14,044 research outputs found
Enforcing efficient equilibria in network design games via subsidies
The efficient design of networks has been an important engineering task that
involves challenging combinatorial optimization problems. Typically, a network
designer has to select among several alternatives which links to establish so
that the resulting network satisfies a given set of connectivity requirements
and the cost of establishing the network links is as low as possible. The
Minimum Spanning Tree problem, which is well-understood, is a nice example.
In this paper, we consider the natural scenario in which the connectivity
requirements are posed by selfish users who have agreed to share the cost of
the network to be established according to a well-defined rule. The design
proposed by the network designer should now be consistent not only with the
connectivity requirements but also with the selfishness of the users.
Essentially, the users are players in a so-called network design game and the
network designer has to propose a design that is an equilibrium for this game.
As it is usually the case when selfishness comes into play, such equilibria may
be suboptimal. In this paper, we consider the following question: can the
network designer enforce particular designs as equilibria or guarantee that
efficient designs are consistent with users' selfishness by appropriately
subsidizing some of the network links? In an attempt to understand this
question, we formulate corresponding optimization problems and present positive
and negative results.Comment: 30 pages, 7 figure
Bounds on the Cost of Stabilizing a Cooperative Game
This is the author accepted manuscript. The final version is available from the AI Access Foundation via the DOI in this record.A key issue in cooperative game theory is coalitional stability, usually captured by the
notion of the core—the set of outcomes that are resistant to group deviations. However,
some coalitional games have empty cores, and any outcome in such a game is unstable. We
investigate the possibility of stabilizing a coalitional game by using subsidies. We consider
scenarios where an external party that is interested in having the players work together
offers a supplemental payment to the grand coalition, or, more generally, a particular coalition
structure. This payment is conditional on players not deviating from this coalition
structure, and may be divided among the players in any way they wish. We define the
cost of stability as the minimum external payment that stabilizes the game. We provide
tight bounds on the cost of stability, both for games where the coalitional values are nonnegative
(profit-sharing games) and for games where the coalitional values are nonpositive
(cost-sharing games), under natural assumptions on the characteristic function, such as
superadditivity, anonymity, or both. We also investigate the relationship between the cost
of stability and several variants of the least core. Finally, we study the computational
complexity of problems related to the cost of stability, with a focus on weighted voting
games.DFGEuropean Science FoundationNRF (Singapore)European Research CouncilHorizon 2020 European Research Infrastructure projectIsrael Science FoundationIsrael Ministry of Science and TechnologyGoogle Inter-University Center for Electronic Markets and AuctionsEuropean Social Fund (European Commission)Calabria Regio
Internet Peering as a Network of Relations
We apply results from recent theoretical work on networks of relations to analyze optimal peering strategies for asymmetric ISPs. It is shown that - from a network of relations perspective – ISPs’ asymmetry in bilateral peering agreements need not be a problem, since when these form a closed network, asymmetries are pooled and information transmission is faster. Both these effects reduce the incentives for opportunism in general, and interconnection quality degradation in particular. We also explain why bilateral monetary transfers between asymmetric ISPs (Bilateral Paid Peering), though potentially good for bilateral peering, may have rather negative effects on the sustainability of the overall peering network
The incentives to participate in and the stability of international climate coalitions: a game theoretic approach using the WITCH Model
This paper uses WITCH, an integrated assessment model with a game-theoretic structure, to explore the prospects for, and the stability of broad coalitions to achieve ambitious climate change mitigation action. Only coalitions including all large emitting regions are found to be technically able to meet a concentration stabilisation target below 550 ppm CO2eq by 2100. Once the free-riding incentives of non-participants are taken into account, only a “grand coalition” including virtually all regions can be successful. This grand coalition is profitable as a whole, implying that all countries can gain from participation provided appropriate transfers are made across them. However, neither the grand coalition nor smaller but still environmentally significant coalitions appear to be stable. This is because the collective welfare surplus from cooperation is not found to be large enough for transfers to offset the free-riding incentives of all countries simultaneously. Some factors omitted from the analysis, which might improve coalition stability, include the co-benefits from mitigation action, the costless removal of fossil fuel subsidies, as well as alternative assumptions regarding countries’ bargaining behaviour.Climate policy; Climate coalition; Game theory; Free riding.
LP-based Covering Games with Low Price of Anarchy
We present a new class of vertex cover and set cover games. The price of
anarchy bounds match the best known constant factor approximation guarantees
for the centralized optimization problems for linear and also for submodular
costs -- in contrast to all previously studied covering games, where the price
of anarchy cannot be bounded by a constant (e.g. [6, 7, 11, 5, 2]). In
particular, we describe a vertex cover game with a price of anarchy of 2. The
rules of the games capture the structure of the linear programming relaxations
of the underlying optimization problems, and our bounds are established by
analyzing these relaxations. Furthermore, for linear costs we exhibit linear
time best response dynamics that converge to these almost optimal Nash
equilibria. These dynamics mimic the classical greedy approximation algorithm
of Bar-Yehuda and Even [3]
Vertical and horizontal tax competition in the transport sector
The purpose of this paper is to review the literature dealing with horizontal and vertical tax competition in the transport sector, taking into account the role of transport externalities. Our emphasis throughout is on tax competition between governments, not between private suppliers. For the various different settings (horizontal and vertical competition, parallel and serial networks), we discuss the relevance of tax competition and describe the type of results typically obtained. We further point out the relevance of different types of tax competition for transport policy in a European setting. Finally, we discuss the losses of non-cooperative behaviour of governments.
Endogenous Spillovers under Cournot Rivalry and Co-opetitive Behaviors.
We develop a model of Cournot oligopolists with endogenous R§D spillovers where a specific type of co-opetition is introduced. The two principle factors of R§D spillovers, namely the absorptive capacity and the information-sharing parameter, are assumed to depend positively on the percentage of knowledge the firm chooses to codify and reveal. It is shown that identical firms that are rivals on the final good market do not necessarily choose the lowest level for the spillover parameters. Furthermore, there is some justification for a subsidy to knowledge codification and information-sharing. However, the latter is obtained under conditions on firms' technologies and spillover functions which ensure the emergence of symmetric solutions.cost reduction, endogenous spillovers, information sharing, absorptive capacity, co-opetition
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