|
on Game Theory |
| By: | Peter Bayer (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); György Kozics (Unknown); Nora Gabriella Szöke (Unknown) |
| Abstract: | We study public goods games played on networks with possibly non-recip-rocal relationships between players. Examples for this type of interactions include one-sided relationships, mutual but unequal relationships, and par-asitism. It is well known that many simple learning processes converge to a Nash equilibrium if interactions are reciprocal, but this is not true in general for directed networks. However, by a simple tool of rescaling the strategy space, we generalize the convergence result for a class of directed networks and show that it is characterized by transitive weight matrices and quadratic best-response potentials. Additionally, we show convergence in a second class of networks; those rescalable into networks with weak exter-nalities. We characterize the latter class by the spectral properties of the absolute value of the network's weight matrix and by another best-response potential structure. |
| Keywords: | Potential games,Local public goods,Externalities,Networks,Non-reciprocal relations |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03542533&r= |
| By: | Joseph Y. Halpern; Yuval Heller; Eyal Winter |
| Abstract: | We study the strategic advantages of coarsening one's utility by clustering nearby payoffs together (i.e., classifying them the same way). Our solution concept, coarse-utility equilibrium (CUE) requires that (1) each player maximizes her coarse utility, given the opponent's strategy, and (2) the classifications form best replies to one another. We characterize CUEs in various games. In particular, we show that there is a qualitative difference between CUEs in which only one of the players clusters payoffs, and those in which all players cluster their payoffs, and that the latter type induce players to treat co-players better than in Nash equilibria in the large class of games with monotone externalities. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.10141&r= |
| By: | Argenton, Cedric (Tilburg University, School of Economics and Management); Ivanova-Stenzel, Radosveta; Müller, Wieland (Tilburg University, School of Economics and Management) |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:bec182fc-5222-4ec2-9632-3369a281269f&r= |
| By: | Vijay V. Vazirani |
| Abstract: | The classic paper of Shapley and Shubik \cite{Shapley1971assignment} showed that the set of imputations in the core of the assignment game is precisely the set of optimal solutions to the dual of the LP-relaxation of this game. Since the worth of this game is given by an optimal solution to the primal LP, this naturally raises the question of studying core imputations through the lens of complementarity. Our exploration yields new insights: we obtain a relationship between the competitiveness of individuals and teams of agents and the amount of profit they accrue. This also sheds light on the phenomenon of degeneracy in assignment games, i.e., when the optimal assignment is not unique. The core is a quintessential solution concept in cooperative game theory. It contains all ways of distributing the total worth of a game among agents in such a way that no sub-coalition has incentive to secede from the grand coalition. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.00619&r= |
| By: | M\'ario S. Alvim; Konstantinos Chatzikokolakis; Yusuke Kawamoto; Catuscia Palamidessi |
| Abstract: | A common goal in the areas of secure information flow and privacy is to build effective defenses against unwanted leakage of information. To this end, one must be able to reason about potential attacks and their interplay with possible defenses. In this paper, we propose a game-theoretic framework to formalize strategies of attacker and defender in the context of information leakage, and provide a basis for developing optimal defense methods. A novelty of our games is that their utility is given by information leakage, which in some cases may behave in a non-linear way. This causes a significant deviation from classic game theory, in which utility functions are linear with respect to players' strategies. Hence, a key contribution of this paper is the establishment of the foundations of information leakage games. We consider two kinds of games, depending on the notion of leakage considered. The first kind, the QIF-games, is tailored for the theory of quantitative information flow (QIF). The second one, the DP-games, corresponds to differential privacy (DP). |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.12060&r= |
| By: | D. Choudhury; S. Borkotokey; Rajnish Kumar; Sudipta Sarangi |
