homogeneous groups are significantly more likely than their heterogeneous counterparts to sustain efficient coordination. The reason is that homogeneous groups coordinate on the unique fairness ideal, whereas heterogeneous groups disagree on the fairness ideal to be played. In both types of groups, equilibria consistent with fairness ideals are most stable. Hence, the difference in coordination success between homogeneous and heterogeneous groups occurs because of the normative disagreement in the latter types of group, making it much harder to reach an equilibrium at a fairness ideal. |
| Keywords: | cooperation, coordination, focal points, fairness ideals, experiment |
| JEL: | H41 C92 D63 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18200 |
| By: | Dianetti, Jodi (Center for Mathematical Economics, Bielefeld University); Dumitrescu, Roxana (Center for Mathematical Economics, Bielefeld University); Ferrari, Giorgio (Center for Mathematical Economics, Bielefeld University); Xu, Renyuan (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | We study mean-field games of optimal stopping (OS-MFGs) and introduce an entropyregularized framework to enable learning-based solution methods. By utilizing randomized stopping times, we reformulate the OS-MFG as a mean-field game of singular stochastic controls (SC-MFG) with entropy regularization. We establish the existence of equilibria and prove their stability as the entropy parameter vanishes. Fictitious play algorithms tailored for the regularized setting are introduced, and we show their convergence under both Lasry–Lions monotonicity and supermodular assumptions on the reward functional. Our work lays the theoretical foundation for model-free learning approaches to OS-MFGs. |
| Keywords: | Mean-field game of optimal stopping, singular stochastic control, entropy regularization, randomized stopping times, fictitious play algorithm |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:755 |
| By: | Martino Banchio; Andrzej Skrzypacz; Frank Yang |
| Abstract: | A seller wants to sell a good to a set of bidders using a credible mechanism. We show that when the seller has private information about her cost, it is impossible for a static mechanism to achieve the optimal revenue. In particular, even the optimal first-price auction is not credible. We show that the English auction can credibly implement the optimal mechanism, unlike the optimal Dutch auction. For symmetric mechanisms in which only winners pay, we also characterize all the static auctions that are credible: They are first-price auctions that depend only on the seller's cost ex post via a secret reserve, and may profitably pool bidders via a bid restriction. Our impossibility result highlights the role of public institutions and helps explain the use of dynamic mechanisms in informal auctions. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.21439 |
| By: | Izgarshev, Mark; Lukyanov, Georgy |
| Abstract: | A benevolent advisor observes a project’s complexity and posts a pass–fail threshold before the agent chooses effort. The project suc-ceeds only if ability and effort together clear complexity. We com-pare two informational regimes. In the naive regime, the threshold is treated as non-informative; in the sophisticated regime, the threshold is a signal and the agent updates beliefs. We characterize equilibrium threshold policies and show that the optimal threshold rises with com-plexity under mild regularity. We then give primitives-based sufficient conditions that guarantee separating, pooling, or semi-separating out-comes. In a benchmark with uniform ability, exponential complexity, and power costs, we provide explicit parameter regions that partition the space by equilibrium type; a standard refinement eliminates most pooling. The results yield transparent comparative statics and welfare comparisons across regimes. |
| Keywords: | threshold tests; signaling; information design; monotone comparative statics; pooling vs. separation. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131005 |
| By: | Hernán Bejarano (CIDE/Chapman University); Matías Busso (IDB); Juan Francisco Santos (IDB) |
| Abstract: | This paper studies trust, reciprocity, and bargaining using a large-scale online experiment in six Latin American countries. Participants were randomly assigned to play trust and ultimatum games under conditions that either disclosed or withheld the gender of their counterpart. On average, gender disclosure did not affect behavior. However, disaggregated results show systematic differences. Men displayed higher levels of trust and reciprocity, particularly when interacting with women, and offered larger shares to women in bargaining. Women, by contrast, reciprocated more when paired with men. These findings show how gendered interactions can influence economic behavior, even when counterpart information is conveyed minimally. |
| Keywords: | Trust; Reciprocity; Bargaining; Gender; Latin America |
| JEL: | C92 D91 J16 O54 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:375 |
| By: | Martinez-Felip, Daniel; Schilizzi, Steven G.M.; Nguyen, Chi; Pannell, David |
