Journal Description
Games
Games
is a scholarly, peer-reviewed, open access journal of studies on game theory and its applications published bimonthly online by MDPI.
- Open Access— free for readers, with article processing charges (APC) paid by authors or their institutions.
- High Visibility: indexed within Scopus, ESCI (Web of Science), MathSciNet, zbMATH, RePEc, EconLit, EconBiz, and other databases.
- Rapid Publication: manuscripts are peer-reviewed and a first decision is provided to authors approximately 17.1 days after submission; acceptance to publication is undertaken in 3.9 days (median values for papers published in this journal in the second half of 2023).
- Recognition of Reviewers: reviewers who provide timely, thorough peer-review reports receive vouchers entitling them to a discount on the APC of their next publication in any MDPI journal, in appreciation of the work done.
Impact Factor:
0.9 (2022)
Latest Articles
Dynamic Vertical Foreclosure with Learning-by-Doing Production Technologies
Games 2024, 15(2), 9; https://doi.org/10.3390/g15020009 - 29 Feb 2024
Abstract
Here, we study vertical foreclosure in a dynamic setup with learning-by-doing production technologies. There is a downstream monopoly and an upstream duopoly, where manufacturers produce differentiated products and can gain proficiency through the accumulation of their production. We study the dynamic interactions in
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Here, we study vertical foreclosure in a dynamic setup with learning-by-doing production technologies. There is a downstream monopoly and an upstream duopoly, where manufacturers produce differentiated products and can gain proficiency through the accumulation of their production. We study the dynamic interactions in the vertical chain when the monopolist sets the prices; we find that customer foreclosure may arise in equilibrium when the products are close substitutes and be welfare-enhancing. The rate of learning is lower than the social optimal and a social planner would tend to impose exclusivity more often compared to the downstream monopolist.
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(This article belongs to the Special Issue Industrial Organization and Organizational Economics)
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Imitation Dynamics in Oligopoly Games with Heterogeneous Players
by
Daan Lindeman and Marius I. Ochea
Games 2024, 15(2), 8; https://doi.org/10.3390/g15020008 - 28 Feb 2024
Abstract
We investigate the role and performance of imitative behavior in a class of quantity-setting, Cournot games. Within a framework of evolutionary competition between rational, myopic best-response and imitation heuristics with differential heuristics’ costs, we found that the equilibrium stability depends on the sign
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We investigate the role and performance of imitative behavior in a class of quantity-setting, Cournot games. Within a framework of evolutionary competition between rational, myopic best-response and imitation heuristics with differential heuristics’ costs, we found that the equilibrium stability depends on the sign of the cost differential between the unstable heuristic (Cournot best-response) and the stable one (imitation) and on the intensity of the evolutionary pressure. When this cost differential is positive (i.e., imitation is relatively cheaper vis a vis Cournot), most firms use this heuristic and the Cournot equilibrium is stabilized for market sizes for which it was unstable under Cournot homogeneous learning. However, as the number of firms increases , instability eventually sets in. When the cost differential is negative (imitation is more expensive than Cournot), complicated quantity fluctuations, along with the co-existence of heuristics, arise already for the triopoly game.
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(This article belongs to the Section Learning and Evolution in Games)
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Nash Equilibria in Two-Resource Congestion Games with Player-Specific Payoff Functions
by
Fatima Khanchouche, Samir Sbabou, Hatem Smaoui and Abderrahmane Ziad
Games 2024, 15(2), 7; https://doi.org/10.3390/g15020007 - 26 Feb 2024
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In this paper, we examine the class of congestion games with player-specific payoff functions introduced by Milchtaich, I. (1996). Focusing on the special case of two resources, we give a short and simple method for identifying all Nash equilibria in pure strategies. We
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In this paper, we examine the class of congestion games with player-specific payoff functions introduced by Milchtaich, I. (1996). Focusing on the special case of two resources, we give a short and simple method for identifying all Nash equilibria in pure strategies. We also provide a computation algorithm based on our theoretical analysis.
