2-Player Nash and Nonsymmetric Bargaining Games: Algorithms and Structural Properties

The solution to a Nash or a nonsymmetric bargaining game is obtained by maximizing a concave function over a convex set, i.e., it is the solution to a convex program. We show that each 2-player game whose convex program has linear constraints, admits a rational solution and such a solution can be found in polynomial time using only an LP solver. If in addition, the game is succinct, i.e., the coefficients in its convex program are ``small'', then its solution can be found in strongly polynomial time. We also give a non-succinct linear game whose solution can be found in strongly polynomial time

Concave Generalized Flows with Applications to Market Equilibria

We consider a nonlinear extension of the generalized network flow model, with the flow leaving an arc being an increasing concave function of the flow entering it, as proposed by Truemper and Shigeno. We give a polynomial time combinatorial algorithm for solving corresponding flow maximization problems, finding an epsilon-approximate solution in O(m(m+log n)log(MUm/epsilon)) arithmetic operations and value oracle queries, where M and U are upper bounds on simple parameters. This also gives a new algorithm for linear generalized flows, an efficient, purely scaling variant of the Fat-Path algorithm by Goldberg, Plotkin and Tardos, not using any cycle cancellations. We show that this general convex programming model serves as a common framework for several market equilibrium problems, including the linear Fisher market model and its various extensions. Our result immediately extends these market models to more general settings. We also obtain a combinatorial algorithm for nonsymmetric Arrow-Debreu Nash bargaining, settling an open question by Vazirani.Comment: Major revision. Instead of highest gain augmenting paths, we employ the Fat-Path framework. Many parts simplified, running time for the linear case improve

Bargaining and Distribution of Power in the EU's Conciliation Committee

The European Union (EU) has moved towards bicameralism, making the codecision procedure its most important mechanism for decision making. To gauge if European Parliament (EP) and Council of Ministers (CM) are equally powerful ‘codecision makers’, understanding of the final stage of the procedure – bargaining in the Conciliation Committee – is crucial. Here, EP and CM are assumed to have spatial preferences determined by their respective internal decision mechanisms. Applying bargaining theory to predict inter-institutional agreements in the Conciliation Committee, it turns out that although institutionally the Council and the Parliament are seemingly in a symmetric position, CM has significantly greater influence on EU legislation.European Union codecision procedure, Conciliation Committee, bargaining, spatial voting, decision procedures

The Reality and Masquerade behind Bargaining over Welfare Pie Sizing, Delivery and Slicing.

The present analysis addresses the apparently critical issue of circulation of wealth in society. Three actors play the game of welfare-related taxation. The first actor, in the role of Negotiator No.1, stands up for citizens’ legal and moral rights to primary needs. The second actor, in the role of Negotiator No.2, proceeds in response to public will for the provision and delivery of public goods. Quite the opposite, the third actor, hereinafter named the Voter, who represents the taxpayers, prefers personal consumption to moral understanding and public activity. In fact, backed by electoral maneuvering, the Voter emanates a risk to break down negotiations. The result of the simulation provides an evidence for the claim that a 50% median income is close enough to be considered a realistic choice of poverty line within the variety or rules of the alternating-offers bargaining game and conditions for unanimous consent of voter-citizens.bargaining; policy; public goods; simulation; taxation; voting

Who Gets What, When, How? Power, Organization, Markets, Money and the Allocation of Resources

Money is a mystery and financial institutions are often regarded as guardians and promoters of the mystery. These sketches are designed to help an individual interested in, but not technically trained in economics, understand markets, money, credit and the evolution of a mass market system embedded in the rich context of its political environment and society. The efficient functioning of a dynamic economy requires the presence of money and financial institutions. The great variety of financial institutions in any advanced economy requires that a synthetic approach is used to understand what the whole looks like. Verbal description provides an overarching view of the mixture of history, law, philosophy, social mores, and political structure that supplies the context for the functioning of the economy. This has been vividly illustrated by Adam Smith, his teacher the Reverend Francis Hutcheson and his close friend David Hume. There are two different but highly allied themes in this single slim volume. Chapters 1, 2, and 3 supply the rich context of history, society, polity and law in which every economy is embedded. Chapters 12 and 13 sketch what might lie ahead given the current state of the world. These chapters require no symbols or technical depth. In contrast Chapters 4 to 11 offers a reasonably nontechnical exposition of some of the considerable development in formal economic theory pertaining to money and financial institutions as economics struggles towards emerging as a science, balancing quantitative measures with qualifications that help to explain what the numbers mean

