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on Game Theory |
| By: | Steven A. Matthews (Department of Economics, University of Pennsylvania) |
| Abstract: | A monotone game is a multistage game in which no player can lower her action in any period below its previous level. A motivation for the monotone games of this paper is dynamic voluntary contribution to a public project. Each player's utility is a strictly concave function of the public good, and quasilinear in the private good. The main result is a description of the limit points of (subgame perfect) equilibrium paths as the period length shrinks. The limiting set of such profiles is equal to the undercore of the underlying static game - the set of profiles that cannot be blocked by a coalition using a smaller profile. A corollary is that the limiting set of achievable profiles does not depend on whether the players can move simultaneously or only in a round-robin fashion. The familiar core is the efficient subset of the undercore; hence, some but not all profiles that are efficient and individually rational can be nearly achieved when the period length is small. As the period length shrinks, any core profile can be achieved in a “twinkling of the eye” - neither real-time gradualism nor inefficiency are necessary. |
| Keywords: | dynamic games, monotone games, core, public goods, voluntary contribution, gradualism |
| JEL: | C7 |
| Date: | 2006–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:06-018&r=gth |
| By: | Sebastian Kranz |
| Abstract: | This paper analyses competition of moral norms and institutions in a society where a fixed share of people unconditionally complies with norms and the remaining people act selfishly. Whether a person is a norm-complier or selfish is private knowledge. A model of voting-by-feet shows that those norms and institutions arise that maximize expected utility of norm-compliers, taken into account selfish players' behavior. Such complier optimal norms lead to a simple behavioral model that, when combined with preferences for equitable outcomes, is in line with the relevant stylized facts from a wide range of economic experiments, like reciprocal behavior, costly punishment, the role of intentions, giving in dictator games and concerns for social efficiency. The paper contributes to the literature on voting-by-feet, institutional design, ethics and social preferences. |
| Keywords: | moral norms, social preferences, fairness, reciprocity, rule utilitarianism, voting-by-feet, farsighted-stability, cultural evolution, golden rule, social norms |
| JEL: | A13 C7 D02 D63 D64 D71 D8 Z13 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse11_2006&r=gth |
| By: | CRÉMER, Jacques; SPIEGEL, Yossi; ZHENG, Charles |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:5301&r=gth |
| By: | Paulo Klinger Monteiro (EPGE/FGV) |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:616&r=gth |