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A Model of Competing Gangs in Networks
by
Alexis Poindron and Nizar Allouch
Games 2024, 15(2), 6; https://doi.org/10.3390/g15020006 - 21 Feb 2024
Abstract
Two groups produce a network good perceived by a third party, such as a police or military institution, as a ‘public bad’, referred to as ‘crime’ for simplicity. These two groups, considered mafias, are assumed to be antagonists, whether they are enemies or
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Two groups produce a network good perceived by a third party, such as a police or military institution, as a ‘public bad’, referred to as ‘crime’ for simplicity. These two groups, considered mafias, are assumed to be antagonists, whether they are enemies or competitors in the same market, causing harm to each other’s activities. This paper provides guidelines for the policymaker, typically the police, seeking to minimize overall crime levels by internalizing these negative externalities. One specific question is investigated: the allocation of resources for the police. In general, we recommend a balanced crackdown on both antagonists, but an imbalance in group sizes may lead the police to focus on the more criminal group.
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(This article belongs to the Section Applied Game Theory)
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Open AccessEditorial
Game Theory Applications to Socio-Environmental Studies, Development Economics, and Sustainability Research
by
Elkhan Richard Sadik-Zada, Andrea Gatto, Luigi Aldieri, Giovanna Bimonte, Luigi Senatore and Concetto Paolo Vinci
Games 2024, 15(1), 5; https://doi.org/10.3390/g15010005 - 31 Jan 2024
Abstract
The present investigation elaborates on the level of game theory application for the applied and theoretical analyses of climate change and development studies. This editorial shows that the common good character of global climate alongside the increasing internalization of environmental externalities through national
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The present investigation elaborates on the level of game theory application for the applied and theoretical analyses of climate change and development studies. This editorial shows that the common good character of global climate alongside the increasing internalization of environmental externalities through national regulations and international environmental treaties jointly result in the increasing congruence between the context of climate change problems and the game theoretical method. Furthermore, the adoption of the Paris Accord by the overwhelming majority of developing countries as well as the disproportionate vulnerability of the Global South have led to an increasing shift in focus with regard to international development cooperation, from poverty alleviation and economic growth to green growth and circular economy solutions, within developing countries. The underutilization of game theory in the context of development studies is not satisfactory. This paper underlines the importance of implementing an impetus to researchers for scholarly discussions and applications of game theory in a discourse on the following topics: 1. economic growth; 2. climate change mitigation and adaptation; and 3. a broader socioeconomic development.
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(This article belongs to the Special Issue Game Theory Applications to Socio-Environmental Studies, Development Economics and Sustainability Research)
Open AccessArticle
Takeovers, Freezeouts, and Risk Arbitrage
by
Armando Gomes
Games 2024, 15(1), 4; https://doi.org/10.3390/g15010004 - 30 Jan 2024
Abstract
This paper develops a dynamic model of tender offers in which there is trading on the target’s shares during the takeover, and bidders can freeze out target shareholders (compulsorily acquire remaining shares not tendered at the bid price), features that prevail on almost
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This paper develops a dynamic model of tender offers in which there is trading on the target’s shares during the takeover, and bidders can freeze out target shareholders (compulsorily acquire remaining shares not tendered at the bid price), features that prevail on almost all takeovers. We show that trading allows for the entry of arbitrageurs with large blocks of shares who can hold out a freezeout—a threat that forces the bidder to offer a high preemptive bid. There is also a positive relationship between the takeover premium and arbitrageurs’ accumulation of shares before the takeover announcement, and the less liquid the target stock, the stronger this relationship is. Moreover, freezeouts eliminate the free-rider problem, but front-end loaded bids, such as two-tiered and partial offers, do not benefit bidders because arbitrageurs can undo any potential benefit and eliminate the coerciveness of these offers. Similarly, the takeover premium is also largely unrelated to the bidder’s ability to dilute the target’s shareholders after the acquisition, also due to potential arbitrage activity.
