Download or read book Essays on Dynamic Games and Forward Induction written by Shigeki Isogai and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this essay, I study how forward-induction reasoning affect plausibility/stability of agreements in which players in a dynamic interaction enforces cooperation with the threat of mutually destructive punishment. While the traditional theory using equilibrium concept shows that such strategy profile is self-enforcing, under a modification of the model, such strategy profile fails to be consistent with players' rationality.In the first chapter I provide the simplest setting under which this non-rationalizability result of deterrence can be shown. The game is a two-player three-stage game: in the first stage, the players choose whether to enter the strategic interaction by paying some cost; in the second stage, the players play a prisoners' dilemma game; and in the third stage, the players play a coordination game. Each move is simultaneous and the players' past actions are perfectly monitored. While there exists a subgame-perfect equilibrium in which players can cooperate with the threat of punishment provided the punishment is strong enough, I show that the strategy profile does not consists of rationalizable strategies under a certain parameter values. This occurs because choosing to enter, unilaterally defect, and then punish the opponent is strictly dominated by a mixture of the two strategies ``do not enter'' and ``enter, defect, but do not punish.'' This result shows that a simple modification of the game and forward-induction consideration encoded in rationalizability might cast doubt on the idea of deterring defection by the threat of mutual punishment.The other two chapters study to what extent the result in the fist chapter does or does not apply in different settings. The second chapter considers the infinite-horizon extension of the model in the first chapter. In the first period (denoted as period 0), the players choose whether to enter the game. After the players choose to enter, the continuation game is the infinite repetition of the stage game which consists of two phases: in the first phase players play prisoners' dilemma game, after which players simultaneously choose to continue the game, exit from the game without punishing the opponent, or punish the opponent and exit from the game. I show that with a similar condition as in the result in the first chapter, strategy which entails defection and punishment in the first stage is not rationalizable. Moreover, since the exit-without-punishment option works as an outside option in later stages of the game, we also obtain a result which provides conditions under which punishment after defection is excluded by rationalizability.The third chapter extends the model in the first chapter toward an incomplete-information model in that it considers a model of random number of players, who are sequentially matched and play the game as in the first chapter. I assume that while the past actions in the stage games are not observable, occurrences of punishment is publicly observable to all the players (the typical example is the formation of cartels and the occurrence of leniency applications). I explore how this observable punishment works as a signaling device and how this model gives rise to a rationalizable use of punishment. I first show that a simple repetition of games does not give rise to a rationalizable punishment because of the assumption that the players cannot distinguish the non-occurrence of deviation and failure to punishment. I then discuss possible modifications to recover the punishment being an equilibrium action; i.e., that a small perturbation in payoffs can recover the possibility of punishment.

