A contract-based model for directed network formation

We consider a network game where the nodes of the network wish to form a graph to route traffic between themselves. We present a model where costs are incurred for routing traffic, as well as for a lack of network connectivity. We focus on directed links and the link stability equilibrium concept, and characterize connected link stable equilibria. The structure of connected link stable networks is analyzed for several special cases.     

Strategic Network Disruption and Defense

We study a game between a network designer, who uses costly links to connect nodes in a network, and a network disruptor who tries to disrupt the resulting network as much as possible by deleting either nodes or links. For low linking costs networks with all nodes in symmetric positions are a best response of the designer under both link deletion and node deletion. For high linking costs the designer builds a star network under link deletion, but for node deletion excludes some nodes from the network to build a smaller but stronger network. For intermediate linking costs the designer again builds a symmetric network under node deletion but a star‐like network with weak spots under link deletion.     

Evolutionary selection of ‘chivalrous’ conventions in coordination games without common expectations

We study an evolutionary game-theoretic model where players have to choose within a predetermined set of mixed strategies in a coordination game. Players are of two different kinds, male and female. No common expectations assumption is made; players tend therefore to adopt the strategy that yields larger than average expected payoffs for their kind. In this framework, every stable stationary point of the population dynamics can be interpreted as the emergence of a particular convention. A classification of the possible conventions is provided; conditions for their emergence are determined.     

Network design and defence

Infrastructure networks are a key feature of an economy. Their functionality depends on the connectivity and sizes of different components and they face a variety of threats, from natural disasters to intelligent attacks. How should networks be defended and designed to ensure the best functionality?We develop a model to study this question. There are two players, the Designer and the Adversary. The Designer forms costly links among n given nodes and chooses to protect some of them at a cost. The Adversary then allocates resources to attack nodes. Successful attack on a node leads to its elimination. We study sub-game perfect equilibria of this game.Our main finding is that if defence is affordable and reliable, then the network is sparse and heterogeneous, and either centrally or fully protected. On the other hand, if defence is relatively costly compared to linking, then dense and homogeneous networks arise in equilibrium.     

Improving ICANN’s governance and accountability: A policy proposal

The Internet Corporation for Assigned Names and Numbers (ICANN) has control over extremely important aspects of the Internet. Yet, its non-profit corporation status, combined with the way that it is funded and governed, make accountability a serious problem. This paper draws on the accountability framework that has been developed by Mueller (2009) to evaluate the structure and governance of ICANN and then compares it to the structure and governance of a number of other organizations that perform a roughly comparable range of coordination and standard-setting functions, to explore what might be applicable to ICANN. Virtually all of these other organizations are governed by their direct users, thereby building accountability into their structures. We suggest that this would be a good model for ICANN as well.     

The museum pass game and its value

We discuss a game in which service providers (e.g., museums) team up in offering a limited time access pass allowing unlimited usage of their services. In this game, a natural way to allocate the joint income from the sale of passes among the service providers is by using the Shapley value. We show that, for the particular game considered, the Shapley value takes a very intuitive and computationally simple form.     

On the formation of interaction networks in social coordination games

There are many situations where two interacting individuals can benefit from coordinating their actions. We examine the endogenous choice of partners in such social coordination games and the implications for resulting play. We model the interaction pattern as a network where individuals periodically have the discretion to add or sever links to other players. With such endogenous interaction patterns we see multiple stochastically stable states of play, including some that involve play of equilibria in the coordination game that are neither efficient nor risk-dominant. Thus the endogenous network structure not only has implications for the interaction pattern that emerges, but it also has a significant impact on the play in the coordination game relative to what would arise if the same interaction network were exogenous.     

Decompositions and potentials for normal form games

A basic model of commitment is to convert a two-player game in strategic form to a “leadership game” with the same payoffs, where one player, the leader, commits to a strategy, to which the second player always chooses a best reply. This paper studies such leadership games for games with convex strategy sets. We apply them to mixed extensions of finite games, which we analyze completely, including nongeneric games. The main result is that leadership is advantageous in the sense that, as a set, the leader's payoffs in equilibrium are at least as high as his Nash and correlated equilibrium payoffs in the simultaneous game. We also consider leadership games with three or more players, where most conclusions no longer hold.     

