Crowdfunding platforms are providing funds to an increasing number of projects, among which many have a strong social/community impact. Under a all-or-nothing program, the success of the investment depends on the ability of a crowd of potential investors to put their funds into the project without an explicit coordination device. With heterogeneous information, such a problem can be analyzed as a typical global game. We assume that signals of at least some agents present a systematic positive bias, driven by positive emotions about projects with high social/community impact. The analysis reveals that if the number of such overenthusiastic persons is large enough, crowdfunding finance might support financially inefficient projects. We then analyze how a monopolistic platform optimally determines transaction fees and unveil the relationship between overenthusiasm and the profit of the platform.
{"title":"Crowdfunding with Overenthusiastic Investors: A Global Game Model","authors":"Damien Besancenot, R. Vranceanu","doi":"10.2139/ssrn.3130923","DOIUrl":"https://doi.org/10.2139/ssrn.3130923","url":null,"abstract":"Crowdfunding platforms are providing funds to an increasing number of projects, among which many have a strong social/community impact. Under a all-or-nothing program, the success of the investment depends on the ability of a crowd of potential investors to put their funds into the project without an explicit coordination device. With heterogeneous information, such a problem can be analyzed as a typical global game. We assume that signals of at least some agents present a systematic positive bias, driven by positive emotions about projects with high social/community impact. The analysis reveals that if the number of such overenthusiastic persons is large enough, crowdfunding finance might support financially inefficient projects. We then analyze how a monopolistic platform optimally determines transaction fees and unveil the relationship between overenthusiasm and the profit of the platform.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134318684","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 propose a theory of linking in long-term relationships based on what information becomes self-evident in equilibrium at the end of a stage game. We obtain a tight bound on the average per-period efficiency loss that must be incurred to enforce a stage-game outcome throughout a T-period repeated game when T is large. Our results apply to all monitoring structures and strategy profiles. They encompass the inefficiency result in Abreu, Milgrom, and Pearce (1991), as well as the approximate-efficiency results in Compte (1998), Obara (2009), and Chan and Zhang (2016).
我们提出了一种长期关系的联系理论，该理论基于在阶段博弈结束时，什么信息在均衡中变得不言自明。我们得到了在T期重复博弈中，当T较大时，为实现阶段博弈结果而必须发生的平均每周期效率损失的紧密边界。我们的结果适用于所有的监测结构和战略概况。它们包括Abreu, Milgrom, and Pearce(1991)的无效率结果，以及Compte (1998)， Obara(2009)和Chan and Zhang(2016)的近似效率结果。
{"title":"Self-Evident Events and the Value of Linking","authors":"Jimmy Chan, Wenzhang Zhang","doi":"10.2139/ssrn.3124195","DOIUrl":"https://doi.org/10.2139/ssrn.3124195","url":null,"abstract":"We propose a theory of linking in long-term relationships based on what information becomes self-evident in equilibrium at the end of a stage game. We obtain a tight bound on the average per-period efficiency loss that must be incurred to enforce a stage-game outcome throughout a T-period repeated game when T is large. Our results apply to all monitoring structures and strategy profiles. They encompass the inefficiency result in Abreu, Milgrom, and Pearce (1991), as well as the approximate-efficiency results in Compte (1998), Obara (2009), and Chan and Zhang (2016).","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126660448","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 introduce noisy belief equilibrium (NBE) for normal-form games in which players best respond to noisy belief realizations. Axioms restrict belief distributions to be unbiased with respect to and responsive to changes in the opponents’ behavior. The axioms impose testable restrictions both within and across games, and we compare these restrictions to those of regular quantal response equilibrium (QRE) in which axioms are placed on the quantal response function as the primitive. NBE can generate similar predictions as QRE in several classes of games. Unlike QRE, NBE is a refinement of rationalizability and invariant to affine transformations of payoffs. (JEL C72, D83, D91)
{"title":"Stochastic Equilibria: Noise in Actions or Beliefs?","authors":"Evan Friedman","doi":"10.2139/ssrn.3112977","DOIUrl":"https://doi.org/10.2139/ssrn.3112977","url":null,"abstract":"We introduce noisy belief equilibrium (NBE) for normal-form games in which players best respond to noisy belief realizations. Axioms restrict belief distributions to be unbiased with respect to and responsive to changes in the opponents’ behavior. The axioms impose testable restrictions both within and across games, and we compare these restrictions to those of regular quantal response equilibrium (QRE) in which axioms are placed on the quantal response function as the primitive. NBE can generate similar predictions as QRE in several classes of games. Unlike QRE, NBE is a refinement of rationalizability and invariant to affine transformations of payoffs. (JEL C72, D83, D91)","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129281663","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}
Pub Date : 2017-10-23DOI: 10.22075/IJNAA.2017.12774.1657
M. Eshaghi Gordji, G. Askari
Maybe an event can't be modeled completely through on game but there is more chance with several games. With emphasis on players' rationality, we present new properties of strategic games, which result in production of other games. Here, a new attitude to modeling will be presented in game theory as dynamic system of strategic games and its some applications such as analysis of the clash between the United States and Iran in Iraq will be provided. In this system with emphasis on players' rationality, the relationship between strategic games and explicitly the dynamics present in interactions among players will be examined. In addition, we introduce a new game called trickery game. This game shows a good reason for the cunning of some people in everyday life. Cooperation is a hallmark of human society. In many cases, our study provides a mechanism to move towards cooperation between players.
