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on Game Theory |
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Issue of 2013‒06‒16
seventeen papers chosen by Laszlo A. Koczy Hungarian Academy of Sciences and Obuda University |
| By: | Heinrich H. Nax (Paris School of Economics); Bary S. R. Pradelski (University of Oxford, Oxford-Man Institute); H. Peyton Young (University of Oxford) |
| Abstract: | Decentralized matching markets on the internet allow large numbers of agents to interact anonymously at virtually no cost. Very little information is available to market participants and trade takes place at many different prices simultaneously. We propose a decentralized, completely uncoupled learning process in such environments that leads to stable and efficient outcomes. Agents on each side of the market make bids for potential partners and are matched if their bids are mutually profitable. Matched agents occasionally experiment with higher bids if on the buy-side (or lower bids if on the sell-side), while single agents, in the hope of attracting partners, lower their bids if on the buy-side (or raise their bids if on the sell-side). This simple and intuitive learning process implements core allocations even though agents have no knowledge of other agents' strategies, payoffs, or the structure of the game, and there is no central authority with such knowledge either. |
| Keywords: | Assignment Games, Cooperative Games, Core, Evolutionary Game Theory, Learning, Matching Markets |
| JEL: | C71 C73 C78 D83 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.50&r=gth |
| By: | Osório Costa, Antonio Miguel |
| Abstract: | In this paper we relax the Colonel Blotto game assumption that for a given battle the player who allocates the higher measure of resources wins that battle. We assume that for a given battle, the Colonel who allocates the higher measure of resources is more likely to win that battle. We have a simpler model for which we are able to compute all Nash equilibria in pure strategies for any valuations pro le that players might have. Something that is not possible for the original Blotto game. JEL: C72, D74, H56. KEYWORDS: Colonel Blotto game; lottery contest function. |
| Keywords: | Jocs no-cooperatius (Matemàtica), Gestió de conflictes, Seguretat nacional, 33 - Economia, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/211806&r=gth |
| By: | Francesco De Sinopoli (University of Verona); Giovanna Iannantuoni (University of Milano-Bicocca); Carlos Pimienta (University of New South Wales) |
| Abstract: | We prove two results on the generic determinacy of Nash equilibrium in voting games. The first one is for negative plurality games. The second one is for approval games under the condition that the number of candidates is equal to three. These results are combined with the analogous one obtained in De Sinopoli (2001) for plurality rule to show that, for generic utilities, three of the most well-known scoring rules, plurality, negative plurality and approval, induce finite sets of equilibrium outcomes in their corresponding derived games—at least when the number of candidates is equal to three. This is a necessary requirement for the development of a systematic comparison amongst these three voting rules and a useful aid to compute the stable sets of equilibria (Mertens, 1989) of the induced voting games. To conclude, we provide some examples of voting environments with three candidates where we carry out this this comparison. |
| Keywords: | Approval voting, Plurality voting, Negative plurality, Sophisticated voting, Mertens Stability |
| JEL: | C72 D72 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2012-40&r=gth |
| By: | Sergio Currarini (University of Leicester, Universita' di Venezia, Euro-Mediterranean Center on Climate Change, CIP Division and FEEM); Francesco Feri (Royal Holloway, University of London) |
| Abstract: | We study the bilateral exchange of information in the context of linear quadratic games. An information structure is here represented by a non directed network, whose nodes are agents and whose links represent sharing agreements. We first study the equilibrium use of information in any given sharing network, finding that the extent to which a piece of information is "public" affects the equilibrium use of it, in line with previous results in the literature. We then study the incentives to share information ex-ante, highlighting the role of the elasticity of payoffs to the equilibrium volatility of one's own strategy and of one's opponents' strategies. For the case of uncorrelated signals we fully characterize pairwise stable networks for the general linear quadratic game. For the case of correlated signals, we study pair-wise stable networks for three specific linear quadratic games - Cournot oligopoly, Keynes’ beauty contest and Public good provision - in which strategies are substitute, complement and orthogonal, respectively. We show that signals’ correlation favors the transmission of information, but may also prevent all information from being transmitted. |
| Keywords: | Information Sharing, Networks, Bayesian Equilibrium, Beauty Contest, Oligopoly |
| JEL: | D43 D82 D85 L13 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.47&r=gth |
