Voluntary Participation in a Mechanism Implementing a Public Project

In this study, a participation game in a mechanism to implement a public project is considered; in this game, agents decide simultaneously whether they will participate in the mechanism or not. We characterize the sets of participants at strict Nash equilibria, strong equilibria, and coalition-proof equilibria of the participation game. The three sets of equilibria are shown to coincide and exist. All the equilibrium allocations are Pareto efficient at any one of three notions of equilibria. However, if the public good can be provided in multiple units or if there are multiple projects, then these sets may fail to coincide.Participation game, Public project, Strong equilibrium, Coalition-proof equilibrium, Multi-unit public good, Multiple projects

What factors determine the number of trading partners?

The purpose of the paper is to provide a simple model explaining buyer-supplier relationships and show what factors determine the number of trading partners. We show that when the supplier is able to determine the number of trading partners, the optimal number is small if the supplier's bargaining power with them is weak, the economy of scope in the supplier's variable costs is significant, and that in its sunk investment is weak. Investment may be greater when the number of trading partners is small. The results may be consistent with the formation of Japanese buyer-supplier relations.

Coalition-proofness and dominance relations

We show that, if a game satisfies the conditions of anonymity, monotone externality, and strategic substitutability, then the set of coalition-proof Nash equilibria under strict domination contains that under weak domination.ArticleEconomics Letters. 89(2):174-179 (2005)journal articl

Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

September 2015. Revised August 2017

The efficiency of monopolistic provision of public goods through simultaneous bilateral bargaining

We examine a monopolistic supplier's decision about a pure public good when he/she must negotiate with beneficiaries of the good. In our model, while the level of the public good is decided unilaterally by the supplier, the cost share of the public good is negotiated between the supplier and beneficiaries. Our bargaining model is built on simultaneous bilateral bargaining and the bargaining power of the supplier is a key factor for the analysis. We show that under some mild conditions, the supplier produces the public good at a Pareto-efficient level in equilibrium if and only if his/her bargaining power is sufficiently weak. In addition, under some reasonable parametric functions, we show that the equilibrium likelihood of the efficient provision of the public good diminishes as the number of beneficiaries increases. We show by a numerical example that the source of the inefficient provision of the public good when the supplier's bargaining power is sufficiently strong may be the excessive supply of the public good

Private provision of public goods that are complements for private goods: Application to open source software developments

This paper examines the questions of who participates in the provision of a public good through the voluntary participation of agents in the presence of strong complementarity between a public good and a private good. We show that the greater the initial endowment of the private good that agents have, the more likely they are to participate in the provision of the public good. Whether an agent participates does not depend on the efficiency of his/her technology for production of the public good. We extend the basic model and introduce a simple transfer game. We show a sufficient condition so that the voluntary transfer scheme achieves Pareto efficiency

Coalitional equilibria in non-cooperative games with strategic substitutes : Self-enforcing coalition deviations and irreversibility

Introducing a coalitional equilibrium with restricted deviations, we examine how effectively equilibria based on coalitional stability refine Nash equilibria in games with σ-strategic substitutes and σ-monotone externalities. From the existing equilibria such as coalition-proof Nash equilibria and near-strong Nash equilibria, we can consider several ways to restrict coalitional deviations. We incorporate two natural self-enforcing conditions of coalition deviations, Nash stability and irreversibility, into the coalitional equilibrium and provide a more general analysis than earlier studies. We find it impossible that in each of the two stability concepts, the coalitional equilibrium effectively refines the Nash equilibrium for all games with σ-strategic substitutes and σ-monotone externalities

Coalition-proof Nash equilibria and weakly dominated strategies in aggregative games with strategic substitutes : A note

We examine the relation between coalition-proof Nash equilibrium (Bernheim et al., 1987) and weakly dominated strategies in games with strategic substitutes (SS) and monotone externalities (ME). We show that in σ-interactive games with SS and ME, every coalition-proof Nash equilibrium is a Nash equilibrium with undominated strategies. We also find as a by-product that the set of Nash equilibria coincides with the set of undominated Nash equilibria in those games. The relation between the coalition-proof Nash equilibrium and weakly dominated strategies in games with SS is completely different from that in games with strategic complements