43 research outputs found
Inner Core, Asymmetric Nash Bargaining Solutions and Competitive Payoffs
We investigate the relationship between the inner core and asymmetric Nash bargaining solutions for n-person bargaining games with complete information. We show that the set of asymmetric Nash bargaining solutions for different strictly positive vectors of weights coincides with the inner core if all points in the underlying bargaining set are strictly positive. Furthermore, we prove that every bargaining game is a market game. By using the results of Qin (1993) we conclude that for every possible vector of weights of the asymmetric Nash bargaining solution there exists an economy that has this asymmetric Nash bargaining solution as its unique competitive payoff vector. We relate the literature of Trockel (1996, 2005) with the ideas of Qin (1993). Our result can be seen as a market foundation for every asymmetric Nash bargaining solution in analogy to the results on non-cooperative foundations of cooperative games.Inner Core, Asymmetric Nash Bargaining Solution, Competitive Payoffs, Market Games
Stability of Coalitional Equilibria within Repeated Tax Competition
This paper analyzes the stability of capital tax harmonization agree- ments in a stylized model where countries have formed coalitions which set a common tax rate in order to avoid the inefficient fully non- cooperative Nash equilibrium. In particular, for a given coalition struc- ture we study to what extend the stability of tax agreements is affected by the coalitions that have formed. In our set-up, countries are sym- metric, but coalitions can be of arbitrary size. We analyze stability by means of a repeated game setting employing simple trigger strategies and we allow a sub-coalition to deviate from the coalitional equilib- rium. For a given form of punishment we are able to rank the stability of different coalition structures as long as the size of the largest coali- tion does not change. Our main results are: (1) singleton regions have the largest incentives to deviate, (2) the stability of cooperation de- pends on the degree of cooperative behavior ex-ante.capital tax competition, tax coordination, coalitional equilibria, repeated game
Competitive Outcomes and the Inner Core of NTU Market Games
We consider the inner core as a solution concept for cooperative games with non-transferable utility (NTU) and its relationship to competitive equilibria of markets that are induced by an NTU game. We investigate the relationship between certain subsets of the inner core for NTU market games and competitive payoff vectors of markets linked to the NTU market game. This can be considered as the case in between the two extreme cases of Qin (1993). We extend the results of Qin (1993) to a large class of closed subsets of the inner core: Given an NTU market game we construct a market depending on a given closed subset of its inner core. This market represents the game and further has the given set as the set of payoffs of competitive equilibria. It turns out that this market is not determined uniquely and thus we obtain a class of markets with the desired property.Market Games, Competitive Payoffs, Inner Core
Learning in Infinite Horizon Strategic Market Games with Collateral and Incomplete Information
Brangewitz S, Giraud G. Learning in Infinite Horizon Strategic Market Games with Collateral and Incomplete Information. Working Papers. Institute of Mathematical Economics. Vol 456. Bielefeld: Center for Mathematical Economics; 2011.We study a strategic market game with finitely many traders, infinite horizon
and real assets. To this standard framework (see, e.g. Giraud and Weyers, 2004)
we add two key ingredients: First, default is allowed at equilibrium by means of
some collateral requirement for financial assets; second, information among players
about the structure of uncertainty is incomplete. We focus on learning equilibria,
at the end of which no player has incorrect beliefs — not because those players with
heterogeneous beliefs were eliminated from the market (although default is possible
at equilibrium) but because they have taken time to update their prior belief. We
then prove a partial Folk theorem `a la Wiseman (2011) of the following form: For any
function that maps each state of the world to a sequence of feasible and sequentially
strictly individually rational allocations, and for any degree of precision, there is a
perfect Bayesian equilibrium in which patient players learn the realized state with
precision and achieve a payoff close to the one specified for each state
Inner Core, Asymmetric Nash Bargaining Solutions and Competitive Payoffs
Brangewitz S, Gamp J-P. Inner Core, Asymmetric Nash Bargaining Solutions and Competitive Payoffs. Working Papers. Institute of Mathematical Economics. Vol 453. Bielefeld: Center for Mathematical Economics; 2011.We investigate the relationship between the inner core and asymmetric Nash
bargaining solutions for n-person bargaining games with complete information. We
show that the set of asymmetric Nash bargaining solutions for different strictly
positive vectors of weights coincides with the inner core if all points in the underlying
bargaining set are strictly positive. Furthermore, we prove that every bargaining
game is a market game. By using the results of Qin (1993) we conclude that for
every possible vector of weights of the asymmetric Nash bargaining solution there
exists an economy that has this asymmetric Nash bargaining solution as its unique
competitive payoff vector. We relate the literature of Trockel (1996, 2005) with
the ideas of Qin (1993). Our result can be seen as a market foundation for every
asymmetric Nash bargaining solution in analogy to the results on non-cooperative
foundations of cooperative games
Competitive outcomes and the inner core of NTU market games
Brangewitz S, Gamp J-P. Competitive outcomes and the inner core of NTU market games. Working Papers. Institute of Mathematical Economics. Vol 449. Bielefeld: Center for Mathematical Economics; 2011.We consider the inner core as a solution concept for cooperative games with non-
transferable utility (NTU) and its relationship to competitive equilibria of markets
that are induced by an NTU game. We investigate the relationship between certain
subsets of the inner core for NTU market games and competitive payoff vectors of
markets linked to the NTU market game. This can be considered as the case in
between the two extreme cases of Qin (1993). We extend the results of Qin (1993)
to a large class of closed subsets of the inner core: Given an NTU market game
we construct a market depending on a given closed subset of its inner core. This
market represents the game and further has the given set as the set of payoffs of
competitive equilibria. It turns out that this market is not determined uniquely and
thus we obtain a class of markets with the desired property
Asymmetric dominance effect with multiple decoys for low- and high-variance lotteries
Sürücü O, Brangewitz S, Mir Djawadi B. Asymmetric dominance effect with multiple decoys for low- and high-variance lotteries. Center for Mathematical Economics Working Papers. Vol 574. Bielefeld: Center for Mathematical Economics; 2017.The asymmetric dominance effect refers to the phenomenon according to which the choice
probability of an alternative increases when an inferior alternative - the decoy - is included
into the choice set. The objective of this experimental study is twofold. First, we investigate
the asymmetric dominance effect on two-outcome lotteries with almost equal expected values.