| By: | Martin Shubik (Cowles Foundation, Yale University) |
| Abstract: | This essay considers the potential for utilizing web games for research and teaching. It discusses a specific gaming facility that has been constructed and utilized. The gaming facility can be made available for use for those interested in utilizing it for teaching and/or research purposes. The goal is to have this facility be of use for both single play and repeated matrix games. Much of the discussion here is aimed at single play games as a desirable benchmark preliminary to the study of repeated games. Properties of the one stage games are discussed and instructions for the use of the system are supplied. Extensions to multistage games and incomplete information are noted. |
| Keywords: | Matrix games, Experimental, Teaching and computerized games |
| JEL: | C7 C9 D03 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1860r&r=gth |
| By: | Giménez-Gómez, José-Manuel (Universitat Rovira i Virgili); Osorio, Antonio (Universitat Rovira i Virgili); Peris, Josep Enric (Universitat d'Alacant) |
| Abstract: | Is it important to negotiate on proportions rather than on numbers? To answer this question, we analyze the behavior of well-known bargaining solutions and the claims rules they induce when they are applied to a "proportionally transformed" bargaining set SP so-called bargaining-in-proportions set. The idea of applying bargaining solutions to claims problems was already developed in Dagan and Volij (1993). They apply the bargaining solutions over a bargaining set that is the one de ned by the claims and the endowment. A comparison among our results and theirs is provided. |
| Keywords: | Bargaining problem; Claims problem; Proportional Constrained Equal Awards; Constrained Equal Losses; Nash bargaining solution |
| JEL: | C71 D63 D71 |
| Date: | 2013–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:qmetal:2013_002&r=gth |
| By: | Peter Coles (Harvard Business School); Ran Shorrer (Harvard University and Harvard Business School) |
| Abstract: | Since no stable matching mechanism can induce truth-telling as a dominant strategy for all participants, there is often room in matching markets for strategic misrepresentation (Roth [25]). In this paper we study a natural form of strategic misrepresentation: reporting a truncation of one's true preference list. Roth and Rothblum [28] prove an important but abstract result: in certain symmetric, incomplete information settings, agents on one side of the market (“the women”) optimally submit some truncation of their true preference lists. In this paper we put structure on this truncation, both in symmetric and general settings, when agents must submit preference lists to the Men-Proposing Deferred Acceptance Algorithm. We first characterize each woman's truncation payoffs in an incomplete information setting in terms of the distribution of her achievable mates. The optimal degree of truncation can be substantial: we prove that in a uniform setting, the optimal degree of truncation for an individual woman goes to 100% of her list as the market size grows large, when other women are truthful. In this setting, we demonstrate the existence of an equilibrium where all agents use truncation strategies. Compared to truthful reporting, in any equilibrium in truncation strategies, welfare diverges for men and women: women prefer the truncation equilibrium, while men would prefer that participants truthfully report. In a general environment, we show that the less risk averse a player, the greater the degree of her optimal truncation. Finally, when correlation in preferences increases, players should truncate less. While several recent papers have focused on the limits of strategic manipulation, our results serve as a reminder that without the pre-conditions ensuring truthful reporting, even in settings where agents have little information, the potential for manipulation can be significant. |
| Keywords: | Matching Markets, Truncation |
| JEL: | C78 C62 D61 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.49&r=gth |
| By: | Adrien Nguyen Huu (FiME Lab - Laboratoire de Finance des Marchés d'Energie - Université Paris IX - Paris Dauphine - CREST - EDF R&D, Department of Mathematics and Statistics - McMaster University) |
| Abstract: | We formalize the randomization procedure undertaken to discriminate players in real option games with Stackelberg leadership advantage. This is done by introducing a random arbitrator with specific parameterizations, and allows to propose a unified treatment of both Cournot and Stackelberg competition in real option games. We extend the study to a partial arbitrator, which leads to competitive advantages in various asymmetrical situations. We fully characterize strategic interactions. We then apply the procedure to risk-neutral and risk-averse firms in a stochastic preemptive real option game in complete market under regulation. The risk-averse case gives us the opportunity to study a new phenomenon we call aversion for confrontation, and its impact on the asymmetrical game. |
| Keywords: | real option game; timing game; regulator; asymmetry; Stackelberg competition; Cournot competition |