| Abstract: | In cooperative games with transferable utilities, the Shapley value is an extreme case of marginalism while the Equal Division rule is an extreme case of egalitarianism. The Shapley value does not assign anything to the non-productive players and the Equal Division rule does not concern itself to the relative efficiency of the players in generating a resource. However, in real life situations neither of them is a good fit for the fair distribution of resources as the society is neither devoid of solidarity nor it can be indifferent to rewarding the relatively more productive players. Thus a trade-off between these two extreme cases has caught attention from many researchers. In this paper, we obtain a new value for cooperative games with transferable utilities that adopts egalitarianism in smaller coalitions on one hand and on the other hand takes care of the players' marginal productivity in sufficiently large coalitions. Our value is identical with the Shapley value on one extreme and the Equal Division rule on the other extreme. We provide four characterizations of the value using variants of standard axioms in the literature. We have also developed a strategic implementation mechanism of our value in sub-game perfect Nash equilibrium. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.09182&r= |
| By: | Dietzenbacher, Bas (RS: GSBE other - not theme-related research, QE Math. Economics & Game Theory); Yanovskaya, Elena |
| Abstract: | This paper introduces and studies the equal split-off set for cooperative games with nontransferable utility. We illustrate the new solution for the famous Roth-Shafer examples and present two axiomatic characterizations based on different consistency properties on the class of exact partition games, i.e. the class of games where it intersects the core. Moreover, we provide explicit expressions for the class of bargaining problems and the class of bankruptcy problems. |
| JEL: | C71 |
| Date: | 2022–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2022002&r= |
| By: | Jakub Bielawski; Thiparat Chotibut; Fryderyk Falniowski; Michal Misiurewicz; Georgios Piliouras |
| Abstract: | We study the dynamics of simple congestion games with two resources where a continuum of agents behaves according to a version of Experience-Weighted Attraction (EWA) algorithm. The dynamics is characterized by two parameters: the (population) intensity of choice $a>0$ capturing the economic rationality of the total population of agents and a discount factor $\sigma\in [0,1]$ capturing a type of memory loss where past outcomes matter exponentially less than the recent ones. Finally, our system adds a third parameter $b \in (0,1)$, which captures the asymmetry of the cost functions of the two resources. It is the proportion of the agents using the first resource at Nash equilibrium, with $b=1/2$ capturing a symmetric network. Within this simple framework, we show a plethora of bifurcation phenomena where behavioral dynamics destabilize from global convergence to equilibrium, to limit cycles or even (formally proven) chaos as a function of the parameters $a$, $b$ and $\sigma$. Specifically, we show that for any discount factor $\sigma$ the system will be destabilized for a sufficiently large intensity of choice $a$. Although for discount factor $\sigma=0$ almost always (i.e., $b \neq 1/2$) the system will become chaotic, as $\sigma$ increases the chaotic regime will give place to the attracting periodic orbit of period 2. Therefore, memory loss can simplify game dynamics and make the system predictable. We complement our theoretical analysis with simulations and several bifurcation diagrams that showcase the unyielding complexity of the population dynamics (e.g., attracting periodic orbits of different lengths) even in the simplest possible potential games. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.10992&r= |
| By: | Zazueta, Jorge |
| Abstract: | We develop a simple model of technology adoption based on evolutionary game theory that corresponds with intuition but also uncovers a non-ideal equilibrium that we call the technology adoption dilemma. |
| Date: | 2021–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:d5wqy&r= |
| By: | Peter Bayer (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ani Guerdjikova (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes) |
| Abstract: | We analyze a model of endogenous two-sided network formation where players are affected by uncertainty in their opponents' decisions. We model this uncertainty using the notion of equilibrium under ambiguity. Unlike the set of Nash equilibria, the set of equilibria under ambiguity does not always include underconnected and thus inefficient networks such as the empty network. On the other hand, it may include networks with unreciprocated, one-way links, which comes with an efficiency loss as linking efforts are costly. We characterize equilibria under ambiguity and provide conditions under which increased player optimism comes with an increase in connectivity and realized benefits in equilibrium. Next, we analyze network realignment under a myopic updating process with optimistic shocks, and derive a global stability condition of efficient networks. Under this condition, called ‘aligned preferences', a subset of the Pareto optimal equilibrium networks is reached, specifically, networks that maximize the players' total benefits of connections. |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03542373&r= |
| By: | Yichen Feng; Jean-Pierre Fouque; Ruimeng Hu; Tomoyuki Ichiba |
