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to dynamically consistent behavior. Furthermore, we give an example which shows that ambiguity can introduce new …
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This paper proposes that the ambiguity reflected by a set of priors remains unchanged when the set is translated within … the probability simplex, i.e. ambiguity is location invariant. This unifies and generalises numerous influential … definitions of ambiguity in the literature. Location invariance is applied to normal form games where players perceive strategic …
Persistent link: https://www.econbiz.de/10015070507
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This paper creates a game theoretic model to determine how pendulum arbitration or baseball arbitration impacts the incentives of litigants. Pendulum arbitration is when both parties submit competing proposals and the arbitrator chooses only one of the bids, in its entirety, to be binding on...
Persistent link: https://www.econbiz.de/10014043074
Global games of regime change - coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it - have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the...
Persistent link: https://www.econbiz.de/10014194481
This article proposes a reading of the armed conflict from an evolutionary design that takes into account the concept of private protection agencies in the works of Schelling/ Nozic/Gambetta. Their aim is to assess the dynamics of conflict and changes from its author's scientific output. A...
Persistent link: https://www.econbiz.de/10014199910
We analyze a game in which a group of agents exert costly effort over time to make progress on a project. The project is completed once the cumulative efforts reach a pre-specified threshold, at which point it generates a lump sum payoff. We characterize a budget balanced mechanism that induces...
Persistent link: https://www.econbiz.de/10012972549
This chapter reviews recent experimental data testing game theory and behavioral models that have been inspired to explain those data. The models fall into four groups: in cognitive hierarchy or level- k models, the assumption of equilibrium is relaxed by assuming agents have beliefs about other...
Persistent link: https://www.econbiz.de/10014025449
We analyze a canonical binary-action coordination game under the global games framework. To reduce coordination failure, we propose a novel intervention program that screens agents based on their heterogeneous interim beliefs. Compared with conventional government-guarantee type of programs, it...
Persistent link: https://www.econbiz.de/10012925548