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on Game Theory |
| By: | Dietzenbacher, Bas (Tilburg University, Center For Economic Research) |
| Abstract: | This paper analyzes bankruptcy games with nontransferable utility as a generalization of bankruptcy games with monetary payoffs. Following the game theoretic approach to NTU-bankruptcy problems, we study some appropriate properties and the core of NTU-bankruptcy games. Generalizing the core cover and the reasonable set to the class of NTU-games, we show that NTU-bankruptcy games are compromise stable and reasonable stable. Moreover, we derive a necessary and sufficient condition for an NTU-bankruptcy rule to be game theoretic. |
| Keywords: | NTU-bankruptcy problem,; NTU-bankruptcy game,; compromise stability,; reasonable stability; game theoretic bankruptcy rule |
| JEL: | C71 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:1cc9f5ff-f889-43ec-93af-c8db469243d4&r=gth |
| By: | Sebastian Goerg (Florida State University); David Rand (Yale University); Gari Walkowitz (University of Cologne) |
| Abstract: | We systematically investigate prisoner’s dilemma games and dictator games with valence framing. We find that give versus take frames influence subjects’ behavior and beliefs in the prisoner’s dilemma game but not in the dictator game. |
| Keywords: | Prisoner’s Dilemma, Dictator Game, Framing, Give, Take, Cooperation, Generosity |
| JEL: | A13 C72 C91 F51 Z13 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2017_02_01&r=gth |
| By: | Melt van Schoor |
| Abstract: | In evolutionary game theory, “minigames†with reduced strategy sets are sometimes analysed in lieu of more complex models with many strategies. Are these simplified versions up to the task of explaining pertinent dynamic features of the larger models? This paper looks at the ultimatum game, in which it is known that a noisy evolutionary model leads to stable dynamic equilibriums that are far away from the game’s unique subgame perfect solution. It is argued that a naive approach is unsatisfactory and that the minigame analysis is more useful when related to the full game explicitly. A constellation of embedded minigames is identified in the full game, one for each imperfect equilibrium of the full game, with each playing out on its own conditional frequency space. It is shown that the conditional frequency dynamics applicable to these minigames have the same form as a full game’s dynamics with a reduced strategy set. While the minigames thus identified are still not two-dimensional, it is shown that two critical variables in each can be treated separately from the others, and these indeed behave like the variables in a two-dimensional standalone minigame. A graphical analysis based on selection-mutation equilibrium loci allows a clear understanding of why stable imperfect equilibriums exist and which factors tend to stabilize particular equilibriums. For example, lower-offer equilibriums are easier to stabilize, because a) proposers have more to lose by deviating from them and b) responder mutation aims at a higher target for the relevant conditional frequency. |
| Keywords: | evolution, evolutionary game theory, ultimatum game, minigames, conditional frequencies |
| JEL: | C72 C73 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:657&r=gth |
| By: | Gill, David (Purdue University); Prowse, Victoria L. (Purdue University) |
| Abstract: | Response times are a simple low-cost indicator of the process of reasoning in strategic games (Rubinstein, 2007; Rubinstein, 2016). We leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we define situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects' thinking times are to complexity. We also study how variation in response times at the individual level across rounds affects strategic behavior and success. We find that 'overthinking' is detrimental to performance: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. |
| Keywords: | response time, decision time, thinking time, strategic complexity, game theory, strategic games, repeated games, beauty contest, cognitive ability, personality |
| JEL: | C72 C91 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10518&r=gth |
| By: | Michele Lombardi (Adam Smith Business School, University of Glasgow); Naomi Yoshihara (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | This paper investigates the robustness of Dutta and Sen (2012) Theorem 1 to weaker notions of truth-telling. An individual honesty standard is modeled as a subgroup of the society, including the individual herself, for which she feels truth-telling concerns. An individual i is honest when she states her true preferences as well as rankings (not necessarily complete) of outcomes that are consistent with the true preferences of individuals in her honesty standard. The paper offers a necessary condition for Nash implementation, called partial-honesty monotonicity, and shows that in an independent domain of preferences that condition is equivalent to Maskin monotonicity. |
| Keywords: | Nash implementation; partial-honesty; non-connected honesty standards, independent domain |
| JEL: | C72 D71 D82 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2017-07&r=gth |
| By: | Michele Lombardi (Adam Smith Business School, University of Glasgow); Naoki Yoshihara (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | We study Nash implementation by natural price-quantity mechanisms in pure exchange economies when agents have intrinsic preferences for responsibility. An agent has an intrinsic preference for responsibility if she cares about truth-telling that is in line with the goal of the mechanism designer besides her material well-being. A semi-responsible agent is an agent who, given what her opponents do, acts in an irresponsible manner when a responsible behavior poses obstacles to her material well-being. The class of efficient allocation rules that are Nash implementable is identified provided that there is at least one agent who is semi-responsible. The Walrasian rule is shown to belong to that class. |
| Keywords: | Nash equilibrium, exchange economies, intrinsic preferences for responsibility, boundary problem, price-quantity mechanism |
| JEL: | C72 D71 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2017-05&r=gth |
| By: | Camille Cornand; Rodolphe Dos Santos Ferreira |
| Abstract: | The paper provides a micra-founded differentiated duopoly illustration of a beauty contest, in which the weight put on the strategic vs. the fundamental motive of the pay offs is not exogenous but may be manipulated by the players. We emphasize the role of the competition component of the strategic motive as a source of conflict with the fun damental motive. This conflict, already present in an oligopolistic setting under perfect information, is only exacerbated when information is imperfect and dispersed. We show how firm owners ease such conflict by opting for sorne cooperation, thus moderating the competitive toughness displayed by their managers. By doing so, they also influence the managers' strategic concern for coordination and consequently the weight put on public relative to private information. |
| Keywords: | beauty contest, competition, cooperation, coordination, differentiated duopoly, dispersed information, public information. |
| JEL: | D43 D82 L13 L21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-05&r=gth |
| By: | Benndorf, Volker; Martinez-Martinez, Ismael |
| Abstract: | We examine the impact of behavioral noise on equilibrium selection in a hawk-dove game with a model that linearly interpolates between the one- and two-population structures in an evolutionary context. Perturbed best response dynamics generates two hypotheses in addition to the bifurcation predicted by standard replicator dynamics. First, when replicator dynamics suggests mixing behavior (close to the one-population model), there will be a bias against hawkish play. Second, polarizing behavior as predicted by replicator dynamics in the vicinity of the two-population model will be less extreme in the presence of behavioral noise. We find both e.ects in our data set. |
| Keywords: | evolutionary game theory,perturbed best response dynamics,experiment in continuous time,hawk-dove game |
| JEL: | C62 C73 C91 C92 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:243&r=gth |
| By: | David Freeman (Simon Fraser University); Erik O. Kimbrough (Simon Fraser University); J. Philipp Reiss (Karlsruhe Institution of Technology) |
| Abstract: | Recent research suggests that auction winners sometimes fall prey to a “bidder's curse", paying more for an item at auction than they would have paid at a posted price. One explanation for this phenomenon is that bidders are inattentive to posted prices. We develop a model in which bidders' inattention, and subsequent overbidding, is driven by a rational response to the opportunity cost of acquiring information about the posted price. We test our model in a laboratory experiment in which subjects bid in an auction while facing an opportunity cost of looking up the posted price. We vary the opportunity cost, and we show that information acquisition decreases and consequently overbidding increases with opportunity cost as predicted |
| Keywords: | Auctions, Bidder's Curse, Limited Attention, Experiments, Rational Ignorance |
| JEL: | C72 C92 D44 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp17-04&r=gth |