| Date: | 2013–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00831263&r=gth |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Alexandre Skoda (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | The paper aims at generalizing the notion of restricted game on a communication graph, introduced by Myerson. We consider communication graphs with weighted edges, and we define arbitrary ways of partitioning any subset of a graph, which we call correspondences. A particularly useful way to partition a graph is obtained by computing the strength of the graph. The strength of a graph is a measure introduced in graph theory to evaluate the resistance of networks under attacks, and it provides a natural partition of the graph (called the Gusfield correspondence) into resistant components. We perform a general study of the inheritance of superadditivity and convexity for the restricted game associated with a given correspondence. Our main result is to give for cycle-free graphs necessary and sufficient conditions for the inheritance of convexity of the restricted game associated with the Gusfield correspondence. |
| Date: | 2012–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00830291&r=gth |
| By: | Ziv Hellman; Yehuda (John) Levy |
| Abstract: | Negative results on the the existence of Bayesian equilibria when state spaces have the cardinality of the continuum have been attained in recent years. This has led to the natural question: are there conditions that characterise when Bayesian games over continuum state spaces have measurable Bayesian equilibria? We answer this in the affirmative. Assuming that each type has finite or countable support, measurable Bayesian equilibria may fail to exist if and only if the underlying common knowledge $\sigma$-algebra is non-separable. Furthermore, anomalous examples with continuum state spaces have been presented in the literature in which common priors exist over entire state spaces but not over common knowledge components. There are also spaces over which players can have no disagreement, but when restricting attention to common knowledge components disagreements can exist. We show that when the common knowledge $\sigma$-algebra is separable all these anomalies disappear. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp641&r=gth |
| By: | Manuel Förster (Université Paris 1 Panthéon-Sorbonne, France, Université catholique de Louvain – CORE, Belgium); Michel Grabisch (Paris School of Economics – Université Paris 1 Panthéon-Sorbonne, France); Agnieszka Rusinowsk (Paris School of Economics – CNRS Centre d’Économie de la Sorbonne, France) |
| Abstract: | We study a stochastic model of influence where agents have “yes” or “no” inclinations on some issue, and opinions may change due to mutual influence among the agents. Each agent independently aggregates the opinions of the other agents and possibly herself. We study influence processes modelled by ordered weighted averaging operators, which are anonymous: they only depend on how many agents share an opinion. For instance, this allows to study situations where the influence process is based on majorities, which are not covered by the classical approach of weighted averaging aggregation. We find a necessary and sufficient condition for convergence to consensus and characterize outcomes where the society ends up polarized. Our results can also be used to understand more general situations, where ordered weighted averaging operators are only used to some extent. We provide an analysis of the speed of convergence and the possible outcomes of the process. Furthermore, we apply our results to fuzzy linguistic quantifiers, i.e., expressions like “most” or “at least a few”. |
| Keywords: | Influence, Anonymity, Ordered Weighted Averaging Operator, Convergence, Consensus, Speed Of Convergence, Fuzzy Linguistic Quantifier |
| JEL: | C7 D7 D85 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.51&r=gth |
| By: | Vermeulen A.J.; Schr?der M.J.W.; Flesch J. (GSBE) |
| Abstract: | We consider a bilateral trade model in which both players have a finite number of possible valuations. The sellers valuation and the buyers valuation for the object are private information, but the independent beliefs about these valuations are common knowledge. In this setting, we provide a characterization of the set of interim individually rational-implementable trading rules, analogous to the result of Myerson and Satterthwaite 1983. Thereafter, we derive necessary conditions for incentive compatible and ex post individually rational direct mechanisms. For the special class of corner mechanisms with discrete uniform beliefs, we characterize the set of ex post individually rational-implementable trading rules. In this context it is also shown that ex post efficiency can only be achieved if the number of different valuations is small. The maximal number of different valuations for which efficiency is still possible depends on the prior probability distribution of valuations. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013025&r=gth |
| By: | Le Zhang (University of New South Wales); Andreas Ortmann (University of New South Wales) |
