Pub Date : 2024-11-01DOI: 10.1016/j.geb.2024.11.002
Ronen Gradwohl , Artyom Jelnov
We study a repeated credence goods market in which experts provide treatment to customers. We assume that the history of transactions is recorded on a review platform that contains information only about treatments, and not about non-treatments. We also introduce the notion of a partial credence good, where treated customers receive a noisy, ex post signal about the necessity of treatment. Absent such signals, there is a breakdown of the market. We provide a necessary and sufficient condition on the signals that guarantees the existence of any non-trivial equilibrium, as well as an efficient one.
{"title":"Partial credence goods on review platforms","authors":"Ronen Gradwohl , Artyom Jelnov","doi":"10.1016/j.geb.2024.11.002","DOIUrl":"10.1016/j.geb.2024.11.002","url":null,"abstract":"<div><div>We study a repeated credence goods market in which experts provide treatment to customers. We assume that the history of transactions is recorded on a review platform that contains information only about treatments, and not about non-treatments. We also introduce the notion of a partial credence good, where treated customers receive a noisy, ex post signal about the necessity of treatment. Absent such signals, there is a breakdown of the market. We provide a necessary and sufficient condition on the signals that guarantees the existence of any non-trivial equilibrium, as well as an efficient one.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 517-534"},"PeriodicalIF":1.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142663037","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.geb.2024.09.013
Andreas Haupt, Aroon Narayanan
Many economic decision-makers today rely on learning algorithms for important decisions. This paper shows that a widely used learning algorithm—ε-Greedy—exhibits emergent risk aversion, favoring actions with lower payoff variance. When presented with actions of the same expectated payoff, under a wide range of conditions, ε-Greedy chooses the lower-variance action with probability approaching one. This emergent preference can have wide-ranging consequences, from inequity to homogenization, and holds transiently even when the higher-variance action has a strictly higher expected payoff. We discuss two methods to restore risk neutrality. The first method reweights data as a function of how likely an action is chosen. The second method employs optimistic payoff estimates for actions that have not been taken often.
{"title":"Risk preferences of learning algorithms","authors":"Andreas Haupt, Aroon Narayanan","doi":"10.1016/j.geb.2024.09.013","DOIUrl":"10.1016/j.geb.2024.09.013","url":null,"abstract":"<div><div>Many economic decision-makers today rely on learning algorithms for important decisions. This paper shows that a widely used learning algorithm—<em>ε</em>-Greedy—exhibits emergent risk aversion, favoring actions with lower payoff variance. When presented with actions of the same expectated payoff, under a wide range of conditions, <em>ε</em>-Greedy chooses the lower-variance action with probability approaching one. This emergent preference can have wide-ranging consequences, from inequity to homogenization, and holds transiently even when the higher-variance action has a strictly higher expected payoff. We discuss two methods to restore risk neutrality. The first method reweights data as a function of how likely an action is chosen. The second method employs optimistic payoff estimates for actions that have not been taken often.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 415-426"},"PeriodicalIF":1.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142587092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.geb.2024.10.006
Nicodemo De Vito
Hierarchies of conditional beliefs (Battigalli and Siniscalchi, 1999) play a central role for the epistemic analysis of solution concepts in sequential games. They are modelled by type structures, which allow the analyst to represent the players' hierarchies without specifying an infinite sequence of conditional beliefs. Here, we study type structures that satisfy a “richness” property, called completeness. Friedenberg (2010) shows that, under specific conditions, a complete type structure with ordinary beliefs represents all hierarchies. This paper shows that Friedenberg's result can be extended to type structures with conditional beliefs. As an ancillary result of independent interest, we provide a construction of the “canonical” space of hierarchies of conditional beliefs which generalizes the one in Battigalli and Siniscalchi (1999).