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(This article belongs to the Special Issue Game Theory with Applications to Economics)
Open AccessArticle
Nash Bargaining Game Enhanced Global Malmquist Productivity Index for Cross-Productivity Index
by
Reza Fallahnejad, Mohammad Reza Mozaffari, Peter Fernandes Wanke and Yong Tan
Games 2024, 15(1), 3; https://doi.org/10.3390/g15010003 - 24 Jan 2024
Abstract
The Global Malmquist Productivity Index (GMPI) stands as an evolution of the Malmquist Productivity Index (MPI), emphasizing global technology to incorporate all-time versions of Decision-Making Units (DMUs). This paper introduces a novel approach, integrating the Nash Bargaining Game model with GMPI to establish
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The Global Malmquist Productivity Index (GMPI) stands as an evolution of the Malmquist Productivity Index (MPI), emphasizing global technology to incorporate all-time versions of Decision-Making Units (DMUs). This paper introduces a novel approach, integrating the Nash Bargaining Game model with GMPI to establish a Cross-Productivity Index. Our primary objective is to develop a comprehensive framework utilizing the Nash Bargaining Game model to derive equitable common weights for different time versions of DMUs. These weights serve as a fundamental component for cross-evaluation based on GMPI, facilitating a holistic assessment of DMU performance over varying time periods. The proposed index is designed with essential properties: feasibility, non-arbitrariness concerning the base time period, technological consistency across periods, and weight uniformity for GMPI calculations between two-time versions of a unit. This research amalgamates cross-evaluation and global technology while employing geometric averages to derive a conclusive cross-productivity index. The core motivation behind this methodology is to establish a reliable and fair means of evaluating DMU performance, integrating insights from Nash Bargaining Game principles and GMPI. This paper elucidates the rationale behind merging the Nash Bargaining Game model with GMPI and outlines the objectives to provide a comprehensive Cross-Productivity Index, aiming to enhance the robustness and reliability of productivity assessments across varied time frames.
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(This article belongs to the Section Applied Game Theory)
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Equilibrium Selection in Hawk–Dove Games
by
Mario Blázquez de Paz and Nikita Koptyug
Games 2024, 15(1), 2; https://doi.org/10.3390/g15010002 - 31 Dec 2023
Abstract
We apply three equilibrium selection techniques to study which equilibrium is selected in a hawk–dove game with a multiplicity of equilibria. By using a uniform-price auction as an illustrative example, we find that when the demand in the auction is low or intermediate,
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We apply three equilibrium selection techniques to study which equilibrium is selected in a hawk–dove game with a multiplicity of equilibria. By using a uniform-price auction as an illustrative example, we find that when the demand in the auction is low or intermediate, the tracing procedure method of Harsanyi and Selten (1988) and the quantal response method of McKelvey and Palfrey (1998) select the same equilibrium. When the demand is high, the tracing procedure method does not select any equilibrium, but the quantal response method still selects the same equilibrium as when the demand is low or intermediate. The robustness to strategic uncertainty method of Andersson, Argenton and Weibull (2014) selects two of the multiple equilibria irrespective of the demand size. We also analyze the impact of an increase in the minimum bid allowed by the auctioneer in the equilibrium selection.
