Many two-sided matching situations involve multiperiod interaction. Traditional cooperative solutions, such as stability and the core, often identify unintuitive outcomes (or are empty) when applied to such markets. As an alternative, this study proposes the criterion of perfect alpha-stability. An outcome is perfect alpha-stable if no coalition prefers an alternative assignment in any period that is superior for all plausible market continuations. Behaviorally, the solution combines foresight about the future and a robust evaluation of contemporaneous outcomes. A perfect alpha-stable matching exists, even when preferences exhibit inter-temporal complementarities. A stronger solution, the perfect alpha-core, is also investigated. Extensions to markets with arrivals and departures, transferable utility, and many-to-one assignments are proposed.
{"title":"A Perfectly Robust Approach to Multiperiod Matching Problems","authors":"M. Kotowski","doi":"10.2139/ssrn.3384807","DOIUrl":"https://doi.org/10.2139/ssrn.3384807","url":null,"abstract":"Many two-sided matching situations involve multiperiod interaction. Traditional cooperative solutions, such as stability and the core, often identify unintuitive outcomes (or are empty) when applied to such markets. As an alternative, this study proposes the criterion of perfect alpha-stability. An outcome is perfect alpha-stable if no coalition prefers an alternative assignment in any period that is superior for all plausible market continuations. Behaviorally, the solution combines foresight about the future and a robust evaluation of contemporaneous outcomes. A perfect alpha-stable matching exists, even when preferences exhibit inter-temporal complementarities. A stronger solution, the perfect alpha-core, is also investigated. Extensions to markets with arrivals and departures, transferable utility, and many-to-one assignments are proposed.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122046813","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Daniel L. Chen, Astrid Hopfensitz, Boris van Leeuwen, Jeroen van de Ven
The emotion that someone expresses has consequences for how that person is treated. We study whether people display emotions strategically. In two laboratory experiments, participants play task delegation games in which managers assign a task to one of two workers. When assigning the task, managers see pictures of the workers and we vary whether getting the task is desirable or not. We find that workers strategically adapt their emotional expressions to the incentives they face, and that it indeed pays off to do so. Yet, workers do not exploit the full potential of the strategic display of emotions.
{"title":"The Strategic Display of Emotions","authors":"Daniel L. Chen, Astrid Hopfensitz, Boris van Leeuwen, Jeroen van de Ven","doi":"10.2139/ssrn.3380316","DOIUrl":"https://doi.org/10.2139/ssrn.3380316","url":null,"abstract":"The emotion that someone expresses has consequences for how that person is treated. We study whether people display emotions strategically. In two laboratory experiments, participants play task delegation games in which managers assign a task to one of two workers. When assigning the task, managers see pictures of the workers and we vary whether getting the task is desirable or not. We find that workers strategically adapt their emotional expressions to the incentives they face, and that it indeed pays off to do so. Yet, workers do not exploit the full potential of the strategic display of emotions.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128742062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 2026, the FIFA World Cup will for the first time gather 48 men’s national teams. It will consist of a group stage made of 16 groups of three, with the best two teams in each group advancing to the knockout stage. Using groups of three raises several fairness issues, including the risk of match fixing and schedule imbalance. In this article we examine the risk of collusion. The two teams who play the last game in the group know exactly what results will let them advance to the knockout stage. Risk of match fixing occurs when a result qualifies both of them at the expense of the third team of the group, and can seriously tarnish the tournament. We quantify how often this is expected to happen and explain how to build the match schedule so as to minimize the risk of collusion. We also quantify how the risk of collusion depends on competitive balance. Moreover, we show that forbidding draws during the group stage (a rule considered by FIFA) does not eliminate the risk of match fixing, and that, surprisingly, the 3-2-1-0 point system does not do a better job at decreasing the risk of collusion than the 3-0 point system. Finally we describe alternate formats for a 48-team World Cup that would eliminate or strongly decrease the risk of collusion.
{"title":"Risk of Collusion: Will Groups of 3 Ruin the FIFA World Cup?","authors":"Julien Guyon","doi":"10.2139/ssrn.3190779","DOIUrl":"https://doi.org/10.2139/ssrn.3190779","url":null,"abstract":"In 2026, the FIFA World Cup will for the first time gather 48 men’s national teams. It will consist of a group stage made of 16 groups of three, with the best two teams in each group advancing to the knockout stage. Using groups of three raises several fairness issues, including the risk of match fixing and schedule imbalance. In this article we examine the risk of collusion. The two teams who play the last game in the group know exactly what results will let them advance to the knockout stage. Risk of match fixing occurs when a result qualifies both of them at the expense of the third team of the group, and can seriously tarnish the tournament. We quantify how often this is expected to happen and explain how to build the match schedule so as to minimize the risk of collusion. We also quantify how the risk of collusion depends on competitive balance. Moreover, we show that forbidding draws during the group stage (a rule considered by FIFA) does not eliminate the risk of match fixing, and that, surprisingly, the 3-2-1-0 point system does not do a better job at decreasing the risk of collusion than the 3-0 point system. Finally we describe alternate formats for a 48-team World Cup that would eliminate or strongly decrease the risk of collusion.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114172217","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mining application-specific integrated circuit (ASIC) is an essential facility for mining in Proof-of-Work (PoW) based blockchain systems. This paper regards ASIC as a financial asset and proposes a theoretical estimate of the pricing of ASIC. We show that the payouts from ASIC can be replicated by an integral of European call options. Hence, the value of ASIC is increasing in the volatility of the cryptocurrency price. Our results imply that miners may prefer to keep the high volatility to maintain the value of their ASIC; thus, they may refuse the proposals and innovations for stabilizing the price. In this sense, the high volatility of the PoW-based cryptocurrency price might be intrinsic.
