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on Game Theory |
| By: | Michele Crescenzi |
| Abstract: | An axiomatic characterization of Nash equilibrium is provided for games in normal form. The Nash equilibrium correspondence is shown to be fully characterized by four simple and intuitive axioms, two of which are inspired by contraction and expansion consistency properties from the literature on abstract choice theory. The axiomatization applies to Nash equilibria in pure and mixed strategies alike, to games with strategy sets of any cardinality, and it does not require that players' preferences have a utility or expected utility representation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.03930 |
| By: | Nizar Riane |
| Abstract: | In this paper, we study the public procurement market through the lens of game theory by modeling it as a strategic game with discontinuous and non-quasiconcave payoffs. We first show that the game admits no Nash equilibrium in pure strategies. We then analyze the two-player case and derive two explicit mixed-strategy equilibria for the symmetric game and for the weighted $(p, 1-p)$ formulation. Finally, we establish the existence of a symmetric Nash equilibrium in the general $N$-player case by applying the diagonal disjoint payoff matching condition, which allows us to extend equilibrium existence to the mixed-strategy setting despite payoff discontinuities. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.10109 |
| By: | Sam Ganzfried |
| Abstract: | We present an algorithm for computing evolutionarily stable strategies (ESSs) in symmetric perfect-recall extensive-form games of imperfect information. Our main algorithm is for two-player games, and we describe how it can be extended to multiplayer games. The algorithm is sound and computes all ESSs in nondegenerate games and a subset of them in degenerate games which contain an infinite continuum of symmetric Nash equilibria. The algorithm is anytime and can be stopped early to find one or more ESSs. We experiment on an imperfect-information cancer signaling game as well as random games to demonstrate scalability. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.10279 |
| By: | C. Monica Capra; Charles A. Holt; Po-Hsuan Lin |
| Abstract: | When players make sequential decisions that are unobservable to one another, their behavior can nonetheless be influenced by knowing who moves first. This sequential structure, often referred to as "virtual observability, " suggests that timing alone can shape expectations and choices, even when no information is revealed. The original notion of virtual observability, however, is an equilibrium refinement based on the timing structure and has no bite in games with a unique equilibrium. In this paper, we experimentally examine whether timing still affects behavior in such games, using the Traveler's Dilemma and the Trust Game. We find that in the sequential Traveler's Dilemma without observability, first movers tend to behave closer to the equilibrium prediction than in the simultaneous version. In contrast, timing without observability has no effect on behavior in the Trust Game. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.01244 |
| By: | Trockel, Walter (Center for Mathematical Economics, Bielefeld University); Duman, Papatya (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | This article addresses conceptual shortcomings in recent literature on coalitional TU-games. We revisit and partly redefine key notions such as coalition, coalition function, efficiency, and duality, emphasizing their dependence on the class of TU-games under scrutiny. Unlike approaches that exclude non-cohesive games or rely on imputations, we propose a broader framework grounded in aspiration. We also introduce a refined notion of a dual game, which aligns better with its typical interpretation and coincides with the classical version on superadditive games. Finally, we characterize the cohesive hull of a game via the duality theorem in linear programming, drawing parallels to the construction of the core via the Bondareva-Shapley theorem. |
| Keywords: | TU-games, duality, core, c-Core, cohesive games, complete game efficiency |
| Date: | 2025–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:bie:wpaper:757 |
| By: | Dietzenbacher, Bas (RS: GSBE other - not theme-related research, QE Math. Economics & Game Theory); Núñez Lugilde, Iago; Sánchez-Rodríguez, Estela |
| Abstract: | Streaming platforms offer subscribers unlimited access to content against a periodic subscription fee. To address the problem of dividing the revenues of the platform in a stable way among the content creators, we model these situations as cooperative streaming platform games and analyze the structure of the core. In particular, we study the construction of the core of a streaming platform game from the cores of its so-called marginal games, dominated games, and utopia games. |
| JEL: | C71 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2025009 |
| By: | Roberto Mazzoleni; Hamza Virk |