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(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
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Testing Game Theory of Mind Models for Artificial Intelligence
by
Michael S. Harré and Husam El-Tarifi
Games 2024, 15(1), 1; https://doi.org/10.3390/g15010001 - 28 Dec 2023
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In this article, we investigate the relative performance of artificial neural networks and structural models of decision theory by training 69 artificial intelligence models on a dataset of 7080 human decisions in extensive form games. The objective is to compare the predictive power
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In this article, we investigate the relative performance of artificial neural networks and structural models of decision theory by training 69 artificial intelligence models on a dataset of 7080 human decisions in extensive form games. The objective is to compare the predictive power of AIs that use a representation of another agent’s decision-making process in order to improve their own performance during a strategic interaction. We use human game theory data for training and testing. Our findings hold implications for understanding how AIs can use constrained structural representations of other decision makers, a crucial aspect of our ‘Theory of Mind’. We show that key psychological features, such as the Weber–Fechner law for economics, are evident in our tests, that simple linear models are highly robust, and that being able to switch between different representations of another agent is a very effective strategy. Testing different models of AI-ToM paves the way for the development of learnable abstractions for reasoning about the mental states of ‘self’ and ‘other’, thereby providing further insights for fields such as social robotics, virtual assistants, and autonomous vehicles, and fostering more natural interactions between people and machines.
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Cooperation and Coordination in Threshold Public Goods Games with Asymmetric Players
by
Xinmiao An, Yali Dong, Xiaomin Wang and Boyu Zhang
Games 2023, 14(6), 76; https://doi.org/10.3390/g14060076 - 17 Dec 2023
Cited by 1
Abstract
In this paper, we study cooperation and coordination in a threshold public goods game with asymmetric players where players have different endowments , productivities , and rewards . In general, this game has a defective Nash equilibrium
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In this paper, we study cooperation and coordination in a threshold public goods game with asymmetric players where players have different endowments , productivities , and rewards . In general, this game has a defective Nash equilibrium (NE), in which no one contributes, and multiple cooperative NEs, in which the group’s collective contribution equals the threshold. We then study how multiple dimensions of inequality influence people’s cooperation and coordination. We show that heterogeneity in can promote cooperation in the sense that the existence condition of the defective NE becomes stricter. Furthermore, players with higher are likely to contribute more at a cooperative NE in terms of collective contribution (i.e., absolute contribution multiplied by productivity).
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(This article belongs to the Special Issue Competition, Coordination, and Cooperation: Theory and Evidence)
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Collaborative Cost Multi-Agent Decision-Making Algorithm with Factored-Value Monte Carlo Tree Search and Max-Plus
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Nii-Emil Alexander-Reindorf and Paul Cotae
Games 2023, 14(6), 75; https://doi.org/10.3390/g14060075 - 17 Dec 2023
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In this paper, we describe the Factored Value MCTS Hybrid Cost-Max-Plus algorithm, a collection of decision-making algorithms (centralized, decentralized, and hybrid) for a multi-agent system in a collaborative setting that considers action costs. Our proposed algorithm is made up of two steps. In
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In this paper, we describe the Factored Value MCTS Hybrid Cost-Max-Plus algorithm, a collection of decision-making algorithms (centralized, decentralized, and hybrid) for a multi-agent system in a collaborative setting that considers action costs. Our proposed algorithm is made up of two steps. In the first step, each agent searches for the best individual actions with the lowest cost using the Monte Carlo Tree Search (MCTS) algorithm. Each agent’s most promising activities are chosen and presented to the team. The Hybrid Cost Max-Plus method is utilized for joint action selection in the second step. The Hybrid Cost Max-Plus algorithm improves the well-known centralized and distributed Max-Plus algorithm by incorporating the cost of actions in agent interactions. The Max-Plus algorithm employed the Coordination Graph framework, which exploits agent dependencies to decompose the global payoff function as the sum of local terms. In terms of the number of agents and their interactions, the suggested Factored Value MCTS-Hybrid Cost-Max-Plus method is online, anytime, distributed, and scalable. Our contribution competes with state-of-the-art methodologies and algorithms by leveraging the locality of agent interactions for planning and acting utilizing MCTS and Max-Plus algorithms.