The role of strategic uncertainty in games: An experimental study of cheap talk and contracts in the Nash demand game

We utilise results from a human-subjects experiment to examine the connection between strategic uncertainty and outcomes in games. Our basic game is a Nash demand game where one player has an outside option available. A “chat” treatment allows bargainers to send cheap-talk messages prior to playing the basic game, and in a “contracts” treatment, they can additionally propose and accept binding contracts. We propose that strategic uncertainty comprises at least two facets: “coordination-type”, which is lower in the chat game than in the basic game, and “rationality-type”, which is lower in the contracts game than in the chat game. We find that both types of strategic uncertainty impact bargaining outcomes: moving from the basic game to the chat game, and thence to contracts, improves several aspects of outcomes, such as higher efficiency, less opting out and less under-demanding. Other results include a treatment effect on the types of agreements that are reached.     

How bad is forming your own opinion?

The question of how people form their opinion has fascinated economists and sociologists for long time. In many of the models, a group of people in a social network, each holding a numerical opinion, arrive at a shared opinion through repeated averaging with their neighbors in the network. Motivated by the observation that in reality consensus is rarely reached, we study a related sociological model in which individuals' intrinsic beliefs counterbalance the averaging process and yield a diversity of opinions.We interpret the repeated averaging process as best-response dynamics in an underlying game with natural payoffs and its limit as an equilibrium. This allows us to study the cost of disagreement by comparing between the cost at equilibrium and the social optimum. We also consider a natural network design problem in this setting: which links can we add to the underlying network to reduce the cost at equilibrium?     

Contracts without memory in multiperiod agency models

Settings are considered in which optimal multiperiod contracts can have no memory, i.e., where second period payments do not need to depend on first period outcomes. If contracts have no memory, a repeated agency game can be played myopically; there are no gains to long-term relationships. Conditions on preferences for a no memory contract are presented. In an agency game with moral hazard on the act selection, preference separability and domain additivity imply the existence of a no memory contract. In a setting without moral hazard but with asymmetric information on the outcome, domain additivity implies no memory.     

高校应对大学生网络创业问题的一些理性思考

随着大学生就业形势日益严峻,以创业带动大学生就业成为大势所趋。目前,网络创业投入小,回报快而高;市场潜力无限;加上大学生自身的智力优势,使得网络创业成为大学生创业的新途径和新模式。但是大学生的网络创业也并非一帆风顺,由于网络创业意识薄弱,对创业缺乏理性认识;缺乏创业者心态,创业技能落后;创业范围局限性大;缺乏资金支持和管理意识;技术发展后劲不足,加上创新意识缺乏,导致发展潜力不济等等,成为制约和困扰大学生网络创业的重要因素。针对这些问题,本文提出了新时期高校如何应对的一些思考和建议,主要包括：将大学生网络创业作为系统工程来对待;重视强化创业师资培养;积极推进理性和独立自主的创业文化环境的建设;反思和改革高等教育改革等。     

Bargaining under a deadline: evidence from the reverse ultimatum game

We study a “reverse” ultimatum game, in which proposers have multiple chances to offer responders a division of some fixed pie. The game ends if the responder accepts an offer, or if, following a rejection, the proposer decides not to make a better offer. The unique subgame perfect equilibrium gives the proposer the minimum possible payoff. Nevertheless, the experimental results are not too different from those of the standard ultimatum game, although proposers generally receive slightly less than half of the surplus.We use the reverse ultimatum game to study deadlines experimentally. With a deadline, the subgame perfect equilibrium prediction is that the proposer gets the entire surplus.Deadlines are used strategically to influence the outcome, and agreements are reached near the deadline. Strategic considerations are evident in the differences in observed behavior between the deadline and no deadline conditions, even though agreements are substantially less extreme than predicted by perfect equilibrium.     

