Games

10 pages, 2074 KiB

Open AccessArticle

Cournot Duopoly with Cost Asymmetry and Balanced Budget Specific Taxes and Subsidies

by Olivia Kay

Games 2024, 15(4), 29; https://doi.org/10.3390/g15040029 - 19 Aug 2024

Viewed by 1236

This paper extends the Cournot duopoly model by allowing the government to impose firm-dependent specific taxes or subsidies while keeping the budget balanced. It considers two possible government goals: maximizing the social surplus and maximizing the consumer surplus. It shows that, with identical [...] Read more.

This paper extends the Cournot duopoly model by allowing the government to impose firm-dependent specific taxes or subsidies while keeping the budget balanced. It considers two possible government goals: maximizing the social surplus and maximizing the consumer surplus. It shows that, with identical firms, the best government policy is not to intervene. In the case of cost asymmetry, social surplus and consumer surplus maximization goals require opposite strategies: to maximize the social surplus, the government should tax the high-cost firm driving the economy toward monopoly and increasing productive efficiency at the expense of lower production. In the case of consumer surplus maximization, the tax should be imposed on the low-cost firm reducing the gap between the firms’ outputs. Such a strategy, however, increases productive inefficiency and reduces the social surplus. Full article

(This article belongs to the Section Applied Game Theory)

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27 pages, 363 KiB

Open AccessReview

A Review of Attacker–Defender Games and Cyber Security

by Kjell Hausken, Jonathan W. Welburn and Jun Zhuang

Games 2024, 15(4), 28; https://doi.org/10.3390/g15040028 - 14 Aug 2024

Cited by 2 | Viewed by 2977

Abstract

The focus of this review is the long and broad history of attacker–defender games as a foundation for the narrower and shorter history of cyber security. The purpose is to illustrate the role of game theory in cyber security and which areas have [...] Read more.

The focus of this review is the long and broad history of attacker–defender games as a foundation for the narrower and shorter history of cyber security. The purpose is to illustrate the role of game theory in cyber security and which areas have received attention and to indicate future research directions. The methodology uses the search terms game theory, attack, defense, and cyber security in Web of Science, augmented with the authors’ knowledge of the field. Games may involve multiple attackers and defenders over multiple periods. Defense involves security screening and inspection, the detection of invaders, jamming, secrecy, and deception. Incomplete information is reviewed due to its inevitable presence in cyber security. The findings pertain to players sharing information weighted against the security investment, influenced by social planning. Attackers stockpile zero-day cyber vulnerabilities. Defenders build deterrent resilient systems. Stochastic cyber security games play a role due to uncertainty and the need to build probabilistic models. Such games can be further developed. Cyber security games based on traffic and transportation are reviewed; they are influenced by the more extensive communication of GPS data. Such games should be extended to comprise air, land, and sea. Finally, cyber security education and board games are reviewed, which play a prominent role. Full article

(This article belongs to the Special Issue Game Theory and Risk Analysis)

26 pages, 404 KiB

Open AccessEditor’s ChoiceArticle

On Hurwicz Preferences in Psychological Games

by Giuseppe De Marco, Maria Romaniello and Alba Roviello

Games 2024, 15(4), 27; https://doi.org/10.3390/g15040027 - 30 Jul 2024

Viewed by 1509

Abstract

The literature on strategic ambiguity in classical games provides generalized notions of equilibrium in which each player best responds to ambiguous or imprecise beliefs about his opponents’ strategic choices. In a recent paper, strategic ambiguity has been extended to psychological games, by [...] Read more.

The literature on strategic ambiguity in classical games provides generalized notions of equilibrium in which each player best responds to ambiguous or imprecise beliefs about his opponents’ strategic choices. In a recent paper, strategic ambiguity has been extended to psychological games, by taking into account ambiguous hierarchies of beliefs and max–min preferences. Given that this kind of preference seems too restrictive as a general method to evaluate decisions, in this paper we extend the analysis by taking into account

α

-max–min preferences in which decisions are evaluated by a convex combination of the worst-case (with weight

α

) and the best-case (with weight

1 - α

) scenarios. We define the

α

-max–min psychological Nash equilibrium; an illustrative example shows that the set of equilibria is affected by the parameter

α

and the larger the ambiguity, the greater the effect. We also provide a result of stability of the equilibria with respect to perturbations that involve the attitudes toward ambiguity, the structure of ambiguity, and the payoff functions: converging sequences of equilibria of perturbed games converge to equilibria of the unperturbed game as the perturbation vanishes. Surprisingly, a final example shows that the existence of equilibria is not guaranteed for every value of

α

. Full article

11 pages, 245 KiB

Open AccessArticle

Auctioning off a Non-Rivalrous Good with Interference

by Alison Watts

Games 2024, 15(4), 26; https://doi.org/10.3390/g15040026 - 11 Jul 2024

Viewed by 1227

Abstract

Auctions are a prevalent way to exchange goods and are well-studied for the exchange of rivalrous goods, but are less studied for non-rivalrous goods. I examine an auction framework where the good sold can be used simultaneously by multiple bidders if their use [...] Read more.