{"title":"Dynamic System of Strategic Games","authors":"M. Eshaghi Gordji, G. Askari","doi":"10.22075/IJNAA.2017.12774.1657","DOIUrl":"https://doi.org/10.22075/IJNAA.2017.12774.1657","url":null,"abstract":"Maybe an event can't be modeled completely through on game but there is more chance with several games. With emphasis on players' rationality, we present new properties of strategic games, which result in production of other games. Here, a new attitude to modeling will be presented in game theory as dynamic system of strategic games and its some applications such as analysis of the clash between the United States and Iran in Iraq will be provided. In this system with emphasis on players' rationality, the relationship between strategic games and explicitly the dynamics present in interactions among players will be examined. In addition, we introduce a new game called trickery game. This game shows a good reason for the cunning of some people in everyday life. Cooperation is a hallmark of human society. In many cases, our study provides a mechanism to move towards cooperation between players.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123061993","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}
M. Chambers, Chen Hajaj, Greg Leo, Jian Lou, Martin Van der Linden, Yevgeniy Vorobeychik, M. Wooders
We model decentralized team formation as a game in which players make offers to potential teams whose members then either accept or reject the offers. The games induce no-delay subgame perfect equilibria with unique outcomes that are individually rational and match soulmates. We provide sufficient conditions for equilibria to implement core coalition structures, and show that when each player can make a sufficiently large number of proposals, outcomes are Pareto optimal. We then design a mechanism to implement equilibrium of this game and provide sufficient conditions to ensure that truthful reporting of preferences is a strong ex post Nash equilibrium. Moreover, we show empirically that players rarely have an incentive to misreport preferences more generally. Furthermore, for the problem with cardinal preferences, we show empirically that the resulting mechanism results in significantly higher social welfare than serial dictatorship, and the outcomes are highly equitable.
{"title":"Non-Cooperative Team Formation and a Team Formation Mechanism","authors":"M. Chambers, Chen Hajaj, Greg Leo, Jian Lou, Martin Van der Linden, Yevgeniy Vorobeychik, M. Wooders","doi":"10.2139/ssrn.3054771","DOIUrl":"https://doi.org/10.2139/ssrn.3054771","url":null,"abstract":"We model decentralized team formation as a game in which players make offers to potential teams whose members then either accept or reject the offers. The games induce no-delay subgame perfect equilibria with unique outcomes that are individually rational and match soulmates. We provide sufficient conditions for equilibria to implement core coalition structures, and show that when each player can make a sufficiently large number of proposals, outcomes are Pareto optimal. We then design a mechanism to implement equilibrium of this game and provide sufficient conditions to ensure that truthful reporting of preferences is a strong ex post Nash equilibrium. Moreover, we show empirically that players rarely have an incentive to misreport preferences more generally. Furthermore, for the problem with cardinal preferences, we show empirically that the resulting mechanism results in significantly higher social welfare than serial dictatorship, and the outcomes are highly equitable.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122374725","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 study a coordination game among agents on a network, choosing whether or not to take an action that yields value increasing in the actions of neighbors. In a standard global game setting, players receive noisy information of the technology's common state-dependent value. We show the existence and uniqueness of a pure equilibrium in the noiseless limit. This equilibrium partitions players into coordination sets, within members take a common cutoff strategy and are path connected. We derive an algorithm for calculating limiting cutoffs, and provide necessary and sufficient conditions for agents to inhabit the same coordination set. The strategic effects of perturbations to players' underlining values are shown to spread throughout but be contained within the perturbed players' coordination sets.