We find that the impact of a decoy on low-variance lotteries (LVLs) is much higher than on
high-variance lotteries (HVLs). Second, we examine the asymmetric dominance effect in the
presence of two decoys. While the asymmetric dominance effect persists when the choice
set includes two decoys, the effect is not always further enhanced compared to the setting
with one decoy and again much stronger for LVLs than for HVLs. Controlling for subjects’
degrees of risk aversion, we find support for consistency between individual risk preferences
and choice behavior among the lotteries. However, we observe decoy effects of equal strength
irrespective of the subjects’ degree of risk aversion. Thus, our analysis indicates that to a
substantial extent the presence of decoys subtly makes decision-makers choose against their
risk preferences by favoring lotteries that entail risks contrary to their elicited individual
risk-taking profile
Coalitional and strategic market games
Brangewitz S. Coalitional and strategic market games. Bielefeld: Universität Bielefeld; 2012.This thesis consists of two main parts: The first one is on coalitional market games whereas the second one is on strategic market games. In coalitional market games the relationship between cooperative games and markets, and their respective solution concepts are investigated. In joint work with Jan-Philip Gamp we show the following results: For coalitional market games with transferable utility we present a detailed proof that extends the results of Shapley and Shubik (1975) to any closed convex subset of the core following a remark of these authors.
For coalitional market games with non-transferable utility we extend the results of Qin (1993) to a large class of closed subsets of the inner core. Afterwards, we investigate the relationship between the inner core and asymmetric Nash bargaining solutions.
A strategic market game is a non-cooperative game that is used to describe the price formation in an exchange economy. In this thesis the departing point is the model in Giraud and Weyers (2004). For strategic market games with finite horizon, I show proving an analogue of a perfect folk theorem that even with collateral requirements almost everything is possible as soon as people are sufficiently patient. Finally, in joint work with Gaël Giraud, for strategic market games with infinite horizon and incomplete information we prove a partial folk theorem à la Wiseman (2011)
Stability of coalitional equilibria within repeated tax competition
Brangewitz S, Brockhoff S. Stability of coalitional equilibria within repeated tax competition. Working Papers. Institute of Mathematical Economics. Vol 461. Bielefeld: Center for Mathematical Economics; 2012.This paper analyzes the stability of capital tax harmonization agreements in a stylized model where countries have formed coalitions which set a common tax rate in order to avoid the inefficient fully noncooperative Nash equilibrium. In particular, for a given coalition structure we study to what extend the stability of tax agreements is affected by the coalitions that have formed. In our set-up, countries are symmetric, but coalitions can be of arbitrary size. We analyze stability by means of a repeated game setting employing simple trigger strategies and we allow a sub-coalition to deviate from the coalitional equilibrium.
For a given form of punishment we are able to rank the stability of different coalition structures as long as the size of the largest coalition does not change. Our main results are: (1) singleton regions have the largest incentives to deviate, (2) the stability of cooperation depends on the degree of cooperative behavior ex-ante
Competitive outcomes and the core of TU market games
Brangewitz S, Gamp J-P. Competitive outcomes and the core of TU market games. Working Papers. Institute of Mathematical Economics. Vol 454. Bielefeld: Center for Mathematical Economics; 2011.We investigate the relationship between certain subsets of the core for TU market games and competitive payoff vectors of certain markets linked to that game. This
can be considered as the case in between the two extreme cases of Shapley and Shubik (1975). They remark already that their result can be extended to any closed convex subset of the core, but they omit the details of the proof which we present here. This more general case is in particular interesting, as the two theorems of
Shapley and Shubik (1975) are included as special cases