{"title":"Pricing of Mining ASIC and Its Implication to the High Volatility of Cryptocurrency Prices","authors":"Yoshinori Hashimoto, Shunya Noda","doi":"10.2139/ssrn.3368286","DOIUrl":"https://doi.org/10.2139/ssrn.3368286","url":null,"abstract":"Mining application-specific integrated circuit (ASIC) is an essential facility for mining in Proof-of-Work (PoW) based blockchain systems. This paper regards ASIC as a financial asset and proposes a theoretical estimate of the pricing of ASIC. We show that the payouts from ASIC can be replicated by an integral of European call options. Hence, the value of ASIC is increasing in the volatility of the cryptocurrency price. Our results imply that miners may prefer to keep the high volatility to maintain the value of their ASIC; thus, they may refuse the proposals and innovations for stabilizing the price. In this sense, the high volatility of the PoW-based cryptocurrency price might be intrinsic.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130429833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the impact of vertical integration on the timing of adoption of a cost-reducing technology. Combining the technology adoption and vertical relations literatures in a simple duopoly model, I compare the technology adoption patterns under different vertical structures. In particular, the study of the asymmetric case, where one firm is integrated while the other one is separated, allows me to make three main contributions. First, I show that the effect of vertical integration on technology adoption by one firm is influenced significantly by the vertical structure of the other firm. Second, I consider the two main types of technology adoption games under an asymmetric set-up and broaden the understanding of the underlying mechanisms for the solving of such games. Finally, I develop an industrial policy aimed at encouraging firms to adopt the technology at the socially optimal timing.
{"title":"Technology Adoption Under Asymmetric Market Structure","authors":"Benoît Voudon","doi":"10.2139/ssrn.3358294","DOIUrl":"https://doi.org/10.2139/ssrn.3358294","url":null,"abstract":"This paper examines the impact of vertical integration on the timing of adoption of a cost-reducing technology. Combining the technology adoption and vertical relations literatures in a simple duopoly model, I compare the technology adoption patterns under different vertical structures. In particular, the study of the asymmetric case, where one firm is integrated while the other one is separated, allows me to make three main contributions. First, I show that the effect of vertical integration on technology adoption by one firm is influenced significantly by the vertical structure of the other firm. Second, I consider the two main types of technology adoption games under an asymmetric set-up and broaden the understanding of the underlying mechanisms for the solving of such games. Finally, I develop an industrial policy aimed at encouraging firms to adopt the technology at the socially optimal timing.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134057557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The standard model of sequential capacity choices is the Stackelberg quantity leadership model with linear demand. I show that under the standard assumptions, leaders' actions are informative about market conditions and independent of leaders' beliefs about the arrivals of followers. However, this Stackelberg independence property relies on all standard assumptions being satisfied. It fails to hold whenever the demand function is non-linear, marginal cost is not constant, goods are differentiated, firms are non-identical, or there are any externalities. I show that small deviations from the linear demand assumption may make the leaders' choices completely uninformative.
{"title":"Stackelberg Independence","authors":"Toomas Hinnosaar","doi":"10.2139/ssrn.3350109","DOIUrl":"https://doi.org/10.2139/ssrn.3350109","url":null,"abstract":"The standard model of sequential capacity choices is the Stackelberg quantity leadership model with linear demand. I show that under the standard assumptions, leaders' actions are informative about market conditions and independent of leaders' beliefs about the arrivals of followers. However, this Stackelberg independence property relies on all standard assumptions being satisfied. It fails to hold whenever the demand function is non-linear, marginal cost is not constant, goods are differentiated, firms are non-identical, or there are any externalities. I show that small deviations from the linear demand assumption may make the leaders' choices completely uninformative.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115797203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We intend to solve the uniqueness problem of equilibria for all games. We introduce a new rationality criterion for games, which rules out many equilibria. Our selection principle is based on the argument that since the players know the set of potential equilibria of a game, they will actively select an equilibrium in their own interest. We show the existence and uniqueness of the selectable equilibrium. We also propose a selection mechanism by which all selectable equilibria can be identified.