Download or read book Essays in Dynamic Games written by Juan Escobar and published by . This book was released on 2009 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Communication and Information in Game Theory written by Seunghwan Lim and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I investigate the role of information and communication in game theory. The dissertation consists of three chapters. The first chapter is co-authored with Takuo Sugaya, and we prove a folk theorem in two-player repeated games with public monitoring using the individual full-rank condition. The individual full-rank condition allows players to statistically distinguish a player's action holding fixed the other player's action. Under this condition, we may not be able to directly identify the pair of actions played in each period and punish the player who is likely to have deviated. We build an equilibrium where the players first coordinate on their actions, individually review the other player using noisy signals, and reward or punish the other player based on the history of signals and her own actions. One of the challenges of this construction is the problem of higher-order belief. The coordination and reviews are conducted through a noisy signal, and a player's optimal strategy depends in turn on the other player's belief about the coordinated strategy and her history of actions. This chain of beliefs can be extended indefinitely, and a strategy profile can easily be intractable, if not infeasible as an equilibrium. In this chapter, we use the idea of ``keeping each other in the dark" to build strategies where the players can coordinate on their actions and review each other based on their own histories. The players intentionally mix noisy actions with their prescribed actions to cause the other player to think that miscoordination is most likely to have happened because of this noise. A player makes the other player indifferent among all actions after playing the noisy action too often, so the other player does not need to change his action although he detects miscoordination. In this setup, we only use the players' actions without public randomization or cheap-talk communication. The second chapter is about refinement in signaling games with cheap-talk communication. In many applications of signaling games, the sender can both play costly actions and send costless messages to the receiver. Introducing cheap-talk messages to the model can expand the set of equilibria in this game. Given a finite signaling game, I define a signaling game with cheap talk by adding costless messages to the sender's action space. I first find a finite message space that allows all possible equilibrium outcomes to be found in a tractable way, then define a forward-induction refinement of equilibria based on cheap-talk messages. Many forward-induction refinements use the idea that a type of sender can play an action and simultaneously make a speech about the subset of types to which she belongs. Different refinements arise based on different assumptions about which messages are credible to the receiver. I define a message called a strongly self-signaling set, which defines a binary partition over the type space such that for every type, the worst-case equilibrium payoff when the receiver believes that the type belongs to its own subset is larger than the best-case equilibrium payoff when the receiver believes otherwise. I argue that this message is credible when all types in the subset can be better off by sending this message because types in the other subset have no incentive to imitate this message. When there is no such strongly self-signaling subset, we say that the equilibrium is not vulnerable to a partitional message. I prove that, in every finite signaling game with cheap talk, there exists an equilibrium that is not vulnerable to a partitional message. We apply this refinement to various signaling games and compare them to other refinements, especially those implied by stability. The last chapter is about the repeated signaling game between a long-lived sender and a series of short-lived receivers. In the stage game, there is an equilibrium that maximizes the sender's ex-ante payoff, which I call a payoff-maximizing equilibrium. I consider the setting where states are independently realized at each period and the sender can use transfers. In this case, the repeated interaction does not increase the sender's maximum payoff and I argue that a payoff-maximizing equilibrium is a reasonable outcome of the game. However, a payoff-maximizing equilibrium does not necessarily satisfy the intuitive criterion in the stage game. In other words, after the sender learns about her type, she can deviate by playing an off-path action and simultaneously making a speech that if the receiver believes that she is in one of the states where she can be weakly better off from playing this action, then she will be strictly better-off even in the worst case equilibrium. I view it as a viable deviation that the sender can make, and investigate how the sender can deter this through repeated interaction. I define a signaling game induced by an equilibrium in a history by defining the sender's payoff as a weighted sum of the current-period payoff and the continuation payoff from her action. Because the receiver of that period is short-lived, his payoff stays the same. An equilibrium satisfies the dynamic intuitive criterion if it satisfies the intuitive criterion in the induced signaling game in each history. I show that if the sender is sufficiently patient, there exists an equilibrium that achieves the maximum payoff and satisfies the dynamic intuitive criterion. As in repeated games, the sender can vary the continuation payoffs to deter her deviation in each period. Throughout this chapter, I mainly consider the sender's deviation based on forward-induction reasoning.