{"title":"Complete conditional type structures","authors":"Nicodemo De Vito","doi":"10.1016/j.geb.2024.10.006","DOIUrl":"10.1016/j.geb.2024.10.006","url":null,"abstract":"<div><div>Hierarchies of conditional beliefs (<span><span>Battigalli and Siniscalchi, 1999</span></span>) play a central role for the epistemic analysis of solution concepts in sequential games. They are modelled by type structures, which allow the analyst to represent the players' hierarchies without specifying an infinite sequence of conditional beliefs. Here, we study type structures that satisfy a “richness” property, called <em>completeness</em>. <span><span>Friedenberg (2010)</span></span> shows that, under specific conditions, a complete type structure with ordinary beliefs represents all hierarchies. This paper shows that Friedenberg's result can be extended to type structures with conditional beliefs. As an ancillary result of independent interest, we provide a construction of the “canonical” space of hierarchies of conditional beliefs which generalizes the one in <span><span>Battigalli and Siniscalchi (1999)</span></span>.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 427-448"},"PeriodicalIF":1.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142663034","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.geb.2024.11.001
Arash Abizadeh , Adrian Vetta
The classical measures of voting power are based on players' decisiveness or full causal efficacy in vote configurations or divisions. We design an alternative, recursive measure departing from this classical approach. We motivate the measure via an axiomatic characterisation based on reasonable axioms and by offering two complementary interpretations of its meaning: first, we interpret the measure to represent, not the player's probability of being decisive in a voting structure, but its expected probability of being decisive in a uniform random walk from a vote configuration in the subset lattice (through which we represent the voting structure); and, second, we interpret it as representing a player's expected efficacy, thereby incorporating the notion of partial and not just full causal efficacy. We shore up our measure by demonstrating that it satisfies a set of postulates any reasonable voting measure should satisfy, namely, the iso-invariance, dummy, dominance, donation, minimum-power bloc, and quarrel postulates.
{"title":"A recursive measure of voting power that satisfies reasonable postulates","authors":"Arash Abizadeh , Adrian Vetta","doi":"10.1016/j.geb.2024.11.001","DOIUrl":"10.1016/j.geb.2024.11.001","url":null,"abstract":"<div><div>The classical measures of voting power are based on players' decisiveness or full causal efficacy in vote configurations or divisions. We design an alternative, recursive measure departing from this classical approach. We motivate the measure via an axiomatic characterisation based on reasonable axioms and by offering two complementary interpretations of its meaning: first, we interpret the measure to represent, not the player's probability of being decisive in a voting structure, but its expected probability of being decisive in a uniform random walk from a vote configuration in the subset lattice (through which we represent the voting structure); and, second, we interpret it as representing a player's expected efficacy, thereby incorporating the notion of partial and not just full causal efficacy. We shore up our measure by demonstrating that it satisfies a set of postulates any reasonable voting measure should satisfy, namely, the iso-invariance, dummy, dominance, donation, minimum-power bloc, and quarrel postulates.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 535-565"},"PeriodicalIF":1.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142663087","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.geb.2024.10.003
Kirill Borissov , Mikhail Pakhnin , Ronald Wendner
We address time-inconsistent decision making by studying two types of intrapersonal cooperation in the Ramsey model with quasi-hyperbolic discounting. First, we consider temporal selves following the Golden Rule principle (do unto others as you would have them do unto you). Second, we consider temporal selves following Kant's categorical imperative (act as you would want all others to act towards all others). We introduce the corresponding cooperative policies and characterize them for economies with respectively log-utility and Cobb–Douglas technology, and isoelastic utility and linear technology. We compare cooperative behavior with non-cooperative (naive and sophisticated) behavior in terms of saving rates, and show that intrapersonal cooperation improves welfare according to all commonly used welfare criteria.