{"title":"Coordination on Networks","authors":"C. Leister, Y. Zenou, Junjie Zhou","doi":"10.2139/ssrn.3082671","DOIUrl":"https://doi.org/10.2139/ssrn.3082671","url":null,"abstract":"We study a coordination game among agents on a network, choosing whether or not to take an action that yields value increasing in the actions of neighbors. In a standard global game setting, players receive noisy information of the technology's common state-dependent value. We show the existence and uniqueness of a pure equilibrium in the noiseless limit. This equilibrium partitions players into coordination sets, within members take a common cutoff strategy and are path connected. We derive an algorithm for calculating limiting cutoffs, and provide necessary and sufficient conditions for agents to inhabit the same coordination set. The strategic effects of perturbations to players' underlining values are shown to spread throughout but be contained within the perturbed players' coordination sets.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115444878","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 introduces extensive form generalized games, a general framework for modeling dynamic strategic settings where players' feasible strategies depend on the strategies chosen by others. Extensive form generalized games nest a variety of existing game theoretic frameworks, including games with bounded rationality, endogenous information acquisition, rationally inattentive players, and games played by finite automata. Sufficient conditions for the existence of equilibria in behavioral strategies are provided for finite extensive form generalized games, and are shown to be tight. The most salient of these conditions, generalized perfect recall, is a generalized convexity condition which is equivalent to perfect recall in standard extensive form games. Feasibility correspondences describing rational inattention are shown to satisfy generalized perfect recall, and a notion of perfection is introduced to rule out incredible self restraint, a novel type of incredible threat in these settings.
{"title":"Extensive Form Generalized Games","authors":"Nicholas Butler","doi":"10.2139/ssrn.3034055","DOIUrl":"https://doi.org/10.2139/ssrn.3034055","url":null,"abstract":"This paper introduces extensive form generalized games, a general framework for modeling dynamic strategic settings where players' feasible strategies depend on the strategies chosen by others. Extensive form generalized games nest a variety of existing game theoretic frameworks, including games with bounded rationality, endogenous information acquisition, rationally inattentive players, and games played by finite automata. Sufficient conditions for the existence of equilibria in behavioral strategies are provided for finite extensive form generalized games, and are shown to be tight. The most salient of these conditions, generalized perfect recall, is a generalized convexity condition which is equivalent to perfect recall in standard extensive form games. Feasibility correspondences describing rational inattention are shown to satisfy generalized perfect recall, and a notion of perfection is introduced to rule out incredible self restraint, a novel type of incredible threat in these settings.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-09-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131531662","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}
Truthtelling is often viewed as focal in direct mechanisms. We introduce two new notions of robust implementation based on the premise that society may be composed of "primitive'' agents who, whenever confronted with a strategy profile, anchor to truthtelling and make a limited number of comparisons. Instead of comparing all possible alternative strategies as they would at a Nash equilibrium, primitive agents only make comparisons with truthtelling. We impose a notion of robustness of implementation when society may contain from primitive to sophisticated agents (who then play à la Nash). We call these (group) resilient implementation. We compare them to well-known conditions that have appeared in the mechanism design literature. Resilient implementation is equivalent to secure implementation, while its group version is linked to a coalitional extension of secure implementation. In contrast to resilient implementation, we show that the latter delivers positive results in many domains and models of interest that we discuss. Moving away from the implementation approach, we close with some results when truth-reversion is seen as a property imposed directly on decision rules. Our results suggest that some strategy-proof rules are expected to work better than others in practical applications.