Tariff determination in general equilibrium : a bargain-theoretic approach to policy modelling

Government policies with redistributive implications have been a source of many social and political conflicts. Until recently, positive economics has lacked a consistent analytical framework that could explain how such policies are formed and how they respond to exogenous shocks. This study makes a contribution towards this direction by offering a consistent theoretical framework for short-run policy modelling. Assuming that tariff rates are the only available instruments of a government’s redistributive policy this study addresses the following two specific questions: (i) how the tariff rates are determined; (ii) and how do they respond to exogenous shocks? To answer these questions, a general equilibrium model of a political economy is developed by combining a model of the political sphere with a Ricardo-Viner type model of the economic sphere. Policies are determined by strategic interactions between government and the conflicting interest groups in the political sphere which, in turn, determine the welfare of the interest groups in the economic sphere and political support for the government in the political sphere. The conflicting interest groups may spend resources in predatory political activities or may choose to cooperate. A general equilibrium of the political economy is obtained when both the political and the economic spheres are simultaneously in equilibrium. Under fairly general conditions, it is shown that at least one equilibrium exists in a political economy whether it exhibits cooperative behaviour in the political sphere or not This study has employed the analytical framework of cooperative-bargaining theory in obtaining a general equilibrium model of the political economy. This approach is taken because a noncooperative equilibrium is not necessarily Pareto efficient Several interesting results follow from the comparative static properties of the model. In particular, it is shown that: (i) the import-competing sector receives increased protection if the relative price of the home importable falls in the world market; (ii) the protection afforded to a particular sector declines if the domestic endowment of factors moves in favour of that sector, and (iii) so long as the distribution of relative bargaining power remains unaffected by the shocks, the response of the tariff rate to the shocks will be independent of the distribution the bargaining power. These analytical results are very similar to ones that follow from the maximization of a conservative social welfare function. The implications are that: (i) a government’s redistributive policy could be modelled as an equilibrium outcome of a bargaining process between the organized interest groups holding conflicting interests on the level of the redistributive policy; and (ii) the bargaining process may be viewed as the mechanism of generating a conservative social welfare function. The self-interest, and public-interest approaches in policy modelling can thus be reconciled

Social Welfare

"Social Welfare" offers, for the first time, a wide-ranging, internationally-focused selection of cutting-edge work from leading academics. Its interdisciplinary approach and comparative perspective promote examination of the most pressing social welfare issues of the day. The book aims to clarify some of the ambiguity around the term, discuss the pros and cons of privatization, present a range of social welfare paradoxes and innovations, and establish a clear set of economic frameworks with which to understand the conditions under which the change in social welfare can be obtained

Voluntary contributions to public goods:A multi-disciplinary examination of prosocial behavior and its antecedents

The four essays collected in this Ph.D. dissertation concern prosocial motivations in different social contexts, applying conceptual, experimental, and survey methodologies to investigate how the complex and diverse interaction between psychological attributes and the social environment shapes prosocial behaviors. The first essay provides a conceptual framework on how cognition links relevant stimuli with innate moralities to construct Public Service Motivation (PSM) and guild various social behaviors. The second essay builds on the first essay and provides empirical evidence for the essential role of innate moralities in shaping Public Service Motivation and affecting behavioral consequences. The third and fourth essay apply methods from experimental economics to investigate the role of contextual stimuli in affecting prosocial motivation in a lab experiment of the volunteer’s dilemma game. The third essay first extends the classic volunteer’s dilemma game and develops novel treatments to examine pro-social risk-taking and competitive behavior in a lab experiment. The fourth essay then incorporates the PSM theory in the extended volunteer’s dilemma game to explore the role of PSM in self-sacrifice behavior and its relationships with external contextual factors