|
on Game Theory |
| By: | Tomohiko Kawamori |
| Abstract: | We define a category of strategic games in which a morphism is a pair of a map between sets of players and a map between sets of strategy profiles with specific properties and show that this category is well-defined. Three cases are considered for the maps between sets of strategy profiles: they may be order-preserving, order-reflecting or order-embedding with respect to each player's preference relation. We define a presheaf on the category of games valued in a category of sets that sends each strategic game to a set of strategy profiles and present conditions for this presheaf to be well-defined. Two cases are considered for the morphisms in the category of sets: they may be relations or maps. We define a presheaf that sends each strategic game to the set of Nash equilibria (resp. Pareto efficient strategy profiles) and show that this presheaf is well-defined if and only if the maps between sets of strategy profiles are order-reflecting or order-embedding (resp. order-embedding), and the morphisms in the category of sets are relations. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.08310 |
| By: | Dantong Chu; Xuefeng Gao; Yufei Zhang |
| Abstract: | As firms increasingly deploy machine learning for strategic decision-making, understanding algorithmic interactions has become central to operations research and economics. This paper studies learning in infinite-horizon, nonzero-sum linear-quadratic stochastic games under a radically uncoupled information structure, where players are either unaware of opponents or strategically oblivious, observing only a common state and their own action history. Under this minimal information, we analyze an asynchronous decentralized learning process in which each player independently runs a single-agent $\epsilon$-greedy iterated least-squares algorithm. We prove that, despite being unable to identify the system parameters, players' learning dynamics converge almost surely to the complete-information Nash equilibrium and characterize the convergence rate. We then apply the framework to a dynamic Cournot competition with sticky prices. Numerical experiments validate the theoretical results and show that learning under limited information reduces firm profits under both low and high price stickiness, while total surplus declines and market concentration increases when price stickiness is high. Publicly revealing aggregate market output substantially accelerates convergence and mitigates these welfare losses. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.08268 |
| By: | Boyu Liu; Wei Tang; Zihe Wang; Shuo Zhang |
| Abstract: | Classic results show that even an arbitrarily small correlation across bidders' information can enable full surplus extraction in auctions and related mechanism design settings. Motivated by this fragility, we study the information independence in a second-price auction when the seller commits to a private private information structure, meaning bidders' signals are independent ex ante, while bidders share a symmetric and arbitrarily correlated prior distribution over their valuations. We first show that the seller optimal efficient outcome with full surplus extraction can always be implemented by a private private information structure that admits a Bayes Nash equilibrium. However, this equilibrium may not be stable. We then further construct a private private information structure that achieves revenue arbitrarily close to maximum welfare while admitting a strict equilibrium. At the same time, we establish an impossibility result: under private private information, in general, bidder surplus cannot achieve maximal welfare exactly, and we characterize necessary and sufficient conditions on the prior distribution under which bidder surplus can be made arbitrarily close to maximal welfare. We finally explore which other efficient outcomes are achievable under private private information. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.24530 |
| By: | Dana Golden |
| Abstract: | When does the global game information structure select a unique equilibrium? Limit uniqueness in two-player supermodular games fails exactly when a risk-dominant better response cycle exists (Veiel, 2025). We show that rank-one factor structure on payoffs eliminates such cycles entirely, so every rank-one supermodular game admits a generalized ordinal potential and limit uniqueness follows for any number of actions. The boundary is sharp: an explicit three-action rank-two game carries a length-six cycle, no supermodular game carries a cycle of length four, and every game within a quantified sup-norm margin of a nondegenerate rank-one game is cycle-free. Rank-one structure can also be manufactured: when players compete across many independent markets with common latent payoffs, the stacked observation matrix is rank one plus sparse, and a Robust PCA estimator leaves residual noise that vanishes with the signal scale yet stays positive at any finite sample, even under partial observation. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.23360 |
| By: | R. B. Bapat; Debapriya Sen |