Download or read book Three Essays on Dynamic Games in Industrial Organization written by Jin-Soo Yoo and published by . This book was released on 1990 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Dynamic Games written by Syed Nageeb Mustafa Ali and published by . This book was released on 2007 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Dynamic Games written by Asaf Plan and published by . This book was released on 2010 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chapter 1: This chapter considers a new class of dynamic, two-player games, where a stage game is continuously repeated but each player can only move at random times that she privately observes. A player's move is an adjustment of her action in the stage game, for example, a duopolist's change of price. Each move is perfectly observed by both players, but a foregone opportunity to move, like a choice to leave one's price unchanged, would not be directly observed by the other player. Some adjustments may be constrained in equilibrium by moral hazard, no matter how patient the players are. For example, a duopolist would not jump up to the monopoly price absent costly incentives. These incentives are provided by strategies that condition on the random waiting times between moves; punishing a player for moving slowly, lest she silently choose not to move. In contrast, if the players are patient enough to maintain the status quo, perhaps the monopoly price, then doing so does not require costly incentives. Deviation from the status quo would be perfectly observed, so punishment need not occur on the equilibrium path. Similarly, moves like jointly optimal price reductions do not require costly incentives. Again, the tempting deviation, to a larger price reduction, would be perfectly observed. This chapter provides a recursive framework for analyzing these games following Abreu, Pearce, and Stacchetti (1990) and the continuous time adaptation of Sannikov (2007). For a class of stage games with monotone public spillovers, like differentiated-product duopoly, I prove that optimal equilibria have three features corresponding to the discussion above: beginning at a "low" position, optimal, upward moves are impeded by moral hazard; beginning at a "high" position, optimal, downward moves are unimpeded by moral hazard; beginning at an intermediate position, optimally maintaining the status quo is similarly unimpeded. Corresponding cooperative dynamics are suggested in the older, non-game-theoretic literature on tacit collusion. Chapter 2: This chapter shows that in finite-horizon games of a certain class, small perturbations of the overall payoff function may yield large changes to unique equilibrium payoffs in periods far from the last. Such perturbations may tie together cooperation across periods in equilibrium, allowing substantial cooperation to accumulate in periods far from the last. Chapter 3: A dynamic choice problem faced by a time-inconsistent individual is typically modeled as a game played by a sequence of her temporal selves, solved by SPNE. It is recognized that this approach yields troublesomely many solutions for infinite-horizon problems, which is often attributed to the existence of implausible equilibria based on self-reward and punishment. This chapter presents a refinement applicable within the special class of strategically constant (SC) problems, which are those where all continuation problems are isomorphic. The refinement requires that each self's strategy be invariant, here that implies history-independence under the isomorphism. I argue that within the class of SC problems, this refinement does little more than rule out self-reward and punishment. The refinement substantially narrows down the set of equilibria in SC problems, but in some cases allows plausible equilibria that are excluded by other refinement approaches. The SC class is limited, but broader than it might seem at first.

Download or read book Essays on Dynamic Games and Mechanism Design written by Ruitian Lang and published by . This book was released on 2014 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: The dissertation considers three topics in dynamic games and mechanism design. In both problems, asymmetric information causes inefficiency in production and allocation. The first chapter considers the inefficiency from the principal's inability to observes the agent's effort or cost of effort, and explores its implication to the principal's response to the combination of the output and the signal about the cost of effort. For example, the principal may punish the agent more harshly for low output when signals suggest that cost of effort is high when the effort is of high value for the principal. This chapter also classifies the long-run behavior of the relationship between the principal and the agent. Depending on whether the agent is strictly risk-averse and whether he is protected by limited liability, the state of the relationship may or may not converge to a stationary state and the stationary state may nor may not depend on the initial condition. The second chapter considers the re-allocation of assets among entrepreneurs with different matching qualities, which contributes to the growth of the whole economy. Due to reasons that are not explicitly modeled, assets are not automatically allocated to entrepreneurs who are best at operating them from the beginning, and this inefficiency is combined with inefficiency in the asset market and potential imperfection of labor contracting. When asset re-allocation can become a main source of economic growth, this chapter argues that imperfection in the labor contracting environment may boost the economic growth. The third chapter assumes that the agent's output is contractible but he can privately acquire more information about his cost of production prior to contracting. Compared to the optimal screening contract, the principal's contract in this case must not only induce the agent to "tell the truth", but also to give the agent the incentive to acquire appropriate amount of information. This may create distortion of allocation to the most efficient type and whether this happens is related to the marginal loss incurred by the principal from the cost of information acquisition.