| Abstract: | We analyze the systemic risk for disjoint and overlapping groups (e.g., central clearing counterparties (CCP)) by proposing new models with realistic game features. Specifically, we generalize the systemic risk measure proposed in [F. Biagini, J.-P. Fouque, M. Frittelli, and T. Meyer-Brandis, Finance and Stochastics, 24(2020), 513--564] by allowing individual banks to choose their preferred groups instead of being assigned to certain groups. We introduce the concept of Nash equilibrium for these new models, and analyze the optimal solution under Gaussian distribution of the risk factor. We also provide an explicit solution for the risk allocation of the individual banks, and study the existence and uniqueness of Nash equilibrium both theoretically and numerically. The developed numerical algorithm can simulate scenarios of equilibrium, and we apply it to study the bank-CCP structure with real data and show the validity of the proposed model. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.00662&r= |
| By: | Pavel Ilinov; Ole Jann |
| Abstract: | We consider two types of models: (i) a rational inattention problem (as known from the literature) and (ii) a conformity game, in which fully informed players find it costly to deviate from average behavior. We show that these problems are equivalent to each other both from the perspective of the participant and the outside observer: Each individual faces identical trade-offs in both situations, and an observer would not be able to distinguish the two models from the choice data they generate. We also establish when individual behavior in the conformity game maximizes welfare. |
| Keywords: | conformity; equivalence; rational inattention; social norms; |
| JEL: | D81 D83 D91 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp719&r= |
| By: | Sylvain Béal (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Stéphane Gonzalez (Université de Saint-Etienne, CNRS UMR 5824 GATE Lyon Saint-Etienne, France); Philippe Solal (Université de Saint-Etienne, CNRS UMR 5824 GATE Lyon Saint-Etienne, France); Peter Sudhölter (Department of Economics, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark) |
| Abstract: | A TU game is totally positive if it is a linear combination of unanimity games with nonnegative coefficients. We show that the core on each cone of convex games that contains the set of totally positive games is characterized by the traditional properties Pareto efficiency, additivity (ADD), individual rationality, and the null-player property together with one new property, called unanimity requiring that the solution, when applied to a unanimity game on an arbitrary coalition, allows to distribute the entire available amount of money to each player of this coalition. We also show that the foregoing characterization can be generalized to the domain of balanced games by replacing ADD by “ADD on the set of totally positive games plus super-additivity (SUPA) in general”. Adding converse SUPA allows to characterize the core on arbitrary domains of TU games that contain the set of all totally positive games. Converse SUPA requires a vector to be a member of the solution to a game whenever, when adding a totally positive game such that the sum becomes totally additive, the sum of the vector and each solution element of the totally positive game belongs to the solution of the aggregate game. Unlike in traditional characterizations of the core, our results do not use consistency properties. |
| Keywords: | Core, totally positive games, convex games, super-additivity |
| JEL: | C71 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:crb:wpaper:2022-02&r= |
| By: | Burton-Chellew, Maxwell; Guérin, Claire |
| Abstract: | Why does human cooperation often unravel in economic experiments despite a promising start? Previous studies have interpreted the decline as the reaction of disappointed cooperators retaliating in response to lesser cooperators (conditional cooperation). This interpretation has been considered evidence of a uniquely human form of cooperation, motivated by altruistic concerns for fairness and requiring special evolutionary explanations. However, experiments have typically shown individuals information about both their personal payoff and information about the decisions of their groupmates (social information). Showing both confounds explanations based on conditional cooperation with explanations based on individuals learning how to better play the game. Here we experimentally decouple these two forms of information, and thus these two learning processes, in public goods games involving 616 Swiss university participants. We find that payoff information leads to a greater decline, supporting a payoff-based learning hypothesis. In contrast, social information has small or negligible effect, contradicting the conditional cooperation hypothesis. We also find widespread evidence of both confusion and selfish motives, suggesting that human cooperation is maybe not so unique after all. |
| Date: | 2021–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:nuv7y&r= |
| By: | Luca Colombo; Paola Labrecciosa; Ngo Van Long |