| Abstract: | We solve a natural bimatrix game related to graphs. We consider a finite directed graph $G=(V, E), $ where the strategy set of Player I is the set of vertices $V$ and that of Player II is the set of edges $E.$ There are two sets of positive weights ${\{\alpha_e\}}_{e\in E}$ and ${\{\beta_e\}}_{e\in E}.$ If Player I chooses a vertex $v$ and Player II chooses an edge $e, $ then the payoff to both players is zero if $v$ and $e$ are not incident. If $e$ originates from $v, $ then Player I obtains $\alpha_e$ and Player II obtains $-\beta_e.$ If $e$ terminates at $v, $ then Player I obtains $-\alpha_e$ and Player II obtains $\beta_e.$ For this game the payoff matrices are weighted incidence matrices of the graph $G.$ We show that when the graph is acyclic, Player I has a unique strategy in any equilibrium. At this strategy, every vertex is chosen with a probability that is proportional to the maximum length over all directed paths originating from that vertex. Defining the path matrix of the graph, it is shown that the set of all equilibrium strategies of Player II is the convex hull of the column vectors of the path matrix. This work extends earlier results of Bapat and Tijs (1997) for zero-sum games. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.13001 |
| By: | Robert P. Gilles |
| Abstract: | Monderer and Shapley (1996) showed that a game is a potential game precisely when the players' second-order cross-differences agree pair by pair. This paper asks what can be built from them when the agreement fails. The resulting MS-potential, assembled from their common-interest part, is unique up to separable payoff terms and exists precisely when a higher-order MS-condition holds; on exact potential games it recovers the potential up to the players' main effects. A least-squares construction extends the MS-potential to all finite games and induces the \MS-decomposition: every game splits into a common-interest MS-potential game and a residual absorbing every player's individualistic effects. Everything read off the second differences is invariant under the transformations that leave strategic content untouched, relabelling, non-strategic translation and action duplication, where the CMOP decomposition is not; only the least-squares extension fails, since it averages and centres. The central result is an identity: when all players have equally many actions, an augmentation of the MS-potential coincides, up to the additive constant, with the potential of Candogan et al. (2011). If action counts are unequal they diverge, and no bound on that divergence is established here. Both rest on the same uniform weighting of the players' actions. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.01967 |
| By: | Gregorio Curello; Sam Jindani |
| Abstract: | We consider the problem of bargaining when transfers between agents are possible. Such situations are typically modelled as coalitional games with transferable utilities. However this model makes a strong implicit assumption: the outcome can only depend on the total surplus that each coalition of agents can achieve, not on which agents within the coalition generate the surplus. Is this assumption justified? We define a richer model in which solutions may depend on who generates the surplus. In this model, the classical axiomatisation of the Shapley value fails: a broad family of solutions satisfy efficiency, anonymity, the dummy property, and additivity. Nevertheless, we obtain an axiomatisation of the Shapley value in the richer model by adding continuity and individual rationality to the original axioms. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.09232 |
| By: | Daiki Kishishita |
| Abstract: | This paper studies an electoral competition model in which parties maximize legislative power rather than vote shares. Voters are uniformly distributed on the unit interval and vote for the party proposing the closest policy platform. After the election, parties form coalitions through a communication network arising from ideological proximity: two parties are directly linked if their policy distance is at most $d$. A party's objective is its Myerson value in the resulting graph-restricted voting game. I characterize symmetric pure-strategy equilibria in two-, three-, and four-party systems. The two-party case yields convergence to the median. The three-party case admits a continuum of symmetric equilibria in which the two extreme parties are directly linked. In the four-party case, the unique symmetric equilibrium places two parties at $(1-d)/2$ and two parties at $(1+d)/2$. In both three- and four-party systems, more restrictive coalition communication, represented by a smaller $d$, generates a centripetal force, and the median voter theorem holds in the limit despite the multiparty setting. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.27996 |
| By: | Wataru Kitano; Shohei Yanagita |
| Abstract: | We develop an axiomatic model of robust Bayesian persuasion where the sender cannot fully control the information available to the receiver. After selecting an information structure, the sender expects that more informative structures might be implemented. We model this by allowing the sender to assess each information structure under worst-case information leakage, represented by a set of more informative structures. The model encompasses a wide range of examples of information leakage, which we also explore. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.14017 |