{"title":"Cooperating with yourself","authors":"Kirill Borissov , Mikhail Pakhnin , Ronald Wendner","doi":"10.1016/j.geb.2024.10.003","DOIUrl":"10.1016/j.geb.2024.10.003","url":null,"abstract":"<div><div>We address time-inconsistent decision making by studying two types of intrapersonal cooperation in the Ramsey model with quasi-hyperbolic discounting. First, we consider temporal selves following the Golden Rule principle (<em>do unto others as you would have them do unto you</em>). Second, we consider temporal selves following Kant's categorical imperative (<em>act as you would want all others to act towards all others</em>). We introduce the corresponding cooperative policies and characterize them for economies with respectively log-utility and Cobb–Douglas technology, and isoelastic utility and linear technology. We compare cooperative behavior with non-cooperative (naive and sophisticated) behavior in terms of saving rates, and show that intrapersonal cooperation improves welfare according to all commonly used welfare criteria.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 398-414"},"PeriodicalIF":1.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142587091","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-31DOI: 10.1016/j.geb.2024.09.007
David Gill , Zachary Knepper , Victoria Prowse , Junya Zhou
We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game (where the Nash equilibrium action is zero). Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose zero less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-k thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose zero.
{"title":"How cognitive skills affect strategic behavior: Cognitive ability, fluid intelligence and judgment","authors":"David Gill , Zachary Knepper , Victoria Prowse , Junya Zhou","doi":"10.1016/j.geb.2024.09.007","DOIUrl":"10.1016/j.geb.2024.09.007","url":null,"abstract":"<div><div>We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game (where the Nash equilibrium action is zero). Using the level-<em>k</em> model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose zero less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-<em>k</em> thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose zero.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"149 ","pages":"Pages 82-95"},"PeriodicalIF":1.0,"publicationDate":"2024-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142700913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-18DOI: 10.1016/j.geb.2024.10.002
Assaf Romm , Alvin E. Roth , Ran I. Shorrer
Stability and “no justified envy” are used almost synonymously in the matching theory literature. However, they are conceptually different and have logically separate properties. We generalize the definition of justified envy to environments with arbitrary school preferences, feasibility constraints, and contracts, and show that stable allocations may admit justified envy. When choice functions are substitutable, the outcome of the deferred acceptance algorithm is both stable and admits no justified envy.
{"title":"Stability vs. no justified envy","authors":"Assaf Romm , Alvin E. Roth , Ran I. Shorrer","doi":"10.1016/j.geb.2024.10.002","DOIUrl":"10.1016/j.geb.2024.10.002","url":null,"abstract":"<div><div>Stability and “no justified envy” are used almost synonymously in the matching theory literature. However, they are conceptually different and have logically separate properties. We generalize the definition of justified envy to environments with arbitrary school preferences, feasibility constraints, and contracts, and show that stable allocations may admit justified envy. When choice functions are substitutable, the outcome of the deferred acceptance algorithm is both stable and admits no justified envy.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 357-366"},"PeriodicalIF":1.0,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531182","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The design of data markets has gained importance as firms increasingly use machine learning models fueled by externally acquired training data. A key consideration is the externalities firms face when data, though inherently freely replicable, is allocated to competing firms. In this setting, we demonstrate that a data seller's optimal revenue increases as firms can pay to prevent allocations to others. To do so, we first reduce the combinatorial problem of allocating and pricing multiple datasets to the auction of a single digital good by modeling utility for data through the increase in prediction accuracy it provides. We then derive welfare and revenue maximizing mechanisms, highlighting how the form of firms' private information – whether the externalities one exerts on others is known, or vice-versa – affects the resulting structures. In all cases, under appropriate assumptions, the optimal allocation rule is a single threshold per firm, where either all data is allocated or none is.