| Abstract: | We study the dynamics of equilibrium membership of an international environmental agreement aimed at increasing the stock of a global public good such as climate change mitigation. In contrast with previous studies, we assume partial cooperation among signatories, and show that the coalition size can be large and increasing over time even when the initial coalition size is small. We highlight a novel trade-off between agreements that are narrow but deep and long-lived versus those that are broad and shallow but short-lived. We show that loose cooperative agreements, which are broad but shallow and short-lived, are both welfare superior and Pareto superior to tight cooperative agreements, which are narrow but deep and long-lived. We also show that conditions exist under which the equilibrium coalition size is efficient. Nous étudions la dynamique d'adhésion à l'équilibre à un accord environnemental international visant à accroître le stock d'un bien public mondial tel que l'atténuation du changement climatique. Contrairement aux études précédentes, nous supposons une coopération partielle entre les signataires et montrons que la taille de la coalition peut être importante et augmenter au fil du temps même lorsque la taille initiale de la coalition est petite. Nous mettons en évidence un nouveau compromis entre les accords qui sont étroits mais profonds et de longue durée et ceux qui sont larges et superficiels mais de courte durée. Nous montrons que les accords de coopération partielle, qui sont larges mais superficiels et de courte durée, sont à la fois supérieurs en termes de bien-être aux accords de coopération serrés, qui sont étroits mais profonds et de longue durée. Nous montrons également qu'il existe des conditions dans lesquelles la taille de la coalition d'équilibre est efficace. |
| Keywords: | differential games,climate change mitigation,stable coalitions,coefficient of cooperation,social welfare, jeux différentiels,atténuation du changement climatique,coalitions stables,coefficient de coopération,bien-être social |
| JEL: | C73 D60 H41 Q54 |
| Date: | 2022–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2022s-01&r= |
| By: | Charlson, G. |
| Abstract: | A platform holds information on the demographics of its users and wants maximise total surplus. The data generates a probability over which of two products a buyer prefers, with different data segmentations being more or less informative. The platform reveals segmentations of the data to two firms, one popular and one niche, preferring to reveal no information than completely revealing the consumer's type for certain. The platform can improve profits by revealing to both firms a segmentation where the niche firm is relatively popular, but still less popular than the other firm, potentially doing even better by revealing information asymmetrically. The platform has an incentive to provide more granular data in markets in which the niche firm is particularly unpopular or in which broad demographic categories are not particularly revelatory of type, suggesting that the profit associated with big data techniques differs depending on market characteristics. |
| Keywords: | Strategic interaction, network games, interventions, industrial organisation, platforms, hypergraphs |
| JEL: | D40 L10 L40 |
| Date: | 2021–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2104&r= |
| By: | Ding, S.; Dziubinski, M.; Goyal, S. |
| Abstract: | A recurring theme in the study of society is the concentration of influence and power that is driven through unequal membership of groups and associations. In some instances these bodies constitute a small world while in others they are fragmented into distinct cliques. This paper presents a new model of clubs and networks to understand the sources of individual marginalization and the origins of different club networks. In our model, individuals seek to become members of clubs while clubs wish to have members. Club value is increasing in its size and in the strength of ties with other clubs. We show that a stable membership profile exhibits marginalization of individuals and that this is generally not welfare maximizing. Our second result shows that if returns from strength of ties are convex (concave) then stable memberships support fragmented networks with strong ties (small worlds held together by weak ties). We illustrate the value of these theoretical results through case studies of inter-locking directorates, boards of editors of journals, and defence and R&D alliances. |
| Date: | 2021–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2109&r= |
| By: | Ngo Van Long |