| By: | Shuyang Zhang; Xiangtian Li |
| Abstract: | As an extension of existing Bayesian persuasion framework with inadequate message mechanism, we study direct recommendation when a sender is bound by an installed information policy only with probability $\rho$, the realization of binding is hidden, and the receiver does not observe the persistent structural environment. The receiver first sees a payoff-neutral, nonmanipulable calibration sample and then faces a fresh, non-certified deployment interaction. In common, the calibration law identifies only the receiver-facing reduced form, not the latent binding and discretionary kernels. We characterize type-wise $\rho$-implementability, construct the receiver's posterior over the full deployment node, and prove a static direct-following implementation theorem. After every calibration history that passes a posterior-predictive obedience test, the deployment assessment is an exact perfect Bayesian equilibrium: Bayes consistency, receiver sequential rationality, sender sequential rationality, and off-path completion are all verified. Under finite-type separation, common recommendation support, and a positive obedience margin, the test activates such an equilibrium with high probability. Our results keep statistical failure probability distinct from equilibrium approximation. Finally, we embed the original robust value frontier, support-wise linear-programming algorithm, and binary-action fractional-knapsack specialization into this implementation framework |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.20766 |
| By: | Sangjun Yea (Korea Institute for International Economic Policy); Daeyoung Jeong (Yonsei University) |
| Abstract: | We study Bayesian persuasion with source uncertainty: a receiver observes one message but cannot tell whether it came from a related news sender, who commands an informative technology, or a fake news sender, whose signals are state-independent. Using a Rothschild-Stiglitz approach, we characterize equilibrium and identify the threshold prominence at which fake news becomes persuasive. Prominent fake news dilutes informative signals, but a sufficiently credible sender preserves influence by raising precision. This self-disciplining effect raises welfare: paradoxically, within the persuasive regime, greater prominence of fake news improves the informational environment and leaves voters better informed ex-ante. |
| Keywords: | Fake News, Social Media, Bayesian Persuasion, Sequential Persuasion |
| JEL: | D72 D82 D83 L82 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2026rwp-295 |
| By: | Michael Greinecker; Patrick Lahr; Christoph Schwerdtfeger |
| Abstract: | Aumann (1974) showed that an atomless public randomization device makes the feasible- and equilibrium-payoff sets of a game with a fixed information structure convex, and asked whether they are closed. We show that, in every case the question leaves open, they need not be. One information structure drives all the examples: two sequences of fair signs whose coordinate correlations increase to a ceiling $\rho |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.01515 |
| By: | Paramahansa Pramanik; Michael Bowdin |
| Abstract: | We study dynamic physical hedging for insurers exposed jointly to catastrophe losses and stochastic reconstruction costs. Surplus evolves as a controlled jump diffusion whose loss amplitude combines marked catastrophe severity, an exogenous mean-reverting cost factor, and endogenous mitigation. We establish well-posedness, moment and stability estimates, and a stopping-time dynamic programming principle, and prove that the value function is the unique viscosity solution of the resulting nonlocal Hamilton-Jacobi-Bellman (HJB) equation Strategic interaction is introduced through a mean field game (MFG) with reduced-form vulnerability costs, yielding a coupled backward-forward HJB-Kolmogorov system. We establish relaxed equilibrium existence, Markovian realization, and uniqueness under appropriate compactness and monotonicity conditions. Numerical experiments show that reconstruction costs and capitalization materially affect optimal hedging and that cross-sectional vulnerability alters equilibrium costs. Tail-family robustness calculations further assess the sensitivity of these conclusions to alternative catastrophe-severity specifications. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.13745 |
| By: | Grega Smrkolj (Newcastle University); Florian Wagener (University of Amsterdam) |
| Abstract: | We study a continuous-time duopoly model of process innovation with R&D spillovers, comparing noncooperative R&D with cooperative research regimes. We extend the standard constant-spillover framework by allowing knowledge transmission to decay with technological distance and to favor followers over leaders in asymmetric specifications. In a global Markov-perfect model, firms may invest before production is viable, enter or exit production as costs evolve, and converge to no-market, monopoly, or duopoly outcomes. State-dependent spillovers change R&D incentives, catch-up dynamics, long-run market structure, and the welfare effects of research cooperation. In the computed equilibria, more follower-favoring spillovers weaken the leader's private incentive to invest but accelerate catch-up, shorten monopoly phases, and make eventual duopoly more likely. When spillovers are weak, cooperation mainly softens dynamic rivalry; when information sharing is substantial, cooperation expands market formation, lowers long-run costs, and can raise both consumer and total surplus, especially under the research-joint-venture regime. The value of R&D cooperation depends on the direction and persistence of knowledge flows, not only on their average intensity. |
