Liberalising Gambling Markets: Lessons from Network Industries?

This paper, based on my concluding remarks at the “Colloquium on the Economic Aspects of Gambling Regulation: EU and US Perspectives” held at Tilburg in November 2006, discusses the question why, in Europe, some service sectors (such as network industries) are liberalised, while others (like the gambling sector) are not. In both, the discussion appears to be one-sided. In the former, the focus is on consumer benefits, where in the latter, only the possible consumer harm associated with liberalisation is discussed. A proper balancing of costs and benefits can, and should, be subsumed under the ECJ’s proportionality test, as formulated in Gambelli. If this more economic approach is taken, the result might very well be less restrictive policy towards gambling and games of chance.Gambling;market liberalisation;EU internal market

Oskar Morgenstern

game theory;cooperative games;Nash equilibrium;noncooperative games;utility theory

Non-cooperative Games

Non-cooperative games are mathematical models of interactive strategic decision situations.In contrast to cooperative models, they build on the assumption that all possibilities for commitment and contract have been incorporated in the rules of the game.This contribution describes the main models (games in normal form, and games in extensive form), as well as the main concepts that have been proposed to solve these games.Solution concepts predict the outcomes that might arise when the game is played by "rational" individuals, or after learning processes have converged.Most of these solution concepts are variations of the equilibrium concept that was proposed by John Nash in the 1950s, a Nash equilibrium being a combination of strategies such that no player can improve his payoff by deviating unilaterally.The paper also discusses the justifications of these concepts and concludes with remarks about the applicability of game theory in contexts where players are less than fully rational.noncooperative games

The Dutch DCS-1800 Auction

In February 1998 the Dutch government auctioned licences to operate mobile telecommunications networks according to the DCS-1800 technology. Two “national” licences and sixteen “regional” ones were auctioned by using a variant of the simultaneous, multiple round auction that was proposed by US-economists and that had been tested in the US. This paper describes how the decision to auction came about, it details the auction rules, and it analyzes the resulting outcomes.Telecommunications;Auctions;Regulation

Evolutionary game theory

Game Theory