| Abstract: | We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.05261 |
| By: | Kudo, Shiko |
| Abstract: | We describe cross dominance, a bilateral strengthening of weak dominance: switching B->A is never worse for either player. Cross dominance is strictly stronger than weak dominance yet orthogonal to strict dominance; within the Pareto-monotone slice we have SD => CD => WD. This yields a shared-interest ladder (weak -> cross -> strict-cross) that runs in parallel to the classical self-interest ladder (weak -> strict), offering a simple, outcome-agnostic rationale for pruning strategies like B in the motivating 2x2 game. |
| Keywords: | game theory; weak dominance; strict dominance; cross dominance; Pareto-monotone; strategy elimination |
| JEL: | C70 C72 |
| Date: | 2025–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126766 |
| By: | Gong, Doudou; Dietzenbacher, Bas (RS: GSBE other - not theme-related research, QE Math. Economics & Game Theory) |
| Abstract: | The lower and upper exact core bounds describe the minimum and maximum individual payoffs with in the core of a balanced game, respectively. Based on these bounds, we introduce lower and upper core bound reduced games and study the relation with other reduced games. We axiomatically characterize new solutions for balanced games as unique core bound consistent extensions of the classical two-player principles unanimity, standardness, and constrained egalitarianism. We name these solutions core covers, equal gap values, and constrained equality values. |
| JEL: | C71 |
| Date: | 2025–03–10 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2025002 |
| By: | Irving Argaez Corona (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne); Béatrice Boulu-Reshef (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | This study investigates how the disclosure of personality traits affects strategic behaviour in trustsensitive environments. Specifically, we examine whether making information about personality traits visible-either about oneself, one's counterpart, or both-modifies coordination outcomes. In a repeated stag-hunt game, 192 participants were classified as either trusting or mistrusting types and randomly assigned to one of four information conditions (no information, private, public, or full visibility). We elicited first and second-order beliefs across 48 rounds to analyse how trait visibility shapes expectations and behaviour through four mechanisms: (1) self-identification, (2) preferencebased discrimination, (3) first-order belief bias, and (4) second-order belief pessimism. Our resultsshow that when traits are not disclosed, personality has no behavioural effect: trusting and mistrusting types look alike. Once labels appear, behaviour is driven by expectations, not by self-identification or type-based preferences. We observe that labels shift beliefs toward trusting counterparts, but this fades with feedback. Moreover, information increases predictability and strategic alignment, yet can nudge play toward the safer, inefficient equilibrium-so coordination rises even as cooperation can fall. |
| Abstract: | Cette étude examine comment la divulgation de traits de personnalité affecte le comportement stratégique dans des environnements sensibles à la confiance. Plus précisément, nous analysons si rendre visibles des informations de personnalité — sur soi-même, sur son partenaire, ou sur les deux — modifie les résultats de coordination. Dans un jeu répété du type stag-hunt, 192 participants ont été classés comme « confiants » ou « méfiants » et assignés aléatoirement à l'un de quatre régimes d'information (aucune information, information privée, information publique ou visibilité totale). Nous avons recueilli des croyances de premier et de second ordre sur 48 manches afin d'étudier comment la visibilité des traits façonne attentes et comportements via quatre mécanismes : (1) auto-identification, (2) discrimination fondée sur le type, (3) biais de croyances de premier ordre et (4) pessimisme de croyances de second ordre. Nos résultats montrent que, en l'absence de divulgation, la personnalité n'a pas d'effet comportemental : les types confiants et méfiants se ressemblent. Une fois les étiquettes visibles, le comportement est principalement guidé par les attentes, non par l'auto-identification ni par des préférences de type. Nous observons que les étiquettes déplacent temporairement les croyances en faveur des partenaires « confiants », mais cet effet s'estompe avec le feedback. Par ailleurs, l'information accroît la prévisibilité et l'alignement stratégique, tout en pouvant orienter le jeu vers l'équilibre plus sûr mais inefficace — la coordination augmente alors même que la coopération peut diminuer. |
| Keywords: | first-order beliefs, strategic settings, stag-hunt game, personality types, second-order beliefs, cooperation, coordination, Information disclosure, Information disclosure coordination cooperation first-order beliefs second-order beliefs personality types stag-hunt game strategic settings |