Download or read book Essays on Dynamic Games written by Puduru Viswanadha Reddy and published by . This book was released on 2011 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Advances in Dynamic Game Theory written by Steffen Jorgensen and published by Springer Science & Business Media. This book was released on 2007-11-15 with total page 722 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of selected contributions gives an account of recent developments in dynamic game theory and its applications, covering both theoretical advances and new applications of dynamic games in such areas as pursuit-evasion games, ecology, and economics. Written by experts in their respective disciplines, the chapters include stochastic and differential games; dynamic games and their applications in various areas, such as ecology and economics; pursuit-evasion games; and evolutionary game theory and applications. The work will serve as a state-of-the art account of recent advances in dynamic game theory and its applications for researchers, practitioners, and advanced students in applied mathematics, mathematical finance, and engineering.

Download or read book Probability Dynamics and Causality written by D. Costantini and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 277 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book is a collection of essays on various issues in philosophy of science, with special emphasis on the foundations of probability and statistics, and quantum mechanics. The main topics, addressed by some of the most outstanding researchers in the field, are subjective probability, Bayesian statistics, probability kinematics, causal decision making, probability and realism in quantum mechanics.

Download or read book Essays on Dynamic Games written by Rahul Deb and published by . This book was released on 2010 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Advances in Dynamic Games and Applications written by Jerzy A. Filar and published by Springer Science & Business Media. This book was released on 2000-03-30 with total page 488 pages. Available in PDF, EPUB and Kindle. Book excerpt: Modem game theory has evolved enonnously since its inception in the 1920s in the works ofBorel and von Neumann and since publication in the 1940s of the seminal treatise "Theory of Games and Economic Behavior" by von Neumann and Morgenstern. The branch of game theory known as dynamic games is-to a significant extent-descended from the pioneering work on differential games done by Isaacs in the 1950s and 1960s. Since those early decades game theory has branched out in many directions, spanning such diverse disciplines as math­ ematics, economics, electrical and electronics engineering, operations research, computer science, theoretical ecology, environmental science, and even political science. The papers in this volume reflect both the maturity and the vitalityofmodem day game theoryin general, andofdynamic games, inparticular. The maturitycan be seen from the sophistication ofthe theorems, proofs, methods, and numerical algorithms contained in these articles. The vitality is manifested by the range of new ideas, new applications, the numberofyoung researchers among the authors, and the expanding worldwide coverage of research centers and institutes where the contributions originated.

Download or read book Essays in Dynamic Games written by Yuhta Ishii and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation presents three independent essays. Chapter 1, which is joint work with Mira Frick, studies a model of innovation adoption by a large population of long-lived consumers who face stochastic opportunities to adopt an innovation of uncertain quality. We study how the potential for social learning in an economy affects consumers' informational incentives and how these in turn shape the aggregate adoption dynamics of an innovation. For a class of Poisson learning processes, we establish the existence and uniqueness of equilibria. In line with empirical findings, equilibrium adoption patterns are either S-shaped or feature successions of concave bursts. In the former case, our analysis predicts a novel saturation effect: Due to informational free-riding, increased opportunities for social learning necessarily lead to temporary slow-downs in learning and do not produce welfare gains.

Download or read book Essays on Dynamic Games and Evolution written by Katsuhiko Aiba and published by . This book was released on 2011 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Dynamic Games written by Lucas Maestri and published by . This book was released on 2011 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Advances in Dynamic Games written by Pierre Cardaliaguet and published by Springer Science & Business Media. This book was released on 2012-09-13 with total page 421 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on various aspects of dynamic game theory, presenting state-of-the-art research and serving as a testament to the vitality and growth of the field of dynamic games and their applications. Its contributions, written by experts in their respective disciplines, are outgrowths of presentations originally given at the 14th International Symposium of Dynamic Games and Applications held in Banff. Advances in Dynamic Games covers a variety of topics, ranging from evolutionary games, theoretical developments in game theory and algorithmic methods to applications, examples, and analysis in fields as varied as mathematical biology, environmental management, finance and economics, engineering, guidance and control, and social interaction. Featured throughout are valuable tools and resources for researchers, practitioners, and graduate students interested in dynamic games and their applications to mathematics, engineering, economics, and management science.​

Download or read book Essays on Dynamic Games written by Shangen Li and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: