3,405 research outputs found
Product differentiation when consumers may choose not to buy: Hotelling's convergence result revisited
Nous Ă©tudions le modĂšle spatial de diffĂ©rentiation d'Hotelling, mais au lieu de supposer que le marchĂ© est couvert quelles que soient les localisations des deux firmes, nous supposons qu'il existe une distance maximale (Ă©ventuellement infinie) qu'un consommateur est prĂȘt Ă parcourir pour acheter le bien. Cette gĂ©nĂ©ralisation apparemment anodine des hypothĂšses d'Hotelling modifie complĂštement les rĂ©sultats : le principe de "diffĂ©rentiation minimale" d'Hotelling n'est plus vĂ©rifiĂ© en gĂ©nĂ©ral. A l'Ă©quilibre, les firmes s'engagent dans un processus de diffĂ©rentiation maximale, intermĂ©diaire ou minimale, selon la forme de la distribution des positions des consommateurs et cette distance critique qu'un consommateur est prĂȘt Ă parcourir pour acquĂ©rir le bien.
Proof-theoretic Analysis of Rationality for Strategic Games with Arbitrary Strategy Sets
In the context of strategic games, we provide an axiomatic proof of the
statement Common knowledge of rationality implies that the players will choose
only strategies that survive the iterated elimination of strictly dominated
strategies. Rationality here means playing only strategies one believes to be
best responses. This involves looking at two formal languages. One is
first-order, and is used to formalise optimality conditions, like avoiding
strictly dominated strategies, or playing a best response. The other is a modal
fixpoint language with expressions for optimality, rationality and belief.
Fixpoints are used to form expressions for common belief and for iterated
elimination of non-optimal strategies.Comment: 16 pages, Proc. 11th International Workshop on Computational Logic in
Multi-Agent Systems (CLIMA XI). To appea
You better play 7: mutual versus common knowledge of advice in a weak-link experiment
This paper presents the results of an experiment on mutual versus common knowledge of advice in a two-player weak-link game with random matching. Our experimental subjects play in pairs for thirteen rounds. After a brief learning phase common to all treatments, we vary the knowledge levels associated with external advice given in the form of a suggestion to pick the strategy supporting the payoff- dominant equilibrium. Our results are somewhat surprising and can be summarized as follows: in all our treatments both the choice of the efficiency-inducing action and the percentage of efficient equilibrium play are higher with respect to the control treatment, revealing that even a condition as weak as mutual knowledge of level 1 is sufficient to significantly increase the salience of the efficient equilibrium with respect to the absence of advice. Furthermore, and contrary to our hypothesis, mutual knowledge of level 2 induces, under suitable conditions, successful coordination more frequently than common knowledge
You Better Play 7: Mutual versus Common Knowledge of Advice in a Weak-link Experiment
This paper presents the results of an experiment on mutual versus common knowl- edge of advice in a two-player weak-link game with random matching. Our experimen- tal subjects play in pairs for thirteen rounds. After a brief learning phase common to all treatments, we vary the knowledge levels associated with external advice given in the form of a suggestion to pick the strategy supporting the payoff-dominant equilib- rium. In the mutual knowledge of level 1 treatment, the suggestion appears on every subject's monitor at the beginning of every round, with no common knowledge that everybody sees the same suggestion. In the mutual knowledge of level 2 treatment, the same suggestion appears on each subject's monitor, accompanied by the request to "send" the suggestion to the partner in the round, followed by a notification that the message has been read. Finally, in the common knowledge treatment, the suggestion is read aloud by the experimenter at the end of the learning phase. Our results are somewhat surprising and can be summarized as follows: in all our treatments both the choice of the efficiency-inducing action and the percentage of efficient equilibrium play are higher with respect to the control treatment, revealing that even a condition as weak as mutual knowledge of level 1 is sufficient to significantly increase the salience of the efficient equilibrium with respect to the absence of advice. Furthermore, and contrary to our hypothesis, mutual knowledge of level 2 (as the one occurring in our "message" treatment) induces successful coordination more frequently than common knowledge.Coordination games; experimental philosophy; epistemic attitudes, weak-link game; conventions
You Better Play 7: Mutual versus Common Knowledge of Advice in a Weak-link Experiment
This paper presents the results of an experiment on mutual versus common knowl- edge of advice in a two-player weak-link game with random matching. Our experimen- tal subjects play in pairs for thirteen rounds. After a brief learning phase common to all treatments, we vary the knowledge levels associated with external advice given in the form of a suggestion to pick the strategy supporting the payo-dominant equilib- rium. In the mutual knowledge of level 1 treatment, the suggestion appears on every subject's monitor at the beginning of every round, with no common knowledge that everybody sees the same suggestion. In the mutual knowledge of level 2 treatment, the same suggestion appears on each subject's monitor, accompanied by the request to "send" the suggestion to the partner in the round, followed by a notication that the message has been read. Finally, in the common knowledge treatment, the suggestion is read aloud by the experimenter at the end of the learning phase. Our results are somewhat surprising and can be summarized as follows: in all our treatments both the choice of the efficiency-inducing action and the percentage of e cient equilibrium play are higher with respect to the control treatment, revealing that even a condition as weak as mutual knowledge of level 1 is sufficient to signicantly increase the salience of the e cient equilibrium with respect to the absence of advice. Furthermore, and contrary to our hypothesis, mutual knowledge of level 2 (as the one occurring in our "message" treatment) induces successful coordination more frequently than common knowledge.Coordination games; experimental philosophy; epistemic attitudes, weak-link game; conventions
EPISTEMIC FOUNDATIONS OF SOLUTION CONCEPTS IN GAME THEORY: AN INTRODUCTION
We give an introduction to the literature on the epistemic foundations of solution concepts in game theory. Only normal-form games are considered. The solution concepts analyzed are rationalizability, strong rationalizability, correlated equilibrium and Nash equilibrium. The analysis is carried out locally in terms of properties of the belief hierarchies. Several examples are used throughout to illustrate definitions and concepts.
Elicited Bid Functions in a (a)Symmetric First-Price Auctions
We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders.To study the extent of strategic behavior, we use an experimental design that elicits bidders complete bid functions in each round (auction) of the experiment.In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller s revenues and deviations from equilibrium).However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.auctions;bidding;strategy;behavioural science;general equilibrium;risk
Elicited bid functions in (a)symmetric first-price auctions
We report on a series of experiments that examine bidding behavior in first-price sealed bid auctions with symmetric and asymmetric bidders. To study the extent of strategic behavior, we use an experimental design that elicits bidders' complete bid functions in each round (auction) of the experiment. In the aggregate, behavior is consistent with the basic equilibrium predictions for risk neutral or homogenous risk averse bidders (extent of bid shading, average seller's revenues and deviations from equilibrium). However, when we look at the extent of best reply behavior and the shape of bid functions, we find that individual behavior is not in line with the received equilibrium models, although it exhibits strategic sophistication.Asymmetric first-price auctions, private independent values, elicited bid functions, constant relative risk aversion, empirical best replies, experimental methods
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