| Abstract: | We consider an economy in which some taxpayers behave in a Kantian way in their donation behavior while others are Nash players. A Kantian taxpayer holds the norm that any suggested deviation from a proposed equilibrium profile would be adopted by him only if when all members of their community adopted the same deviation, they would all achieve a higher level of welfare. In contrast, a Nash player follows the individual rationality criterion: He would deviate if, assuming all others do not deviate, he would improve his own payoff. We show that if all taxpayers are Nash players, then there is an efficiency-inducing tax credit scheme for charitable contributions. In contrast, if all taxpayers are Kantian, the optimal tax credit for charity is zero. If both types of taxpayers co-exist, and the government does not know who is of what type, then it is not possible for the government to induce the first-best outcome, but it must rely on a second-best tax-credit scheme. Nous considérons une économie dans laquelle certains contribuables se comportent de manière kantienne dans leur comportement de don tandis que d'autres sont des joueurs de Nash. Un contribuable kantien maintient la norme selon laquelle tout écart suggéré par rapport à un profil d'équilibre proposé ne serait adopté par lui que si, lorsque tous les membres de leur communauté adoptaient le même écart, ils atteindraient tous un niveau de bien-être plus élevé. En revanche, un joueur de Nash suit le critère de rationalité individuelle : il s'écarterait si, en supposant que tous les autres ne s'écartent pas, il améliorait son propre gain. Nous montrons que si tous les contribuables sont des acteurs de Nash, alors il existe un régime de crédit d'impôt induisant l'efficacité pour les contributions. En revanche, si tous les contribuables sont kantiens, le crédit d'impôt optimal pour les œuvres caritatives est nul. Si les deux types de contribuables coexistent et que le gouvernement ne sait pas qui est de quel type, alors il n'est pas possible pour le gouvernement d'obtenir l’ optimum social, mais il doit s'appuyer sur un système de crédit d'impôt qui délivra un résultat `second-best’. |
| Keywords: | Categorical imperative,Kantian behavior,Kantian equilibrium,Kant-Nash equilibrium,voluntary contributions to a public good,tax credits, Impératif catégorique,comportement kantien,équilibre kantien,équilibre de Kant-Nash,contributions volontaires à un bien public,les crédits d'impôt |
| JEL: | H21 H31 H41 |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-44&r= |
| By: | John Gilbert; Onur A. Koska (University of Canterbury); Reza Oladi |
| Abstract: | In the context of a model of international trade through reciprocal dumping with horizontally differentiated goods, we study the endogenous choice of quantities and prices as strategic variables. We show that while a Cournot outcome prevails under conditions of export rivalry, strategic asymmetry under foreign direct investment rivalry may be observed, especially when it is possible to initially deter FDI by committing to a price contract, and when switching is costly and/or takes time. |
| Keywords: | Exports vs. FDI; Horizontal Product Differentiation; Cournot-Bertrand-Nash Equilibrium |
| JEL: | D43 F12 F23 |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:22/04&r= |
| By: | S. Nageeb Ali; Navin Kartik; Andreas Kleiner |
| Abstract: | We study sequential bargaining between a proposer and a veto player. Both have single-peaked preferences, but the proposer is uncertain about the veto player's ideal point. The proposer cannot commit to future proposals. When players are patient, there can be equilibria with Coasian dynamics: the veto player's private information can largely nullify proposer's bargaining power. Our main result, however, is that there are also equilibria in which the proposer obtains the high payoff that he would with commitment power. The driving force is that the veto player's single-peaked preferences give the proposer an option to "leapfrog", i.e., to secure agreement from only low-surplus types early on to credibly extract surplus from high types later. Methodologically, we exploit the connection between sequential bargaining and static mechanism design. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.02462&r= |
| By: | Mohammadi, Mohammad Ali |
| Abstract: | The situation of private contribution to an open-source project is considered. This case is distinguished from a simple case of public good provision through the various underlying incentives of the participants. In the modelling, these incentives come into play to form various equilibria from which conclusions on their roles can be derived. Specifically, it is shown that the agent's willingness to participate, her own need from the project, and the community's altruism play important roles in driving the project forward. |
| Keywords: | Open-source, contribution, altruism, simultaneous game |
| JEL: | C70 D64 L17 |
| Date: | 2020–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111795&r= |
| By: | Daniel F. Garrett (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Renato Gomes (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Lucas Maestri (FGV-EPGE - Universidad de Brazil) |
| Abstract: | We study competition by firms that simultaneously post (potentially nonlinear) taris to consumers who are privately informed about their tastes. Market power stems from informational frictions, in that consumers are heterogeneously informed about firms' oers. In the absence of regulation, all firms oer quantity discounts. As a result, relative to Bertrand pricing, imperfect competition benefits disproportionately more consumers whose willingness to pay is high, rather than low. Regulation imposing linear pricing hurts the former but benefits the latter consumers. While consumer surplus increases, firms' profits decrease, enough to drive down utilitarian welfare. By contrast, improvements in market transparency increase utilitarian welfare, and achieve similar gains on consumer surplus as imposing linear pricing, although with limited distributive impact. On normative grounds, our analysis suggests that banning price discrimination is warranted only if its distributive benefits have a weight on the societal objective. |