Network architecture, salience and coordination

This paper reports the results of an experimental investigation of dynamic games in networks. In each period, the subjects simultaneously choose whether or not to make an irreversible contribution to the provision of an indivisible public good. Subjects observe the past actions of other subjects if and only if they are connected by the network. Networks may be incomplete so subjects are asymmetrically informed about the actions of other subjects in the same network, which is typically an obstacle to the attainment of an efficient outcome. For all networks, the game has a large set of (possibly inefficient) equilibrium outcomes. Nonetheless, the network architecture makes certain strategies salient and this in turn facilitates coordination on efficient outcomes. In particular, asymmetries in the network architecture encourage two salient behaviors, strategic delay and strategic commitment. By contrast, we find that symmetries in the network architecture can lead to mis-coordination and inefficient outcomes.     

Developing business ethics theory and integrating economic analysis into business ethics teaching – a conceptualization based on externalities and diminishing marginal utility

Contrary to understandings that treat ethical considerations and economic thinking as separate if not antagonistic issues, we advocate a holistic view that links business ethics to consequentialist economic concepts and their concern about how scarce means should be used for the attainment of (given) ends. We believe that business ethics students will profit from a development of business ethics theory that facilitates an outcome-based evaluation of business strategies anchored in the economic concepts of externalities, game theory, equilibria, efficiency, transaction costs, and diminishing marginal utility. We outline how moral judgments about (socially irresponsible) business behaviors, which often lack theoretical grounding and self-critical examination, can be made both more consistent and transparent through a systematic application of these theoretical concepts. We furthermore point out that, in this evaluative exercise, business ethics analysts should make all assumptions explicit to meet their task of facilitating informed public debates and informed moral choices.     

Entry costs, industry structure, and cross-country income and TFP differences

Entry costs vary dramatically across countries. To assess their impact on cross-country differences in output and TFP, we construct a model with endogenous entry and operation decisions by firms. We calibrate the model to match the U.S. distribution of employment and firms by size. Higher entry costs lead to greater misallocation of productive factors and lower TFP and output. In the model, countries in the lowest decile of the entry costs distribution have 1.32 to 1.45 times higher TFP and 1.52 to 1.75 times higher output per worker than countries in the highest decile. As in the data, higher entry costs are associated with lower entry rates and business density.     

Dynamics in tree formation games

Network formation games capture two conflicting objectives of selfish nodes in a network: such nodes wish to form a well-connected network and, at the same time, to minimize their cost of participation. We consider three families of such models where nodes avoid forming edges beyond those necessary for connectivity, thus forming tree networks. We focus on two local two-stage best-response dynamics in these models, where nodes can only form links with others in a restricted neighborhood. Despite this locality, both our dynamics converge to efficient outcomes in two of the considered families of models. In the third family of models, both our dynamics guarantee at most constant efficiency loss. This is in contrast with the standard best-response dynamics whose efficiency loss is unbounded in all three families of models. Thus we present a globally constrained network formation game where local dynamics naturally select desirable outcomes.     

劳动合同对于进城务工人员收入影响的有效性分析

本文重点讨论了《劳动合同法》的颁布对于进城务工人员收入的影响,我们用博弈论模型证明了签订劳动合同可以提高务工人员的收入,并且在一定条件下企业也可以通过生产率的上升而获利,实现双赢。从统计上看,签订合同的工人月收入高出347.19元,小时收入高出2.16元,OLS回归结果也发现合同对于收入有显著的正影响。但同时我们注意到有合同的劳动者本身有着更好的素质,Probit和Logit模型都验证了这一点,基于这种可能的内生性偏误,我们使用了处置效应来控制这一问题,并发现签订合同依旧显著提高了收入,估计月收入提高14.0%—14.9%,小时收入提高18.2%—21.5%。     

Competition and compatibility among Internet Service Providers

We consider a two-stage game between two competing Internet Service Providers (ISPs). The firms offer access to the Internet. Access is assumed to be vertically and horizontally differentiated. Our model exhibits network externalities. In the first stage the two ISPs choose the level of compatibility (i.e. quality of a direct interconnect link between the two networks). In the second stage the two ISPs compete á-la Hotelling. We find that the ISPs can reduce the stage 2 competitive pressure by increasing compatibility due to the network externality. The firms will thus agree upon a high compatibility at stage 1. When it is costly to invest in compatibility, we find that the firms overinvest, as compared to the welfare maximising investment level.