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Generalized Hyperbolic Discounting in Security Games of Timing
by
Jonathan Merlevede, Benjamin Johnson, Jens Grossklags and Tom Holvoet
Games 2023, 14(6), 74; https://doi.org/10.3390/g14060074 - 30 Nov 2023
Abstract
In recent years, several high-profile incidents have spurred research into games of timing. A framework emanating from the FlipIt model features two covert agents competing to control a single contested resource. In its basic form, the resource exists forever while generating value at
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In recent years, several high-profile incidents have spurred research into games of timing. A framework emanating from the FlipIt model features two covert agents competing to control a single contested resource. In its basic form, the resource exists forever while generating value at a constant rate. As this research area evolves, attempts to introduce more economically realistic models have led to the application of various forms of economic discounting to the contested resource. This paper investigates the application of a two-parameter economic discounting method, called generalized hyperbolic discounting, and characterizes the game’s Nash equilibrium conditions. We prove that for agents discounting such that accumulated value generated by the resource diverges, equilibrium conditions are identical to those of non-discounting agents. The methodology presented in this paper generalizes the findings of several other studies and may be of independent interest when applying economic discounting to other models.
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(This article belongs to the Special Issue Game Theory for Cybersecurity and Privacy)
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Factors in Learning Dynamics Influencing Relative Strengths of Strategies in Poker Simulation
by
Aaron Foote, Maryam Gooyabadi and Nikhil Addleman
Games 2023, 14(6), 73; https://doi.org/10.3390/g14060073 - 29 Nov 2023
Abstract
Poker is a game of skill, much like chess or go, but distinct as an incomplete information game. Substantial work has been done to understand human play in poker, as well as the optimal strategies in poker. Evolutionary game theory provides another avenue
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Poker is a game of skill, much like chess or go, but distinct as an incomplete information game. Substantial work has been done to understand human play in poker, as well as the optimal strategies in poker. Evolutionary game theory provides another avenue to study poker by considering overarching strategies, namely rational and random play. In this work, a population of poker playing agents is instantiated to play the preflop portion of Texas Hold’em poker, with learning and strategy revision occurring over the course of the simulation. This paper aims to investigate the influence of learning dynamics on dominant strategies in poker, an area that has yet to be investigated. Our findings show that rational play emerges as the dominant strategy when loss aversion is included in the learning model, not when winning and magnitude of win are of the only considerations. The implications of our findings extend to the modeling of sub-optimal human poker play and the development of optimal poker agents.
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(This article belongs to the Section Applied Game Theory)
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Quantum Tapsilou—A Quantum Game Inspired by the Traditional Greek Coin Tossing Game Tapsilou
by
Kalliopi Kastampolidou and Theodore Andronikos
Games 2023, 14(6), 72; https://doi.org/10.3390/g14060072 - 20 Nov 2023
Abstract
This paper introduces a new quantum game called Quantum Tapsilou that is inspired by the classical traditional Greek coin tossing game tapsilou. The new quantum game, despite its increased complexity and scope, retains the most important characteristic of the traditional game. In the
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This paper introduces a new quantum game called Quantum Tapsilou that is inspired by the classical traditional Greek coin tossing game tapsilou. The new quantum game, despite its increased complexity and scope, retains the most important characteristic of the traditional game. In the classical game, both players have probability to win. The quantum version retains this characteristic feature, which is that both players have the same probability to win, but only now this probability varies considerably and depends on previous moves and choices. The two most important novelties of Quantum Tapsilou can be attributed to its implementation of entanglement via the use of rotation gates instead of Hadamard gates, which generates Bell-like states with unequal probability amplitudes, and the integral use of groups. In Quantum Tapsilou both players agree on a specific cyclic rotation group of order n, for some sufficiently large n. The game is based on the chosen group, in the sense that both players will draw their moves from its elements. More specifically, both players will pick rotations from this group to realize their actions using the corresponding rotation gates. In the Quantum Tapsilou game, it is equally probable for both players to win. This fact is in accordance with a previous result in the literature showing that quantum games where both players choose their actions from the same group, exhibit perfect symmetry by providing each player with the possibility to pick the move that counteracts the other player’s action.