| Date: | 2025–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:hal-05393326 |
| By: | Ashwin Kambhampati |
| Abstract: | Equilibrium predictions in games of incomplete information are sensitive to the assumed information structure. Monderer and Samet (1996) and Kajii and Morris (1998) define topological notions of proximity for common prior information structures such that two information structures are close if and only if (approximate) equilibrium payoffs are close. However, Monderer and Samet (1996) fix a common prior and define their topology on profiles of partitions over a state space, whereas Kajii and Morris (1998) define their topology on common priors over the product of a state space and a type space. We prove the open conjecture that two partition profiles are close in the Monderer and Samet (1996) topology if and only if there exists a labeling of types such that the associated common priors are close in the Kajii and Morris (1998) topology. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.03982 |
| By: | Omer F. Baris (Nazarbayev University, Graduate School of Public Policy); Shreekant Gupta (Centre for Development Economics & Centre for Social and Economic Progress); Eduardo Araral Jr (National University of Singapore, Lee Kuan Yew School of Public Policy) |
| Abstract: | We extend the canonical 2 × 2 inspection game to a 3 × 3 framework that allows strategic non-compliance and an inspection–quality choice, and test it in nine laboratory sessions (164 subjects) in India, Singapore, and Kazakhstan. Static evidence confirms the Harrington paradox: firms comply far more than risk-neutral theory predicts, yet Boards choose the cheap, low-detection audit in over 60% of rounds. Dynamic logit and multinomial specifications reveal four mechanisms. First, strong inertia: current compliance is the strongest predictor of future compliance. Second, inspection quality matters but only briefly. Thorough inspections raise compliance on impact and the effect dissipates within approximately three rounds. Third, cursory audits have no immediate effect; in longer-lag models their positive association with compliance is consistent with behavioral inertia rather than direct deterrence. Fourth, punishment works slowly: individual fines are insignificant on impact, while a history of fines has a modest cumulative influence, indicating graduated deterrence. Moral framing partially counteracts the compliance drop caused by strategic complexity, and country/demographic controls leave core results unchanged. Together, these findings reconcile the Harrington paradox: sticky firm behavior sustains excess compliance, whereas fading inspection salience and the prevalence of cheap cursory audits generate under-enforcement. Policy-wise, improving inspection quality, rather than increasing frequency or fine size, yields the highest marginal deterrence when regulators face capacity constraints and firms can game detection technologies. |
| Keywords: | Enforcement · Inspection · Compliance · Corruption JEL codes: C91 · D64 · D73 · J24 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cde:cdewps:355 |
| By: | Benjamin Heymann |
| Abstract: | We model a procurement scenario in which two \textit{imperfect} bidders act simultaneously on behalf of a single buyer, a configuration common in display advertising and referred to as \textit{side-by-side bidding} but largely unexplored in theory. We prove that the iterated best response algorithm converges to an equilibrium under standard distributional assumptions and provide sufficient condition for uniqueness. Beyond establishing existence and convergence, our analysis provides a tractable numerical method for quantitative studies of side-by-side procurement. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.04850 |
| By: | Viet Lien Le (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Tu Anh Bui (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Anh Ngoc Nguyen (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi); Ngoc-Minh Nguyen (Development and Policies Research Center (DEPOCEN), Suite 305 - 307, 12 Trang Thi Street, Hoan Kiem, Hanoi) |
| Abstract: | This paper develops and tests a Nash bargaining model of household labor allocation. The model explains how spouses allocate their time to housework by maximizing joint utility while accounting for outside options such as income opportunities. In this framework, the spouse contributing more earnings gains stronger bargaining power and can negotiate a smaller share of housework. Using Vietnamese panel data from 2018 and 2020, we estimate a Seemingly Unrelated Regression (SUR) system to examine how relative income influences household labor division. The results show that women with higher relative income reduce their housework time. Moreover, relative income affects the reallocation between spouses: husbands increase their contribution to domestic tasks while wives reduce theirs. For specific activities, relative income decreases wives’ time on both pure household chores and caregiving. Our findings contribute to the literature by providing evidence from a developing Asian country and underscore the importance of women’s economic empowerment in promoting gender equality in unpaid work. |