{"title":"One Truth and a Thousand Lies: Focal Points in Mechanism Design","authors":"Olivier Bochet, Norovsambuu Tumennasan","doi":"10.2139/ssrn.3002539","DOIUrl":"https://doi.org/10.2139/ssrn.3002539","url":null,"abstract":"Truthtelling is often viewed as focal in direct mechanisms. We introduce two new notions of robust implementation based on the premise that society may be composed of \"primitive'' agents who, whenever confronted with a strategy profile, anchor to truthtelling and make a limited number of comparisons. Instead of comparing all possible alternative strategies as they would at a Nash equilibrium, primitive agents only make comparisons with truthtelling. We impose a notion of robustness of implementation when society may contain from primitive to sophisticated agents (who then play à la Nash). We call these (group) resilient implementation. We compare them to well-known conditions that have appeared in the mechanism design literature. Resilient implementation is equivalent to secure implementation, while its group version is linked to a coalitional extension of secure implementation. In contrast to resilient implementation, we show that the latter delivers positive results in many domains and models of interest that we discuss. Moving away from the implementation approach, we close with some results when truth-reversion is seen as a property imposed directly on decision rules. Our results suggest that some strategy-proof rules are expected to work better than others in practical applications.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129302912","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}
Social norms are typically thought to be persistent and long-lasting, sometimes surviving through growth, recessions, and regime changes. In some cases, however, they can quickly change. This paper examines the unraveling of social norms in communication when new information becomes available, e.g., aggregated through elections. We build a model of strategic communication between citizens who can hold one of two mutually exclusive opinions. In our model, agents communicate their opinions to each other, and senders care about receivers' approval. As a result, senders are more likely to express the more popular opinion, while receivers make less inference about senders who stated the popular view. We test these predictions using two experiments. In the main experiment, we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views. Participants in the experiment are offered a bonus reward if they authorize researchers to make a donation to an anti-immigration organization on their behalf. Participants who expect their decision to be observed by the surveyor are significantly less likely to accept the offer than those expecting an anonymous choice. Increases in participants' perceptions of Trump's popularity (either through experimental variation or through the “natural experiment” of his victory) eliminate the wedge between private and public behavior. A second experiment uses dictator games to show that participants judge a person less negatively for publicly expressing (but not for privately holding) a political view they disagree with if that person's social environment is one where the majority of people holds that view.
{"title":"From Extreme to Mainstream: How Social Norms Unravel","authors":"Leonardo Bursztyn, Georgy Egorov, Stefano Fiorin","doi":"10.3386/W23415","DOIUrl":"https://doi.org/10.3386/W23415","url":null,"abstract":"Social norms are typically thought to be persistent and long-lasting, sometimes surviving through growth, recessions, and regime changes. In some cases, however, they can quickly change. This paper examines the unraveling of social norms in communication when new information becomes available, e.g., aggregated through elections. We build a model of strategic communication between citizens who can hold one of two mutually exclusive opinions. In our model, agents communicate their opinions to each other, and senders care about receivers' approval. As a result, senders are more likely to express the more popular opinion, while receivers make less inference about senders who stated the popular view. We test these predictions using two experiments. In the main experiment, we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views. Participants in the experiment are offered a bonus reward if they authorize researchers to make a donation to an anti-immigration organization on their behalf. Participants who expect their decision to be observed by the surveyor are significantly less likely to accept the offer than those expecting an anonymous choice. Increases in participants' perceptions of Trump's popularity (either through experimental variation or through the “natural experiment” of his victory) eliminate the wedge between private and public behavior. A second experiment uses dictator games to show that participants judge a person less negatively for publicly expressing (but not for privately holding) a political view they disagree with if that person's social environment is one where the majority of people holds that view.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131041334","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 have collected odds and results from 7 474 horse races in Norway and Sweden for a period of approximately 1.5 years. Based on the odds from the win game, we construct a profitable betting strategy for the corresponding triple game. Given a 30% track take, the existence of a profitable strategy is surprising. A robot is typically needed to identify and exploit underrated bets. We argue that the existence of heterogeneous beliefs between players in the market might form a basis for profitable betting strategies. We did expect that bigger pools (more liquidity) would remove this anomaly. That is not the case. More players, and thereby bigger pools, increases the profitability of the system.
{"title":"Profitable Robot Strategies in Pari‐Mutuel Betting","authors":"Petter Bjerksund, G. Stensland","doi":"10.2139/SSRN.2948308","DOIUrl":"https://doi.org/10.2139/SSRN.2948308","url":null,"abstract":"We have collected odds and results from 7 474 horse races in Norway and Sweden for a period of approximately 1.5 years. Based on the odds from the win game, we construct a profitable betting strategy for the corresponding triple game. Given a 30% track take, the existence of a profitable strategy is surprising. A robot is typically needed to identify and exploit underrated bets. We argue that the existence of heterogeneous beliefs between players in the market might form a basis for profitable betting strategies. We did expect that bigger pools (more liquidity) would remove this anomaly. That is not the case. More players, and thereby bigger pools, increases the profitability of the system.","PeriodicalId":393761,"journal":{"name":"ERN: Other Game Theory & Bargaining Theory (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131340318","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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