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(This article belongs to the Special Issue Applications of Game Theory with Mathematical Methods)
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Countervailing Conflicts of Interest in Delegation Games
by
Saori Chiba and Kaiwen Leong
Games 2023, 14(6), 71; https://doi.org/10.3390/g14060071 - 16 Nov 2023
Abstract
In this paper, we investigate optimal delegation mechanisms in the presence of countervailing conflicts of interest in the context of principal–agent problems. We introduce two dimensions of conflict of interest—pandering incentives related to the outside option and project biases. We compare three delegation
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In this paper, we investigate optimal delegation mechanisms in the presence of countervailing conflicts of interest in the context of principal–agent problems. We introduce two dimensions of conflict of interest—pandering incentives related to the outside option and project biases. We compare three delegation mechanisms: full delegation, veto-based delegation, and communication (no delegation). Contrary to conventional one-dimensional conflict models, our findings reveal a non-monotonic relationship between pandering incentives and bias. These conflicts counterbalance each other, resulting in a principal’s benefit from delegation not strictly decreasing with increased bias. Surprisingly, delegation to a biased agent can be advantageous in certain scenarios. This research sheds light on the complex dynamics of delegation mechanisms when confronted with countervailing conflicts of interest, offering insights into decision-making in principal–agent relationships.
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(This article belongs to the Section Applied Game Theory)
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Location of Firms and Outsourcing
by
Stefano Colombo and Arijit Mukherjee
Games 2023, 14(6), 70; https://doi.org/10.3390/g14060070 - 31 Oct 2023
Abstract
We analyze the location of final goods producers under spatial competition with strategic input price determination by firm-specific input suppliers when the final goods producers undertake complete outsourcing or bi-sourcing. Under complete outsourcing, the final goods producers locate closer as the distance between
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We analyze the location of final goods producers under spatial competition with strategic input price determination by firm-specific input suppliers when the final goods producers undertake complete outsourcing or bi-sourcing. Under complete outsourcing, the final goods producers locate closer as the distance between the input suppliers decreases, but the distance between the final goods producers may increase or decrease with the transportation costs of the consumers and the transportation costs between the input suppliers and the final goods producers depending on the distance between the input suppliers. The possibility of bi-sourcing reduces the benefit from saving the transportation costs between the input suppliers and the final goods producers, and creates effects which are opposite to those under complete outsourcing. Thus, our results differ significantly from the extant literature considering either no strategic input price determination or strategic input price determination under competition in the input market. We also discuss the implications on the profits, consumer surplus and welfare, and the implications of endogenous location choice of the input suppliers.
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(This article belongs to the Special Issue Game Theory in Economics: Recent Advances in Spatial Competition)
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Vertical Relationships with Hidden Interactions
by
Jaesoo Kim and Dongsoo Shin
Games 2023, 14(6), 69; https://doi.org/10.3390/g14060069 - 31 Oct 2023
Abstract
In an agency model with adverse selection, we study how hidden interactions between agents affect the optimal contract. The principal employs two agents who learn their task environments through their involvement. The principal cannot observe the task environments. It is important to note
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In an agency model with adverse selection, we study how hidden interactions between agents affect the optimal contract. The principal employs two agents who learn their task environments through their involvement. The principal cannot observe the task environments. It is important to note that hidden interactions, such as acts of sabotage or help between the agents, have the potential to alter each other’s task environments. Our analysis encompasses two distinct organizational structures: competition and cooperation. Without hidden interactions, the competitive structure is optimal because the cooperative structure only provides the agents with more flexibility to collusively misrepresent their task environments. With hidden interactions, however, the cooperative structure induces the agents to help each other to improve the task environments while removing sabotaging incentives at no cost once collusion is deterred. As a result, the cooperative structure can be optimal in such a case. We discuss the link between production technology and organizational structure, finding that complementarity in production favors cooperative structures.