| Keywords: | Asymmetric information,Informational frictions,Linear pricing,Nonlinear pricing,Oligopoly |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03515749&r= |
| By: | Sanjay Chandlekar; Easwar Subramanian; Sanjay Bhat; Praveen Paruchuri; Sujit Gujar |
| Abstract: | Periodic double auctions (PDA) have applications in many areas such as in e-commerce, intra-day equity markets, and day-ahead energy markets in smart-grids. While the trades accomplished using PDAs are worth trillions of dollars, finding a reliable bidding strategy in such auctions is still a challenge as it requires the consideration of future auctions. A participating buyer in a PDA has to design its bidding strategy by planning for current and future auctions. Many equilibrium-based bidding strategies proposed are complex to use in real-time. In the current exposition, we propose a scale-based bidding strategy for buyers participating in PDA. We first present an equilibrium analysis for single-buyer single-seller multi-unit single-shot k-Double auctions. Specifically, we analyze the situation when a seller and a buyer trade two identical units of quantity in a double auction where both the buyer and the seller deploy a simple, scale-based bidding strategy. The equilibrium analysis becomes intractable as the number of participants increases. To be useful in more complex settings such as wholesale markets in smart-grids, we model equilibrium bidding strategy as a learning problem. We develop a deep deterministic policy gradient (DDPG) based learning strategy, DDPGBBS, for a participating agent in PDAs to suggest an action at any auction instance. DDPGBBS, which empirically follows the obtained theoretical equilibrium, is easily extendable when the number of buyers/sellers increases. We take Power Trading Agent Competition's (PowerTAC) wholesale market PDA as a testbed to evaluate our novel bidding strategy. We benchmark our DDPG based strategy against several baselines and state-of-the-art bidding strategies of the PowerTAC wholesale market PDA and demonstrate the efficacy of DDPGBBS against several benchmarked strategies. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.10127&r= |
| By: | Hongyin Chen; Yukun Cheng; Xiaotie Deng; Wenhan Huang; Linxuan Rong |
| Abstract: | The Non-Fungible Token (NFT) is viewed as one of the important applications of blockchain technology. Although NFT has a large market scale and multiple practical standards, several limitations of the existing mechanism in NFT markets exist. This work proposes a novel securitization and repurchase scheme for NFT to overcome these limitations. We first provide an Asset-Backed Securities (ABS) solution to settle the limitations of non-fungibility of NFT. Our securitization design aims to enhance the liquidity of NFTs and enable Oracles and Automatic Market Makers (AMMs) for NFTs. Then we propose a novel repurchase protocol for a participant owing a portion of NFT to repurchase other shares to obtain the complete ownership. As participants may strategically bid during the acquisition process, our repurchase process is formulated as a Stackelberg game to explore the equilibrium prices. We also provide solutions to handle difficulties at market such as budget constraints and lazy bidders. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.02199&r= |
| By: | Isenhardt, Lars; Seifert, Stefan; Hüttel, Silke |
| Abstract: | Current European Union legislation offers public authorities to grant a Right of First Refusal (RFR) in farmland auctions with public tenders in favour of the current tenant. That is, tenants can purchase the auctioned lot by matching the highest bid. Granting this right secures tenants to buy the land they use; however, it may deter other potential buyers’ auction participation and incentivise bidders to adjust their strategies. An RFR for tenants is thus hypothesised to decrease the number of bidders and lower sales prices. Empirical evidence seems lacking thus far and in this paper, we target to closing this gap by analysing a tenants’ RFR effect on the number of bidders and winning bids in first-price privatization auctions in eastern Germany. Using around 4,000 land auction results in one German Federal State over 2007–2018 by two agencies that differ in granting the RFR to tenants, we combine non-parametric nearest neighbour matching based on the Mahalanobis distance with parametric post-matching regressions. Our results indicate that the RFR reduces competition by an average of 9.3% bidders per auction and lowers the prices paid in land auctions by 16.4 %. |
| Keywords: | Agricultural and Food Policy, Industrial Organization, Land Economics/Use, Political Economy |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi21:317062&r= |