| Abstract: | In this paper, we reproduce Engel’s (2011) meta-study of dictator game experiments using his data, and then replicate it using our own data. We find that Engel’s (2011) meta-study of dictator game experiments is quite robust. We show that meta-analyses of dictator game experiments depend to an extent on the definition of independent variables and consistent coding of studies. This insight pertains in particular to the take-option, which has produced important questions (Bardsley 2008; List 2007; Guala and Mittone 2010) about the epistemological inferences one can draw from dictator game experiments. |
| Keywords: | dictator game experiments, meta-analysis, meta-regression, reproduction, replication |
| JEL: | C24 C91 D03 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2012-44&r=gth |
| By: | Herbst, Luisa; Konrad, Kai A.; Morath, Florian |
| Abstract: | We study endogenous group formation in tournaments employing experimental threeplayer contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone. -- Wir untersuchen die endogene Bildung von Gruppen in Wettkämpfen in experimentellen Drei-Spieler-Wettbewerben. Es zeigt sich, dass Spieler in endogen gebildeten Allianzen besser mit dem Moral Hazard-Problem in Gruppen zurechtkommen als Spieler, die in eine Allianz gezwungen werden. Außerdem entscheiden sich Spieler, die bereit sind, überdurchschnittlichen Einsatz zu leisten, allein zu agieren. Sind diese Spieler gezwungen in einer Allianz zu spielen, investieren sie sogar mehr, wogegen ihre Mitspieler ihren Einsatz reduzieren. Die Erwartung dieser Ausbeutung ist eine mögliche Erklärung für ihre Präferenz allein zu agieren. |
| Keywords: | endogenous group formation,contest,conflict,alliance,experiment,moral hazard problem,free-riding,in-group favoritis |
| JEL: | D72 D74 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2013301&r=gth |
| By: | E. M. Parilina; A. Tampieri |
| Abstract: | In this paper we study marriage formation through a two-sided secretary problem approach. We consider individuals with nontransferable utility and two different dimensions of heterogeneity, a characteristic evaluated according to the idiosyncratic preferences of potential partners, and an universally-rankable characteristic. There are two possible states of the world, one in which people meet their partner randomly, and one in which the meeting occurs between individuals with similar characteristics. We show that individuals with higher universal characteristic tend to be more picky in their marriage hunting. This does not necessarily mean that they marry later than other individuals, since the higher expected quality of their potential partners in the assortative meeting state can make them marry earlier than individuals with a lower universal characteristic. |
| JEL: | C73 C78 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp886&r=gth |
| By: | Paul Pezanis-Christou (School of Economics, University of Adelaide) |
| Abstract: | The paper reports on the effects of one-sided imperfect information on bidding behaviour in simultaneous and sequential first-price auctions of non-identical objects when bidders have multi-unit demands. The analysis provides the following four main results. First, when different objects are to be sold in sequence, the seller maximises her expected revenues by selling the most valuable object first. Second, the more the objects are different and the more the sequential format favours the informed bidder. Third, by switching the order of sales, the seller may want to change her initial preference for a simultaneous format (in which bidders submit object-specific bids) to one for a sequential format. Fourth, sequential auctions are mostly preferred by the seller when the objects are likely to be of low value and the precision of the informed bidder's signal is low. |
| Keywords: | multiple-object auctions, sequential and simultaneous procedures, first-price auctions, asymmetric bidders, multi-unit demands, common value, price trends, order of sales. |
| JEL: | C7 D4 D44 D8 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2013-07&r=gth |
| By: | Simon Cornée (CREM CNRS UMR 6211, University of Rennes 1 and CERMi); David Masclet (CREM CNRS UMR 6211, University of Rennes 1 and CIRANO (Montreal)) |
| Abstract: | Microfinance is generally associated with high repayment rates. However, it is not clear whether the success of microfinance results only from the use of group lending or is also due to other mechanisms such as peer sanctioning or dynamic incentives induced by long-term relationships that are typically included in microfinance contracts. In this paper, we contribute to the existing literature by investigating the respective effects of each of these components of microfinance. This is done by running a laboratory experiment that allows us to isolate long-term relationships from the two other components (i.e. group lending and peer monitoring). Our experiment indicates that peer-lending dimension of microcredit in absence of peer-sanctioning mechanism is not sufficient to mitigate ex ante and ex post moral hazards. In sharp contrast, we find that individualized long-term credit relationships perform significantly better than group-lending mechanisms with or without peer sanctioning. |
| Keywords: | Experimental Economics, Credit Market, Microfinance, Peer Lending |
| JEL: | C72 C91 G20 G21 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201316&r=gth |