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(This article belongs to the Special Issue Industrial Organization and Organizational Economics)
Open AccessCommunication
A Discrete-Time Homing Problem with Two Optimizers
by
Mario Lefebvre
Games 2023, 14(6), 68; https://doi.org/10.3390/g14060068 - 27 Oct 2023
Abstract
A stochastic difference game is considered in which a player wants to minimize the time spent by a controlled one-dimensional symmetric random walk in the continuation region
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A stochastic difference game is considered in which a player wants to minimize the time spent by a controlled one-dimensional symmetric random walk in the continuation region , and the second player seeks to maximize the survival time in C. The process starts at and the game ends the first time . An exact expression is derived for the value function, from which the optimal solution is obtained, and particular problems are solved explicitly.
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(This article belongs to the Special Issue Applications of Game Theory with Mathematical Methods)
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On a Special Two-Person Dynamic Game
by
Akio Matsumoto, Ferenc Szidarovszky and Maryam Hamidi
Games 2023, 14(6), 67; https://doi.org/10.3390/g14060067 - 24 Oct 2023
Abstract
The asymptotical properties of a special dynamic two-person game are examined under best-response dynamics in both discrete and continuos time scales. The direction of strategy changes by the players depend on the best responses to the strategies of the competitors and on their
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The asymptotical properties of a special dynamic two-person game are examined under best-response dynamics in both discrete and continuos time scales. The direction of strategy changes by the players depend on the best responses to the strategies of the competitors and on their own strategies. Conditions are given first for the local asymptotical stability of the equilibrium if instantaneous data are available to the players concerning all current strategies. Next, it is assumed that only delayed information is available about one or more strategies. In the discrete case, the presence of delays has an effect on only the order of the governing difference equations. Under continuous scales, several possibilities are considered: each player has a delay in the strategy of its competitor; player 1 has identical delays in both strategies; the players have identical delays in their own strategies; player 1 has different delays in both strategies; and the players have different delays in their own strategies. In all cases, it is assumed that the equilibrium is asymptotically stable without delays, and we examine how delays can make the equilibrium unstable. For small delays, the stability is preserved. In the cases of one-delay models, the critical value of the delay is determined when stability changes to instability. In the cases of two and three delays, the stability-switching curves are determined in the two-dimensional space of the delays, where stability becomes lost if the delay pair crosses this curve. The methodology is different for the one-, two-, and three-delay cases outlined in this paper.
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(This article belongs to the Special Issue Learning and Evolution in Games, 1st Edition)
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Centralized versus Decentralized Cleanup of River Water Pollution: An Application to the Ganges
by
Amitrajeet A. Batabyal and Hamid Beladi
Games 2023, 14(5), 66; https://doi.org/10.3390/g14050066 - 07 Oct 2023
Cited by 4
Abstract
We exploit the public good attributes of Ganges water pollution cleanup and theoretically analyze an aggregate economy of two cities—Kanpur and Varanasi—through which the Ganges flows. Our specific objective is to study whether water pollution cleanup in these two cities ought to be
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We exploit the public good attributes of Ganges water pollution cleanup and theoretically analyze an aggregate economy of two cities—Kanpur and Varanasi—through which the Ganges flows. Our specific objective is to study whether water pollution cleanup in these two cities ought to be provided in a centralized or in a decentralized manner. We first determine the efficient cleanup amounts that maximize the aggregate surplus from making the Ganges cleaner in the two cities. Second, we compute the optimal amount of water pollution cleanup in the two cities in a decentralized regime in which spending on cleanup is financed by a uniform tax on the city residents. Third, we ascertain the optimal amount of water pollution cleanup in the two cities in a centralized regime subject to equal provision of cleanup and cost sharing. Fourth, we show that if the two cities have the same preference for pollution cleanup, then centralization is preferable to decentralization as long as there is a spillover from pollution cleanup. Finally, we show that if the two cities have dissimilar preferences for pollution cleanup, then centralization is preferable to decentralization as long as the spillover exceeds a certain threshold.
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(This article belongs to the Section Applied Game Theory)
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