| JEL: | C73 D43 O31 |
| Date: | 2026–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260041 |
| By: | Ari Ercole |
| Abstract: | Persistent whistleblowing failure in hierarchical healthcare organisations is typically attributed to insufficient legal protection for reporters or inadequate managerial incentives to investigate. This diagnosis is argued to be structurally incomplete. A repeated three-player game among a whistleblower, Trust management, and a colleague group is solved via global games techniques to obtain a unique equilibrium, identifying three mechanisms existing policy neither recognises nor addresses. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.19014 |
| By: | Marty Haoyuan Chen; Ginger Zhe Jin |
| Abstract: | We study voluntary disclosure when partially naive receivers observe a public signal correlated with the sender’s private information. We develop a framework in which the public signal changes how receivers interpret silence, and derive a closed-form disclosure threshold nesting classical unraveling. A laboratory experiment varying the correlation confirms our predictions: disclosure decreases as the signal becomes more favorable, and receiver guesses upon nondisclosure rise toward it. The public signal can crowd out disclosure, leaving receivers less informed than without it. This informational loss peaks at intermediate correlation, where the signal shifts beliefs yet remains too noisy to substitute for disclosure. |
| JEL: | C91 D82 D83 D91 L15 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35625 |
| By: | Sanyyam Khurana (Ashoka University) |
| Abstract: | Consider a finite set of potential bidders for the sale of an indivisible object where every bidder has an outside option. Bidders have private information about the object’s value and their outside option which are drawn from two different probability distributions. Every bidder participates in the auction if and only if their value for the object is larger than their outside option, which leads to uncertain number of participants. The seller imposes a floor on the number of participating bidders in order to conduct an auction. If the floor is not met, the auction is canceled. We show that if either the value distribution is strengthened or the outside option distribution is weakened, the bidders raise their bids. We also show that the bidders raise their bids due to the imposition of a floor. |
| Date: | 2026–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:168 |
| By: | Grzegorz Jamr\'oz |
| Abstract: | Inspired by possible future markets of autonomous routing and driving (ARAD), we introduce competitive mediator games and their equilibria which generalize the (coarse) correlated equilibria, which have become a popular research area recently as they not only can be more socially efficient than Nash equilibria but also are limits of algorithmic no-regret multi-agent learning dynamics. We discuss the basic properties of competitive mediator games and prove that in the generic setting of anonymous congestion(routing) games with market-share maximizing mediators all competitive mediator equilibria are monopolies whenever one of the mediators is weakly preferred to other mediators by all users. We apply and interpret these results in the context of new markets of competing ARAD service providers. We also provide a comprehensive overview of these markets and discuss the future mechanism design thereof. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.09894 |
| By: | Lee, Woongki (Yonsei University) |
| Abstract: | We analyze strategic interaction among investors by distinguishing between price taking and price setting. The analysis shows that as price setting becomes more prevalent, equilibrium prices fall. Because this lower price benefits price takers as well as price setters, price taking can be understood as free riding on price setting. The gains from the lower price are distributed more heavily toward price takers. This asymmetry creates relative-comparison concerns, which can distort incentives and discourage price setting even when it would increase aggregate utility. We examine this problem through a pricing game and derive implications for strategic behavior and equilibrium outcomes. |
| Date: | 2026–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:64nxu_v1 |
| By: | Barkley, Aaron; Genesove, David; Hansen, James |