| Abstract: | In analysing potential policy responses to improve outcomes in collective-action problems, economists often focus on financial disincentives to reduce the expected gains from free-riding and thereby promote within-group cooperation. In this study, we investigate the potential for groups to develop non-financial disincentives to free riding, thereby promoting convergence towards collectively beneficial actions. Using a within-subjects laboratory experiment, participants play two multi-period public-goods games sequentially: without and then with non-financial incentives activated by allowing for the endogenous formation of a social exclusion mechanism. This is operationalised by allowing participants, at a personal cost, to assign exclusion tickets to group members after observing their contributions: the member(s) having accumulated the most in their group gets excluded from a group activity not involving monetary payoffs nor linked to the main game. First, the threat of receiving exclusion tickets, then the threat of being excluded, and finally actually being excluded work as non-financial social disincentives to free ride. Results show that group members who contribute relatively less receive more exclusion tickets. By imposing expected social costs on relatively low contributors, exclusion or the threat of exclusion enables groups to operate with higher contribution levels, thereby reversing the collective decline in contributions observed in the Baseline public good game. Exclusion is experienced by individuals who consistently contribute less than other group members, and this experience amplifies the effectiveness of the subsequent exclusion threat. Willingness to incur personal costs to enhance the exclusion threat increases over time and it is shaped by more cooperative normative expectations. This effect is particularly pronounced among individuals who perceive norms as tight, especially when higher contributions become more dispersed. In the absence of financial disincentives, these patterns show how non-financial incentives, shaped by more cooperative normative expectations, can foster group coordination and higher public-good contributions. |
| Date: | 2025–10–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:j7usg_v1 |
| By: | Ivanik, Vasilii; Lukyanov, Georgy |
| Abstract: | We study sequential social learning with endogenous information acquisition when agents have a taste for nonconformity. Each agent observes predecessors’ actions, decides whether to acquire a private signal (and how precise it should be), and then chooses between two actions. Payoffs value correctness and include a bonus for taking the less popular action among pre-decessors; because this bonus depends only on observed popularity, the equilibrium analysis avoids fixed points in anticipated popularity and preserves standard Bayesian updating. In a Gaussian–quadratic setting, optimal actions follow posterior thresholds that tilt against the majority, and we solve the precision choice problem. Whenever the no-signal decision aligns with the observed majority, stronger contrarian motives weakly raise the value of information and expand the set of histories in which agents invest. We provide compact comparative statics for thresholds, action probabilities, and the precision argmax, a local welfare-and-information treatment, and applications to scientific priority races, cultural diffusion, and online platforms. |
| Keywords: | social learning; information cascades; endogenous information acquisition; nonconformity; popularity; Bayesian thresholds. |
| JEL: | D83 C72 D82 D85 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131013 |
| By: | Fabian Dietz; Stephan Eitel |
| Abstract: | We consider a model of infinitely repeated lottery contests in which the winner of the prior contest (incumbent) additionally gains the opportunity to bias the subsequent contest by exerting early effort in an intermediate stage. An effortmaximizing contest designer strategically chooses the cost advantage of incumbency. We show that the contest designer prefers to set the cost advantage such that the incumbent only partially discourages the contender, i.e. the contender exerts less, but still positive, effort than in an unbiased contest. In this way, rent extraction is higher than under independent lottery contests with no intermediate stage, because (i) players compete fiercer to become the incumbent and (ii) the increase in early effort outweighs the decrease in effort in the biased contest. Therefore, we provide some rationale for incumbency advantages, for example in repeated procurement settings. |
| Keywords: | repeated contests, lottery contest, incumbent, discouragement effect |
| JEL: | C72 C73 D72 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:244_dietz_eitel.rdf |
| By: | Masaaki Fujii (Faculty of Economics, The University of Tokyo) |
| Abstract: | In this work, we combine the mean-field game theory with the classical idea of binomial tree framework, pioneered by Sharpe and Cox, Ross & Rubinstein, to solve the equilibrium price formation problem for the stock. For agents with exponential utilities and recursive utilities of exponential type, we prove the existence of a unique mean-field equilibrium and derive an explicit formula for equilibrium transition probabilities of the stock price by restricting its trajectories onto a binomial tree. The agents are subject to stochastic terminal liabilities and incremental endowments, both of which are dependent on unhedgeable common and idiosyncratic factors, in addition to the stock price path. Finally, we provide numerical examples to illustrate the qualitative effects of these components on the equilibrium price distribution. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tky:fseres:2025cf1261 |