{"title":"Towards data auctions with externalities","authors":"Anish Agarwal, Munther Dahleh, Thibaut Horel, Maryann Rui","doi":"10.1016/j.geb.2024.09.008","DOIUrl":"10.1016/j.geb.2024.09.008","url":null,"abstract":"<div><div>The design of data markets has gained importance as firms increasingly use machine learning models fueled by externally acquired training data. A key consideration is the externalities firms face when data, though inherently freely replicable, is allocated to competing firms. In this setting, we demonstrate that a data seller's optimal revenue increases as firms can pay to prevent allocations to others. To do so, we first reduce the combinatorial problem of allocating and pricing multiple datasets to the auction of a single digital good by modeling utility for data through the increase in prediction accuracy it provides. We then derive welfare and revenue maximizing mechanisms, highlighting how the form of firms' private information – whether the externalities one exerts on others is known, or vice-versa – affects the resulting structures. In all cases, under appropriate assumptions, the optimal allocation rule is a single threshold per firm, where either all data is allocated or none is.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 323-356"},"PeriodicalIF":1.0,"publicationDate":"2024-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142444886","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-09DOI: 10.1016/j.geb.2024.10.001
Yinxiao Chu
We study a sequential trading mechanism with ambiguity-averse agents modeled by multiple prior preferences. Informed traders generally mix between trading and non-trading, and their trading probability decreases with ambiguity. If agents are sufficiently ambiguous, informed traders do not trade, and only noise traders place orders; trading becomes uninformative. When signal accuracy is ambiguous, trading can make public beliefs more ambiguous over time, which leads to social learning failures in the long run. Moreover, since informed traders may not trade, no-trade can also be informative when signal accuracy is asymmetric. Even with continuous action spaces, sufficiently high ambiguity stops social learning.
{"title":"Ambiguity and informativeness of (non-)trading","authors":"Yinxiao Chu","doi":"10.1016/j.geb.2024.10.001","DOIUrl":"10.1016/j.geb.2024.10.001","url":null,"abstract":"<div><div>We study a sequential trading mechanism with ambiguity-averse agents modeled by multiple prior preferences. Informed traders generally mix between trading and non-trading, and their trading probability decreases with ambiguity. If agents are sufficiently ambiguous, informed traders do not trade, and only noise traders place orders; trading becomes uninformative. When signal accuracy is ambiguous, trading can make public beliefs more ambiguous over time, which leads to social learning failures in the long run. Moreover, since informed traders may not trade, no-trade can also be informative when signal accuracy is asymmetric. Even with continuous action spaces, sufficiently high ambiguity stops social learning.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 367-384"},"PeriodicalIF":1.0,"publicationDate":"2024-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531183","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-05DOI: 10.1016/j.geb.2024.09.010
Stefania Minardi , Andrei Savochkin
A consumption event is memorable if the memory of the event affects well-being at times after the material consumption, as originally introduced by Gilboa et al. (2016). Our main contribution is to develop an axiomatic foundation of memorable consumption in a dynamic setting. Preferences are represented by the present value of the sum of utilities derived at each date from the current consumption and from recollecting the past. Our model accommodates well-known phenomena in psychology, such as the peak-end rule, duration neglect, and adaptation trends. We also provide foundations for a prominent special case of the representation with the Markovian property. The model is illustrated with applications in two different contexts: risk-taking behavior in a principal-agent problem and life-cycle consumption-savings decisions.
{"title":"Time for memorable consumption","authors":"Stefania Minardi , Andrei Savochkin","doi":"10.1016/j.geb.2024.09.010","DOIUrl":"10.1016/j.geb.2024.09.010","url":null,"abstract":"<div><div>A consumption event is memorable if the memory of the event affects well-being at times after the material consumption, as originally introduced by <span><span>Gilboa et al. (2016)</span></span>. Our main contribution is to develop an axiomatic foundation of memorable consumption in a dynamic setting. Preferences are represented by the present value of the sum of utilities derived at each date from the current consumption and from recollecting the past. Our model accommodates well-known phenomena in psychology, such as the peak-end rule, duration neglect, and adaptation trends. We also provide foundations for a prominent special case of the representation with the Markovian property. The model is illustrated with applications in two different contexts: risk-taking behavior in a principal-agent problem and life-cycle consumption-savings decisions.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"148 ","pages":"Pages 296-322"},"PeriodicalIF":1.0,"publicationDate":"2024-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142437662","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号