{"title":"The Selection Principle in Games","authors":"Susheng Wang","doi":"10.2139/ssrn.3754141","DOIUrl":"https://doi.org/10.2139/ssrn.3754141","url":null,"abstract":"We intend to solve the uniqueness problem of equilibria for all games. We introduce a new rationality criterion for games, which rules out many equilibria. Our selection principle is based on the argument that since the players know the set of potential equilibria of a game, they will actively select an equilibrium in their own interest. We show the existence and uniqueness of the selectable equilibrium. We also propose a selection mechanism by which all selectable equilibria can be identified.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116450388","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the procedural egalitarian solution on the class of egalitarian stable games. By deriving several axiomatic characterizations involving consistency and monotonicity, we show that the procedural egalitarian solution satisfies various desirable properties and unites many egalitarian concepts defined in the literature. Moreover, we illustrate the computational implications of these characterizations and relate the class of egalitarian stable games to other well-known classes.
{"title":"Monotonicity and Egalitarianism","authors":"Bas J. Dietzenbacher","doi":"10.2139/ssrn.3346971","DOIUrl":"https://doi.org/10.2139/ssrn.3346971","url":null,"abstract":"This paper studies the procedural egalitarian solution on the class of egalitarian stable games. By deriving several axiomatic characterizations involving consistency and monotonicity, we show that the procedural egalitarian solution satisfies various desirable properties and unites many egalitarian concepts defined in the literature. Moreover, we illustrate the computational implications of these characterizations and relate the class of egalitarian stable games to other well-known classes.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124719246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider strategic issues in one-to-one matching with externalities. We show that no core (stable) mechanism is strategy-proof, extending an impossibility result of [Roth, A. E. [1982] The economics of matching: Stability and incentives, Math. Oper. Res. 7(4), 617–628] obtained in the absence of externalities. Moreover, we show that there are no limits on successful manipulation of preferences by coalitions of men and women, in contrast with the result of [Demange, G., Gale, D. and Sotomayor, M. [1987] A further note on the stable matching problem, Discrete Appl. Math. 16(3), 217–222] obtained in the absence of externalities.
我们考虑战略问题与外部性的一对一匹配。我们证明没有核心(稳定)机制是策略证明的，扩展了[Roth, A. E.[1982]的不可能结果。③。Res. 7(4)， 617-628]在没有外部性的情况下获得。此外，我们表明，与Demange, G.， Gale, D.和Sotomayor, M.[1987]的结果相比，男女联盟对偏好的成功操纵是没有限制的。数学，16(3)，217-222]在没有外部性的情况下得到。
{"title":"Strategic Issues in One-to-One Matching with Externalities","authors":"Ayse Mumcu, Ismail Saglam","doi":"10.2139/ssrn.3506016","DOIUrl":"https://doi.org/10.2139/ssrn.3506016","url":null,"abstract":"We consider strategic issues in one-to-one matching with externalities. We show that no core (stable) mechanism is strategy-proof, extending an impossibility result of [Roth, A. E. [1982] The economics of matching: Stability and incentives, Math. Oper. Res. 7(4), 617–628] obtained in the absence of externalities. Moreover, we show that there are no limits on successful manipulation of preferences by coalitions of men and women, in contrast with the result of [Demange, G., Gale, D. and Sotomayor, M. [1987] A further note on the stable matching problem, Discrete Appl. Math. 16(3), 217–222] obtained in the absence of externalities.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129283799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a multi-project contract environment with a single agent who is subject to limited liability, the optimality of performance bundling across all projects is well established: The agent should be rewarded only if all projects are successful. In this paper, we study performance bundling across multiple competitions between two (possibly asymmetric) players. We find that in addition to a beneficial cost-saving effect that diminishes with asymmetry across players, performance bundling causes a counterproductive unbalancing effect, which intensifies with this asymmetry. Thus, performance bundling is desirable only if the players are sufficiently symmetric. Otherwise, a set of independent contests is optimal.
{"title":"Performance Bundling Across Multiple Competitions","authors":"Jingfeng Lu, Bo Shen, Zhewei Wang","doi":"10.2139/ssrn.3361481","DOIUrl":"https://doi.org/10.2139/ssrn.3361481","url":null,"abstract":"In a multi-project contract environment with a single agent who is subject to limited liability, the optimality of performance bundling across all projects is well established: The agent should be rewarded only if all projects are successful. In this paper, we study performance bundling across multiple competitions between two (possibly asymmetric) players. We find that in addition to a beneficial cost-saving effect that diminishes with asymmetry across players, performance bundling causes a counterproductive unbalancing effect, which intensifies with this asymmetry. Thus, performance bundling is desirable only if the players are sufficiently symmetric. Otherwise, a set of independent contests is optimal.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116489910","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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