| Abstract: | This paper concerns how trade mechanism choice affects how decentralized markets respond to shocks and policy choices. We consider this issue in the context of housing market search. We pose a dynamic search model in which agents can trade by auction or negotiation, both featuring two-sided incomplete information. We apply the model to housing data, estimating buyer and seller value distributions using a structural auction model, primitives that are used in solving for the search model equilibrium. Adding auctions as a second mechanism dampens the shock response of prices and values as agents optimally switch between mechanisms. We also find that policies that increase seller information disclosure at one mechanism can nonetheless benefit sellers and harm buyers, at odds with their intended purpose. Our estimates also highlight how mechanism efficiency assumptions influence search cost inference, with estimated seller negotiation search costs significantly lower under Nash bargaining than incomplete information. |
| Keywords: | Auctions; Price determination |
| JEL: | C78 D44 D47 D83 R21 R31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19262 |
| By: | Deng, Shanglyu; Jia, Dun; Leccese, Mario; Sweeting, Andrew |
| Abstract: | Industries with significant scale economies or learning-by-doing may come to be dominated by a single firm. Economists have studied how likely this is to happen, and whether it is efficient, using models where buyers are price or quantity takers, even though these industries are often also characterized by buyer-seller negotiations. We extend the dynamic “learning-by-doing and forgetting†model of Besanko, Doraszelski, Kryukov, and Satterthwaite (2010) to allow for Nash-in-Nash bargaining over prices. Price-taking and the social planner solution are captured as special cases. We show that sellers' dynamic incentives, market concentration and welfare can change sharply, and non-monotonically, as one moves away from the price-taking assumption. We study the implications of buyer bargaining power for the existence of multiple equilibria, the design of subsidy policies and the welfare effects of policies designed to increase competition. |
| JEL: | C73 D21 D43 L13 L41 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19241 |
| By: | Matteo Marsili |
| Abstract: | This note discusses zero-sum games with open-ended innovation, whereby each player may introduce new strategies. The innovation process is modelled as a draw of new strategies form a distribution. It is argued that, under generic conditions, this setting can lead to an everlasting innovation arm race, because the introduction of new technologies of one player increases the marginal utility for technological innovation of the opponent. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.25677 |
| By: | Hattori, Keisuke |
| Abstract: | Does unequal bargaining power within a team help or hurt its performance? We show that the answer depends on enforceability. Two members who differ only in bargaining power bargain once over a stationary workload allocation for an ongoing production relationship. When negotiated workloads are externally enforced, greater bargaining asymmetry raises team performance. When the agreement must instead be self-enforcing, sufficiently large asymmetry makes the weaker bargainer's workload unsustainable. Restoring her incentive to cooperate contracts both members' efforts and can reduce performance below the equal-power level. Bargaining power therefore has no institution-free performance effect. This reversal is robust to effort complementarity. |
| Keywords: | Bargaining, Team production, Self-enforcing agreements, Workload allocation, Relational contracts |
| JEL: | C78 D23 D86 L23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:342595 |
| By: | Shinpei Noguchi; Hiroto Sato; Konan Shimizu |
| Abstract: | This paper studies how network structures affect the efficiency of information aggregation in social learning environments. We consider a model in which rational agents sequentially choose actions based on private signals and observations of their neighbors' actions in a network. Focusing on comparisons of expected payoffs at a given finite period, we show that there exists an information structure under which the star network achieves a strictly higher expected payoff than any other network, and another information structure under which the complete network achieves a strictly higher expected payoff than any other network. Taken together, these results imply that no network is uniformly optimal across all information structures. Our analysis highlights a trade-off between the responsiveness effect and the overturning effect: disconnected networks preserve responsiveness of actions to private signals, whereas highly connected networks facilitate the aggregation of extreme information that overturns public beliefs. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.28921 |
| By: | Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tione, Sarah (Centre for Land Tenure Studies, Norwegian University of Life Sciences) |