| By: | Agathe Pernoud; Frank Yang |
| Abstract: | A monopolist sells multiple goods to an uninformed buyer. The buyer chooses to learn any one-dimensional linear signal of their values for the goods, anticipating the seller's mechanism. The seller designs an optimal mechanism, anticipating the buyer's learning choice. In a generalized Gaussian environment, we show that every equilibrium has vertical learning where the buyer's posterior means are comonotonic, and every equilibrium is outcome-equivalent to nested bundling where the seller offers a menu of nested bundles. In equilibrium, the buyer learns more about a higher-tier good, resulting in a higher posterior variance on the log scale. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.16396 |
| By: | Cheredina, Darina; Lukyanov, Georgy |
| Abstract: | We study sequential social learning when agents can sometimes pay to verify a claim and obtain hard, publicly checkable evidence. Each agent observes the public history, receives a private signal, may investigate at a cost (succeeding only when the claim is true), and can disclose or conceal any proof. Actions are binary or continuous, with a conformity pull toward the prevailing consensus. We characterize when false cascades persist and when societies self-correct. In the binary benchmark, we derive an investigation cutoff and show how its location relative to classic cascade bands governs breakability; a simple knife-edge condition guarantees that any wrong cascade at the boundary is overturned with positive probability. With continuous actions, coarse observation and conformity can recreate cascades, yet occasional disclosures collapse them. These forces yield a tractable “resilience frontier” with transparent comparative statics and policy levers. |
| Keywords: | social learning; informational cascades; verification; misinformation; conformity; dis-closure |
| JEL: | D83 D85 C73 C72 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131039 |
| By: | Motoki Otsuka |
| Abstract: | We show that each of the regularity properties of regular conditional distributions of correspondences (convexity, closedness, compactness, and preservation of closed graphs) is equivalent to the condition of nowhere equivalence. This result does not require any countable-generation assumptions. As an application, we establish the existence of a pure-strategy equilibrium for large games with general trait spaces. The trait space may be an arbitrary measurable space. As a corollary, we obtain the existence of a pure-strategy equilibrium in semi-anonymous settings in which payoffs depend, in addition to agents' own actions, on the joint distribution over the space of agents and actions. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.15898 |
| By: | Nathan Hancart |
| Abstract: | Two identical firms compete to attract and hire from a pool of candidates of unknown productivity. Firms simultaneously post a selection procedure which consists of a test and an acceptance probability for each test outcome. After observing the firms' selection procedures, each candidate can apply to one of them. Both firms have access to a limited set of feasible tests. The firms face two key considerations when choosing their selection procedure: the statistical properties of their test and the selection into the procedure by the candidates. I identify two partial orders on tests that are useful to characterise the equilibrium of this game: the test's accuracy (Lehmann, 1988) and difficulty. I show that in any symmetric equilibrium, the test chosen must be maximal in the accuracy order and minimal in the difficulty order. Intuitively, competition leads to maximal but misguided learning: firms end up having precise knowledge that is not payoff relevant. I also consider the cases where firms face capacity constraints, have the possibility of making a wage offer and the existence of asymmetric equilibria where one firm is more selective than another. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.12653 |
| By: | Cecilia Carvalho; Daniel Monte; Emanuel Ornelas |
| Abstract: | Members of the World Trade Organization are increasingly disregarding its rules, raising concerns about the future of the multilateral trading system. To analyze the sustainability of the rules-based trade regime, we develop a dynamic framework of stochastic asynchronous games where the leading country determines the trade regime and leadership changes over time. We show that transitioning from a power-based to a rules-based regime requires the presence of a hegemonic power - i.e., a country significantly larger than all others. Non-hegemonic leading countries benefit from a power-based regime, but may nevertheless uphold rules anticipating that they can lose their dominance in the future. We find that the long-term viability of a rules-based equilibrium hinges on the cost of establishing it, which must be neither too small nor too large, on countries' discount factors and on the degree of turnover in world leadership, both of which must be sufficiently large. In a bipolar state, free-riding and market-power forces further undermine the feasibility of rules-based equilibria. We also highlight the trade-offs that a redesign of the WTO rules must face to remain viable. If the leading country becomes shortsighted, the system needs to become more efficient, offer more latitude to the leading country, or even exclude it from the system. |
