Distribution-Valued Solution Concepts

Under its conventional positive interpretation, game theory predicts that the mixed strategy pro?le of players in a noncooperative game will satisfy some setvalued solution concept. Relative probabilities of pro?les in that set are unspeci?ed, and all pro?les not satisfying it are implicitly assigned probability zero. However the axioms underlying Bayesian rationality say that we should reason about player behavior using a probability density over all mixed strategy pro?les, not using a subset of all such pro?les. Such a density over pro?les can be viewed as a solution concept that is distribution-valued rather than set-valued. A distribution-valued concept provides a best single prediction for any noncooperative game, i.e., a universal re?nement. In addition, regulators can use a distribution-valued solution concept to make Bayes optimal choices of a mechanism, as required by Savage's axioms. In particular, they can do this in strategic situations where conventional mechanism design cannot provide advice. We illustrate all of this on a Cournot duopoly game.Quantal Response Equilibrium, Bayesian Statistics, Entropic prior, Maximum entropy JEL Codes: C02, C11, C70, C72

A theory of unstructured bargaining using distribution-valued solution concepts

In experiments it is typically found that many joint utility outcomes arise in any given unstructured bargaining game. This suggests using a positive unstructured bargaining concept that maps a bargaining game to a probability distribution over outcomes rather than to a single outcome. We show how to "translate" Nash's bargaining axioms to apply to such distributional bargaining concepts. We then prove that a subset of those axioms forces the distribution over outcomes to be a power-law. Unlike Nash's original result, our result holds even if the feasible set is finite. When the feasible set is convex and comprehensive, the mode of the power law distribution is the Harsanyi bargaining solution, and if we require symmetry it is the Nash bargaining solution. However in general these modes of the joint utility distribution are not Bayes-optimal predictions for the joint uitlity, nor are the bargains corresponding to those outcomes the most likely bargains. We then show how an external regulator can use distributional solution concepts to optimally design an unstructured bargaining scenario. Throughout we demonstrate our analysis in computational experiments involving flight rerouting negotiations in the National Airspace System.JEL Codes:

Analyzing Policy Risk and Accounting for Strategy: Auctions in the National Airspace System

We examine the potential for simple auction mechanisms to efficiently allocate arrival and departure slots during Ground Delay Programs (GDPs). The analysis is conducted using a new approach to predicting strategic behavior called Predictive Game Theory (PGT). The difference between PGT and the familiar Equilibrium Concept Approach (ECA) is that PGT models produce distribution-valued solut tion concepts rather than set-valued ones. The advantages of PGT over ECA in policy analysis and design are that PGT allows for decision-theoretic prediction and policy evaluation. Furthermore, PGT allows for a comprehensive account of risk, including two types of risk, systematic and modeling, that cannot be considered with the ECA. The results show that the second price auction dominates the first price auction in many decision-relevant categories, including higher expected efficiency, lower variance in efficiency, lower probability of significant efficiency loss and higher probability of significant efficiency gain. These findings are despite the fact that there is no a priori reason to expect the second price auction to be more efficient because none of the conventional reasons for preferring second price over first price auctions, i.e. dominant strategy implementability, apply to the GDP slot auction setting.auction, ground delay program, entropy, predictive game theory, strategic risk

How to Use Decision Theory to Choose Among Mechanisms

We extend a recently introduced approach to the positive problem of game theory, Predictive Game Theory (PGT Wolpert (2008). In PGT, modeling a game results in a probability distribution over possible behavior profiles. This contrasts with the conventional approach where modeling a game results in an equilibrium set of possible behavior profiles. We analyze three PGT models. Two of these are based on the well-known quantal response and epsilon equilibrium concepts, while the third is entirely new to the economics literature. We use a Cournot game to demonstrate how to use our extension of PGT, concentrating on model combination, modeler uncertainty, and mechanism design. In particular, we emphasize how PGT allows a modeler to perform prediction and mechanism design in a manner that is fully consistent with decision theory. We do this even in situations where conventional approaches yield multiple equilibria, an ability that is necessary for a fully decision theoretic mechanism design. Where possible, PGT results are compared against equilibrium set analogs.