| Abstract: | We study how trust and trustworthiness respond to social distance and how beliefs, norms, and cognitive precision shape social exchange in a field experiment with irrigation farmers. Using a standard trust game with within-subject variation in social-distance framing, we distinguish interactions with an anonymous partner from the same irrigation block from interactions with a partner from another scheme within the same district. In addition to trust and reciprocal behavior, we elicit beliefs about expected returns, stated moral obligations to reciprocate, risk preferences, and decision precision measured through consistency in multiple price list choices. <p> The results reveal a clear asymmetry between trust and trustworthiness. Changes in trust across social-distance framings are primarily driven by changes in beliefs, whereas trustworthiness is more strongly associated with normative commitments and exhibits greater behavioral stability across contexts. Cognitive precision is positively related to baseline levels of trust but is associated with smaller framing-induced changes in trustworthiness, consistent with an interpretation of precision as stabilizing behavior rather than uniformly increasing prosociality. Risk preferences play a limited role once beliefs are taken into account.<p>By separating trust from trustworthiness and by distinguishing between behavioral levels and framing-induced changes, the paper provides new field evidence on the mechanisms underlying social exchange. The findings highlight the importance of beliefs for trusting behavior, norms for reciprocal behavior, and decision precision for the consistency of social decisions across contexts. |
| Keywords: | Social distance; Beliefs; Norms; Decision precision; Trust; Trustworthiness |
| JEL: | C92 C93 D01 D91 |
| Date: | 2026–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nlsclt:2026_007 |
| By: | Bayer, Péter; Mágó, Mánuel László |
| Abstract: | We introduce participation uncertainty to the theory of cooperative TUgames. Under participation uncertainty, each coalition’s effective value is an expected value taken over the (full) value of its subsets. We identify ‘constant-marginal’ participation as a key property for various economic problems to be well-behaved. This class of uncertainty environments is closed for mixing and composition. Under this property, solution concepts are easily calculate, two-sided markets clear and are insurable, and voting power under uncertain participation can be characterized and efficiently computed. |
| Keywords: | cooperative games, participation uncertainty, matching markets, voting power, overselling |
| JEL: | C71 C72 D51 D72 D81 |
| Date: | 2026–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:cvh:coecwp:2026/02 |
| By: | Drew Fudenberg; Andrew Koh |
| Abstract: | We study R&D competition in the shadow of disaster: advancing the technology frontier raises the risk of permanently ending all firms' payoffs. Under perfect monitoring and common knowledge of rationality, the equilibrium frontier is bounded below by the optimal stopping time of a monopolist, and above by that of a representative firm that persistently but mistakenly believes its rival is about to stop. We then analyze how the frontier is shaped by transparency (speed of monitoring) and trust (belief in the rationality of rival firms). |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.27638 |
| By: | Takashi Kunimoto (School of Economics, Singapore Management University); Cuiling Zhang (School of Economics, Singapore Management University) |
| Abstract: | We identify the ex ante welfare (EAW) condition as a necessary requirement to implement ex post efficient bilateral trade in any finite type space with interdependent values and correlated beliefs. As these finite settings become finer to approximate a continuous type space, we derive a limit EAW condition by taking the EAW condition in finite settings to its limit. We show that this limit condition trivially holds in the benchmark continuous setting admitting a full-support density function. We then insist on locally robust implementation by requiring efficient trade to be implemented uniformly across all finite type spaces that approximate the benchmark continuous type space. Our main result shows that under high interdependence, locally robust implementation of efficient trade is impossible. We thus show that the negative results of Myerson and Satterthwaite (1983) and Fieseler, Kittsteiner, and Moldovanu (2003) under independent beliefs can also emerge as the robust limit of discrete environments even when beliefs are correlated. |
| Keywords: | bilateral trade; the ex ante welfare condition; interdependence; correlation. |
| JEL: | C72 D78 D82 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:smuesw:023538 |
| By: | Wataru Kitano; Shohei Yanagita |
| Abstract: | We formulate the voter's strategic information acquisition to control the future self's action as a Bayesian persuasion problem. Our main result shows that acquiring information that is irrelevant to the voter's objective can be a worst-case optimal solution: it can reduce the possibility that the future self is swayed by additional information whose content is ambiguous to the current voter. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.14173 |
| By: | Francesco Capozza |