| Keywords: | hegemonic stability theory, World Trade Organization, trade agreements |
| JEL: | F02 F13 F53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12203 |
| By: | Vijay Adithya C ((Corresponding author), Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025, India.); Poornapushkala Narayanan (Madras School of Economics, Chennai, Tamil Nadu, India, 600025) |
| Abstract: | This paper studies a Cournot market with infinitely many firms facing constant but heterogeneous marginal costs, without assuming perfect competition. We determine a necessary and sufficient condition for the existence of equilibrium - the marginal costs converge to a limit r with summable deviations. We deduce from this condition that perfect competition is not automatic in such markets, but competitive behavior emerges asymptotically under certain conditions on the costs. We also consider a family of finite markets growing to the infinite limit market. We show that the equilibria of finite markets converge to that of the limit market if and only if the average marginal costs of the finite markets converge to r. |
| Keywords: | Cournot-Nash Equilibrium, Limit Market, Equilibrium Convergence |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2025-290 |
| By: | Siyang Xiong |
| Abstract: | Focusing on stochastic finite-action mechanisms, we study implementation in undominated strategies and iteratively undominated strategies. We establish both possibility and impossibility results that resolve the open question in B\"orgers (1995). Contrary to the conventional understanding that positive results on Nash implementation need separability, quasilinearity, or infinite action sets, we provide -- to our knowledge -- the first positive result beyond those demanding assumptions. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.20790 |
| By: | Lars Boerner (Martin Luther University Halle-Wittenberg, IWH Leibniz Institute & DAFM King’s College London); Erik O. Kimbrough (Economic Science Institute, Chapman University); Mouli Modak |
| Abstract: | We study how well people are able to solve pure coordination problems in continuous time. Subjects decide whether and when to pay a cost to go to market with their goods and earn money only if another person shows up at the same time. We show that coordination failure is common in a baseline, and we introduce treatments that feature public coordination devices (meant to mimic clocks) and assess the extent to which coordination improves when such devices are provided via different institutions. A publicly provided device outperforms a variety of privately provided alternatives. Our evidence suggests this is because reliable public provision eliminates uncertainty about whether (and how many) other people expect to observe the coordinating signal. |
| Keywords: | coordination games, experiments, timing games |
| JEL: | C7 C9 D01 D9 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:25-09 |
| By: | Jo\~ao Zambujal-Oliveira; Andr\'e Silva; Rui Vasconcelos |
| Abstract: | As people become more conscious of their health and the environment, the demand for organic food is expected to increase. However, distinguishing organic products from conventionally produced ones can be hard, creating a problem where producers may have the incentive to label their conventional products as organic to sell them at a higher price. Game theory can help to analyze the strategic interactions between producers and consumers in order to help consumers verifying these claims. Through a game theory analysis approach, this paper provides evidence of the need for a third party to equalize markets and foster trust in organic supply chains. Therefore, government regulation, including regular and random monitoring and certification requirements, plays a crucial role in achieving the desired level of trust and information exchange among supply chain agents, which ultimately determines the growth trajectory of the sector. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.12420 |
| By: | Bo Cowgill (Columbia Business School, Columbia University, New York, NY, USA); Zikai Xu (Department of Economics, Columbia University, New York, NY, USA) |
| Abstract: | This paper develops a mechanism design approach to network formation. A principal has a willingness-to-pay (WTP) for different network configurations while agents have preferences over their network positions. Our approach allows the principal to optimize for global properties of the network, while respecting IC/IR constraints of network participants. We focus on direct mechanisms but develop a broader family of mechanisms in which transfers are set by the allocation rule ("revenue equivalence"). We characterize optimal mechanisms under novel multidimensional regularity conditions and provide an ironing procedure for irregular distributions. These findings contribute to multidimensional mechanism design, with potential applications to network formation in social, economic, and organizational contexts. |
| Keywords: | mechanism design; virtual values; network formation |
| JEL: | D85 L14 D44 D82 D86 D2 M5 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2501 |