Transitions between equilibria in bilingual games under logit choice

We study the effect of introducing a bilingual option on the long run equilibrium outcome in a class of two-strategy coordination games with distinct payoff and risk dominant equilibria under the logit choice rule. Existing results show that in the class of two-strategy games under consideration, the inefficient risk dominant equilibrium is selected in the long run under noisy best response models. We show that if the cost of the bilingual option is sufficiently low then the efficient payoff dominant equilibrium will be selected in the long run under the logit choice rule.     

The decision game: a serious game approach to understanding environmental risk management decisions

Abstract

Here we describe the implementation of an experimental research tool called the Decision Game that we used to collect data on household flood risk management decisions. Participants using this tool play an interactive game that involves making household decisions about place of residence and a variety of household expenditures, including spending on flood insurance and private flood risk mitigation. Participants also answer survey questions before and after playing the game; the pre-game survey collected demographic information, and the post-game survey collected information about participant experiences with flooding and flood mitigation. Online and face-to-face participants showed similar engagement with the experiment, and most participants appeared to have made deliberate and considered decisions about risk mitigation. Online study participants had similar responses to those who participated in person, although face-to-face participants seemed slightly more likely to mitigate against risk. Overall, participants in this research were younger, more educated and more likely to rent a home than the average Canadian. Serious games may be useful for augmenting existing data gathering strategies used in understanding environmental decision making, particularly for rare catastrophic events for which stated preference surveys may be less informative. Serious games allow for sharing a mixture of information with study participants, including maps, video clips, text and even immersive 3D experiences, and can be administered online to increase participation levels. Future research will consider longer duration online experiments and more immersive interaction frameworks.     

Guarantees,transparency and the interdependency between sovereign and bank default risk

Bank debt guarantees have traditionally been viewed as costless measures to prevent bank runs. However, as recent experiences in some European countries have demonstrated, guarantees may link the coordination problems of bank and sovereign creditors and induce a functional interdependence between the likelihoods of a government default and bank illiquidity. Employing a global-game approach, we model this link, showing the existence and uniqueness of the joint equilibrium and derive its comparative statics properties. In equilibrium, the guarantee reduces the probability of a bank run, while it increases the probability of a sovereign default. The latter erodes the guarantee’s credibility and thus its effectiveness ex ante. By setting the guarantee optimally, the government balances these two effects in order to minimize expected costs of crises. Our results show that the optimal guarantee has clear-cut welfare gains which are enhanced through policies that promote greater balance sheet transparency.     

Cournot games with biconcave demand

Biconcavity is a simple condition on inverse demand that corresponds to the ordinary concept of concavity after simultaneous parameterized transformations of price and quantity. The notion is employed here in the framework of the homogeneous-good Cournot model with potentially heterogeneous firms. The analysis leads to unified conditions, respectively, for the existence of a pure-strategy equilibrium via nonincreasing best-response selections, for existence via quasiconcavity, and for the uniqueness of the equilibrium. The usefulness of the generalizations is illustrated in cases where inverse demand is either “nearly linear” or isoelastic. It is also shown that commonly made assumptions regarding large outputs are often redundant.     

Kuhn’s Theorem for extensive form Ellsberg games

We propose the notions of mixed and behavioral Ellsberg strategies for extensive form games and prove that these strategies are outcome-equivalent if and only if mixed Ellsberg strategies satisfy a certain rectangularity condition. In addition, we show that not only the profile of Ellsberg strategies must be appropriately chosen but also the extensive form must satisfy further restrictions beyond those implied by perfect recall in order to ensure that each player will respect his ex ante strategy choice with the evolution of play.     

基于古诺模型的银行市场分析

运用寡头市场中的古诺模型来试图构建银行市场的竞争模型,分析市场变化的影响,找出银行业在各行业竞争中的最佳选择,并在此基础上判断我国银行市场未来发展的趋势,同时在银行市场行为方面提出正确应对外资银行的介入、积极维护存贷款市场业务等建议.     

WHOLESALE PRICES AND COURNOT‐BERTRAND COMPETITION

This note considers the competing vertical structures framework with Cournot‐Bertrand competition downstream. It shows that the equilibrium wholesale price paid by a Cournot (Bertrand)‐type retailer is above (below) marginal costs of a corresponding manufacturer. This result contrasts with the one under pure competition downstream (i.e., Cournot or Bertrand), where the wholesale price is set below (above) marginal costs in case of a Cournot (Bertrand) game at the retail level.     

基于古诺模型的四种市场的社会福利

市场根据垄断程度的不同。可以分为完全竞争、垄断竞争、寡头垄断和完全垄断市场四种类型。基于古诺模型，用博弈论方法研究n个厂商市场情形的总产量、价格、总收益和消费者剩余并把它们归纳为统一的公式。从四种市场情形总产量和价格的特点推出其供给曲线的形状，进而比较其社会福利的状况。研究结果表明，随着垄断性的加强，市场的社会福利会越来越劣，完全竞争市场的社会福利最好，垄断竞争市场次之，寡头垄断市场更次，完全垄断市场的社会福利最差。     

Existence of Sparsely Supported Correlated Equilibria

We show that every N-player K ₁ × ... × K _N game possesses a correlated equilibrium with at least zero entries. In particular, the largest N-player K × ... × K games with unique fully supported correlated equilibrium are two-player games. We thank an anonymous referee for most useful comments. The first author acknowledges financial support from Spanish Ministry of Science and Technology, grant SEJ2004-03619, and in form of a Ramón y Cajal fellowship. The second author acknowledges support by the PASCAL Network of Excellence under EC grant no.506778, as well as from Spanish Ministry of Science and Technology and FEDER, grant BMF2003-03324. Both authors also acknowledge financial support from BBVA grant “Aprender a jugar.”     

Constitutional coordination in unstable party systems: the Brazilian constitution of 1988

Constitutional assemblies are a common feature of many democratic transitions. However, the goal of coordinating constitutional choice would seem nearly impossible when assemblies are comprised of highly fragmented and volatile political parties. Building on Knight’s bargaining model, this article argues that the main challenge to coordination in unstable party systems is the procedural disequilibrium that results from incomplete information over breakdown payoffs. The likelihood of compromise in such circumstances is a function of the ideologies that frame constitutional choice and inform coalition-building. Thus, unstable party systems are not chaotic, although they may be deeply conflict-laden. These issues are illustrated empirically via the Brazilian Constitution of 1988, which demonstrates the possibilities for a stable constitutional order emerging from a fragmented and volatile party system.