| Abstract: | Coups are launched, not drawn. A plotting core moves at the first moment its prospects justify the risk of hanging, so the observed success rate of coups measures the plotters’ own risk–reward ratio rather than anything about the regimes they attack — which is why it sits near one-half, why it barely moves as attempt rates collapse, and why it is highest for the actors with the least firepower. I develop a model of coups as an elite coordination problem in which pivotal weight is produced from arms, command, and proximity, so numbers have zero marginal product and a mass mob is not a small coup. Because losers are purged, fence-sitters pre-empt rather than free-ride, and a reputation for savagery is an asset in the fight for the state — but only up to a point. Purging is costly to the purger, so anticipated vindictiveness helps a coup only while its marginal cost is low; past that, a junta feared enough is a junta not worth joining, and at the limit coup risk vanishes entirely because the state has become worthless. Terror is a coup-proofing technology whose price is the state. Dispersion, by contrast, is free: indiscriminate terror topples regimes, selective terror protects them. |
| Keywords: | coups, purges, global games |
| JEL: | C72 C73 D72 D74 F51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12889 |
| By: | Mojtaba Eslami |
| Abstract: | Modern agentic AI systems combine multiple large language model agents with heterogeneous skills, yet most architectures either fix communication in advance or allow full broadcast. Both can be inefficient because token cost, latency, redundancy, and error propagation increase with the number of active agents and communication links. We model agent selection and communication as a cooperative game with task-conditioned net utility $U(C\mid x)=V(C\mid x)-\sum_{i\in C}c_i$, separating coalition-level costs from agent activation costs. We propose a marginal-value activation rule and greedy router, extend the model to optimize communication edges with per-edge costs, and use estimated Shapley values to predict which agents are worth contacting before and during execution. We connect the problem to submodular maximization and prove two limited guarantees: a curvature-refined bound for a monotone, cardinality-constrained special case, and a tight $1/2$-approximation, with a correction for signed objectives, for an unconstrained non-monotone case via double greedy. Neither guarantee applies directly to the main router, which remains a heuristic. We also prove a Shapley-submodularity sandwich bound linking the error of marginal-value routing to a per-agent diminishing-returns quantity. In synthetic experiments, greedy routing achieves $99.5%$ of brute-force-optimal utility while activating $1.96$ of $8$ agents on average, compared with $38.8%$ for full broadcast. Performance is robust to activation cost and redundancy weight but falls to $66%$ under strong violations of submodularity or noisy value estimates. We distinguish the framework from Shapley pricing, hedonic coalition formation, and communication-graph pruning, and propose evaluation on real multi-agent LLM benchmarks. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.07532 |
| By: | Martin Obradovits; Markus Walzl |
| Abstract: | Consumers increasingly care about the environmental and social responsibility of the production processes used by firms, yet these processes often remain unobservable, even after consumption. We develop a simple model in which firms select either a green or a brown production technology before competing and signaling through prices. Firms observe each other's production choices, while consumers observe only prices. We show that, in the payoff-dominant equilibrium, prices signal when at least one firm produces green, avoiding Bertrand competition. Counterintuitively, raising consumers' environmental concerns or eliminating the information asymmetry may discourage green production and reduce welfare. |
| Keywords: | sustainable production, endogenous technology choice, price signaling, asymmetric information, price competition, label credence goods |
| JEL: | D82 D83 L13 L15 Q58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:jku:econwp:2026-05 |
| By: | Francesca Arduini (Institute for Fiscal Studies) |
| Date: | 2026–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:26/47 |
| By: | Athanasios Andrikopoulos; Nikolaos Sampanis |
| Abstract: | The theory of optimal choice sets provides a well-established framework in social choice and game theory. When preferences are cyclic, as often occurs in complex economic environments, the set of maximal elements may be empty, thereby motivating alternative solution concepts such as the von Neumann--Morgenstern (vNM) stable set. In this paper, we study binary relations on infinite sets of alternatives within an order-theoretic and topological framework. Our main result yields a topological characterization of von Neumann--Morgenstern stable maximality: for consistent abstract decision problems satisfying Upper MacNeille Informational Monotonicity, the set of maximal elements is non-empty and stable if and only if there exists a compact topology on \(X\) with respect to which \(R\) is Nachbin closed and upper semicontinuous. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.26559 |
| By: | Zhang Xu; Mingsheng Zhang; Wei Zhao |
| Abstract: | In this note, we show that equilibrium profit is zero in Bertrand competition with a finite number of firms and consumers whose willingness to pay are bounded, under any market segmentation profile. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.07918 |