| Keywords: | Household decisions, Nash, |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0196 |
| By: | Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Rossetto, Nicolò (Florence School of Regulation (FSR), European University Institute (EUI), Italy); Schmitt, Laurent (Digital4Grids, France, and dcbel, Canada); Smilgins, Aleksandrs (Department of Economics, Copenhagen Business School) |
| Abstract: | The digitalisation of the energy sector is giving rise to energy data spaces that aim to support secure, interoperable, and sovereign data sharing among stakeholders. While the focus has mainly been on technical aspects of data spaces, the economic dimensions, particularly the allocation of costs, are underexplored. This paper addresses this gap by examining principles and methods for cost allocation. We review ongoing European initiatives for energy data sharing and discuss how it can generate value while ensuring efficiency and fairness in cost allocation. We identify proportional and weighted proportional allocation rules as robust and implementable solutions. In addition, we briefly discuss governance options for fair access, data sovereignty, and economic sustainability, emphasising the complementary roles of public coordination and market mechanisms. We propose policy recommendations for a sustainable and equitable energy data ecosystem design in Europe: (i) the establishment of a single coordinating entity for a European energy data space, (ii) adoption of proportional cost allocation as default principle, (iii) distinguish between regulated and non-regulated exchanges, and (iv) incentivise early participation and data contribution. |
| Keywords: | Cost allocation; Data spaces; Economic sustainability; Energy sector; European policy. |
| JEL: | C70 D40 L90 Q40 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2025_013 |
| By: | Daiya ISOGAWA; Hiroshi OHASHI |
| Abstract: | This paper examines the distortionary incentives created by ratchet-based regulation of medical device reimbursement prices. In Japan, reimbursement rates for devices such as cardiac pacemakers are revised every two years, with adjustments based on transaction prices observed between hospitals and device sellers during designated sampling periods. This retrospective pricing rule gives hospitals and sellers a shared incentive to raise prices during update periods -- an incentive that contrasts with their ordinarily opposing interests in price negotiations. Using a Nash-in-Nash bilateral bargaining model and transaction-level cost data, the study finds that hospitals generally hold greater bargaining power than device sellers. When cost data are unavailable -- as is common in much of the existing literature -- the estimated bargaining parameters differ markedly under conventional cost assumptions. Wholesale prices are higher compared to counterfactuals without the ratchet-based regulation, with distortions more pronounced in less competitive product categories. Although the ratchet mechanism could, in principle, have raised reimbursement prices by more than 20%, our simulations indicate that the actual effect was modest. This attenuated impact is attributable to institutional features of the reimbursement system including the government’s use of a relatively long sampling window and its aggregation of products into broad functional categories. This institutional architecture collectively reduces the scope for strategic price inflation. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25118 |
| By: | Chihiro Shimizu; Xiaoying Deng |
| Abstract: | We develop a structural framework in which cross-border commercial real estate prices reflect fundamentals, a macro-valuation component, and an endogenous nationality-specific bargaining wedge. Building on recent work on the interest rate-growth differential, safe-asset shortages, and global capital-flow frictions, we show that capital controls, geopolitical tensions, and financial-market depth shift investors' outside options and beliefs, generating systematic pricing differentials across nationalities. Using 1, 113, 349 global commercial property transactions from 172 countries, we provide the first large-scale empirical estimates of these bargaining wedges. After controlling for detailed property characteristics and multi-layer fixed effects, Chinese investors pay persistent premia -- 18-22 percent on average and up to 21.7 percent in offshore markets -- while U.S. investors obtain 3-4 percent discounts. These wedges respond sharply to macroprudential and geopolitical regimes: China's capital-control tightening compresses premia, whereas the U.S.-China trade war increases them for both sides. Our results reveal that nationality-specific bargaining power is an equilibrium outcome shaped jointly by macroeconomic valuation forces, regulation, and geopolitical shocks. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:tcr:wpaper:e218 |