Game Mining: How to Make Money from those about to Play a Game

It is known that a player in a noncooperative game can benefit by publicly re- stricting their possible moves before start of play. We show that, more generally, a player may benefit by publicly committing to pay an external party an amount that is contingent on the game's outcome. We explore what happens when external parties (who we call game miners) discover this fact and seek to profit from it by entering an outcome-contingent contract with the players. We analyze various bargaining games between miners and players for determining such an outcome- contingent contract. We establish restrictions on the strategic settings in which a game miner can profit, and bounds on the game miner's profit given various structured bargaining games. These bargaining games include playing the players against one another, as well as allowing the players to pay the miner(s) for exclu- sivity and first-mover advantage. We also establish that when all players can enter contracts with miners, to guarantee the existence of equilibria it is necessary to assume that players can randomize over the contracts they make.

Direct Detection of the Close Companion of Polaris with the Hubble Space Telescope

Polaris, the nearest and brightest classical Cepheid, is a single-lined spectroscopic binary with an orbital period of 30 years. Using the High Resolution Channel of the Advanced Camera for Surveys onboard the Hubble Space Telescope (HST) at a wavelength of ~2255\AA, we have directly detected the faint companion at a separation of 0\farcs17. A second HST observation 1.04 yr later confirms orbital motion in a retrograde direction. By combining our two measures with the spectroscopic orbit of Kamper and an analysis of the Hipparcos and FK5 proper motions by Wielen et al., we find a mass for Polaris Aa of 4.5^{+2.2}_{-1.4} M_\odot--the first purely dynamical mass determined for any Cepheid. For the faint companion Polaris Ab we find a dynamical mass of 1.26^{+0.14}_{-0.07} M_\odot, consistent with an inferred spectral type of F6 V and with the flux difference of 5.4 mag observed at 2255\AA. The magnitude difference at the V band is estimated to be 7.2 mag. Continued HST observations will significantly reduce the mass errors, which are presently still too large to provide critical constraints on the roles of convective overshoot, mass loss, rotation, and opacities in the evolution of intermediate-mass stars. Our astrometry, combined with two centuries of archival measurements, also confirms that the well-known, more distant (18") visual companion, Polaris B, has a nearly common proper motion with that of the Aa,Ab pair. This is consistent with orbital motion in a long-period bound system. The ultraviolet brightness of Polaris B is in accordance with its known F3 V spectral type if it has the same distance as Polaris Aa,Ab.Comment: 31 pages, 12 figures, 6 tables; accepted for publication in the Astronomical Journa

Superconductivity in a Molecular Metal Cluster Compound

Compelling evidence for band-type conductivity and even bulk superconductivity below $T\_{\text{c}}\approx 8$ K has been found in $^{69,71}$Ga-NMR experiments in crystalline ordered, giant Ga$\_{84}$ cluster-compounds. This material appears to represent the first realization of a theoretical model proposed by Friedel in 1992 for superconductivity in ordered arrays of weakly coupled, identical metal nanoparticles.Comment: 5 pages, 4 figure

Cepheid Mass-loss and the Pulsation -- Evolutionary Mass Discrepancy

I investigate the discrepancy between the evolution and pulsation masses for Cepheid variables. A number of recent works have proposed that non-canonical mass-loss can account for the mass discrepancy. This mass-loss would be such that a 5Mo star loses approximately 20% of its mass by arriving at the Cepheid instability strip; a 14Mo star, none. Such findings would pose a serious challenge to our understanding of mass-loss. I revisit these results in light of the Padova stellar evolutionary models and find evolutionary masses are ($17\pm5$)% greater than pulsation masses for Cepheids between 5<M/Mo<14. I find that mild internal mixing in the main-sequence progenitor of the Cepheid are able to account for this mass discrepancy.Comment: 15 pages, 3 figures, ApJ accepte