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on Game Theory |
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Issue of 2012‒07‒01
five papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University |
| By: | Duersch, Peter; Oechssler, Jörg; Schipper, Burkhard C. |
| Abstract: | We show that in symmetric two-player exact potential games, the simple decision rule "imitate-if-better" cannot be beaten by any strategy in a repeated game by more than the maximal payoff difference of the one-period game. Our results apply to many interesting games including examples like 2x2 games, Cournot duopoly, price competition, public goods games, common pool resource games, and minimum effort coordination games. |
| Keywords: | Imitate-the-best; learning; exact potential games; symmetric games; relative payoffs; zero-sum games |
| JEL: | D43 C73 C72 |
| Date: | 2012–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0529&r=gth |
| By: | Fabrizio Germano; Peio Zuazo-Garin |
| Abstract: | We extend Aumann's theorem [Aumann, 1987] deriving correlated equilibria as a consequence of common priors and common knowledge of rationality by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker notion, joint p-belief of rationality, where agents believe the other agents are rational with probability p or more. We show that behavior in this case constitutes a constrained correlated equilibrium of a doubled game satisfying certain p-belief constraints and characterize the topological structure of the resulting set of p-rational outcomes. We establish continuity in the parameter p and show that, for p sufficiently close to one, the p-rational outcomes are close to the correlated equilibria and, with high probability, supported on strategies that survive the iterated elimination of strictly dominated strategies. Finally, we extend Aumann and Dreze's theorem [Aumann and Dreze, 2008] on rational expectations of interim types to the broader p-rational belief systems, and also discuss the case of non-common priors. |
| Keywords: | correlated equilibrium, approximate common knowledge, bounded rationality, p-rational belief system, common prior, information, noncooperative game |
| JEL: | C72 D82 D83 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1326&r=gth |
| By: | Benito Arruñada; Marco Casari; Francesca Pancotto |
| Abstract: | Through an experiment, we investigate how the level of rationality relates to concerns for equality and efficiency. Subjects perform dictator games and a guessing game. More rational subjects are not more frequently of the selfregarding type. When performing a comparison within the same degree of rationality, self-regarding subjects show more strategic sophistication than other subjects. |
| Keywords: | steps of reasoning, other-regarding preferences |
| JEL: | C91 C92 D63 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1306&r=gth |
| By: | Marie-Laure Cabon-Dhersin (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - Université de Rouen : EA4702); Nicolas Drouhin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne) |
| Abstract: | This paper analyses price competition in the case of two firms operating under constant returns to scale with more than one production factor. Factors are chosen sequentially in a two-stage game generating a soft capacity constraint and implying a convex short term cost function in the second stage of the game. We show that tacit collusion is the only predictable result of the whole game i.e. the unique payoff-dominant pure strategy Nash equilibrium. Technically, this paper bridges the capacity constraint literature on price competition and that of the convex cost function. |
| Keywords: | price competition; tacit collusion; convex cost; Bertrand Paradox; capacity constraint |
| Date: | 2012–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00709093&r=gth |
| By: | Engwerda, J.C. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: In this note we sketch a dynamic framework within which the discussion on the macro economic effects of climate change take place. The problem setting is characterized by scientific uncertainties about the development of climate, potential large economic losses and human beings having their specific features. Some considerations about climate change, macroeconomics and their relationship are given. A characteristic feature of the problem setting is that there are multiple decision makers interacting in a dynamic world with large uncertainties. Problems of this type have been studied extensively by (dynamic) game theory. A rough literature review is provided and some items open for future research are indicated. |
| Keywords: | Climate change;environmental change;macro-economic effects;dynamic games. |
| JEL: | C7 D6 D8 E6 F I3 O44 Q |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012045&r=gth |