Auctions are a prevalent way to exchange goods and are well-studied for the exchange of rivalrous goods, but are less studied for non-rivalrous goods. I examine an auction framework where the good sold can be used simultaneously by multiple bidders if their use does not conflict with others; this simultaneous use directly affects the efficiency of the auction. A timely example includes the auctioning off of a radio spectrum by a licensed primary user to unlicensed secondary users who can use the spectrum simultaneously if they are located far enough apart to not cause interference. I examine a uniform price auction over non-conflicting groups and examine how non-rivalry impacts both efficiency and collusion. Conditions are given under which an auction over groups generates higher social welfare than an individual auction. Additional conditions are given under which collusion in a group auction results in higher prices. Full article

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23 pages, 2937 KiB

Open AccessArticle

One Justice for All? Social Dilemmas, Environmental Risks and Different Notions of Distributive Justice

by Ulf Liebe, Heidi Bruderer Enzler, Andreas Diekmann and Peter Preisendörfer

Games 2024, 15(4), 25; https://doi.org/10.3390/g15040025 - 1 Jul 2024

Cited by 1 | Viewed by 1844

Abstract

A just or fair distribution of environmental bads and goods is important for solving environmental social dilemmas and is a core idea of environmental justice politics and research. Environmental justice is mostly associated with egalitarianism as the sole justice principle for all people. [...] Read more.

A just or fair distribution of environmental bads and goods is important for solving environmental social dilemmas and is a core idea of environmental justice politics and research. Environmental justice is mostly associated with egalitarianism as the sole justice principle for all people. In contrast, we argue that it is important to uncover and consider heterogeneity in justice concerns to achieve socially accepted solutions to environmental social dilemmas. With noise pollution as an example, we explore citizens’ preferences for justice principles regarding the allocation of politically initiated environmental benefits. In our survey in four European cities, respondents were asked to choose between different outcomes of a program to reduce road traffic noise in line with the following four notions of distributive justice: equal shares, equal outcomes, the greatest benefit for the least advantaged (Rawls), and the greatest benefit for the greatest number (Bentham). We found that most respondents chose Rawls’ principle, a preference that was stable over time but weaker when explicitly introducing the veil of ignorance. The preference for Rawls notwithstanding, we observed substantial heterogeneity in justice preferences. Multinomial logit analyses of survey and geo-referenced data on noise exposure showed that respondents with a higher socio-economic status and lower exposure to traffic noise were more likely to choose Rawls’ principle. Taken together, our study confirms the prominence of Rawls’ principle, demonstrates empirically the heterogeneity of justice preferences, and calls for more direct measurements of such preferences in research on environmental social dilemmas, environmental justice, and beyond. Full article

(This article belongs to the Special Issue Fairness in Non-cooperative Strategic Interactions)

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25 pages, 434 KiB

Open AccessArticle

Strategic Synergies: Unveiling the Interplay of Game Theory and Cultural Dynamics in a Globalized World

by Yufei Wang, Mangirdas Morkūnas and Jinzhao Wei

Games 2024, 15(4), 24; https://doi.org/10.3390/g15040024 - 30 Jun 2024

Viewed by 4141

Abstract

This literature review focuses on cultural-related studies and game theory. First of all, it analyzes how social dynamics and strategic interactions can be shaped by different cultural environments. Secondly, it examines how cultural norms can affect strategic decision making and how game theory [...] Read more.

This literature review focuses on cultural-related studies and game theory. First of all, it analyzes how social dynamics and strategic interactions can be shaped by different cultural environments. Secondly, it examines how cultural norms can affect strategic decision making and how game theory could predict cooperations and conflicts. Overall, this study aims to highlight the applicability of game theory in the modeling of cultural transformation and its interaction with behavioral economics. Moreover, this study also attempts to underscore the significance of game theory and cultural diversity in communication methods, plus the process of policy formulation. In addition to the above topics, the robustness of cross-cultural social norms, the economic study of different cultural heritage, and the cultural effects of tourism under game theory are also focal points of this study. Finally, this review delves into how game theory can represent social interactions, emphasizing the need to incorporate extensive cultural knowledge in order to enhance the efficacy of game-theoretic model’s applications. Full article

23 pages, 1064 KiB

Open AccessArticle

Payment Systems, Insurance, and Agency Problems in Healthcare: A Medically Framed Real-Effort Experiment

by Manela Karunadasa and Katri K. Sieberg

Games 2024, 15(4), 23; https://doi.org/10.3390/g15040023 - 28 Jun 2024

Viewed by 2081

Abstract

Background: This study aims to examine the impact of different healthcare payment systems, specifically salary and fee-for-service (FFS) models, on service provision, patient welfare, and quality of care. The influence of payment models on healthcare delivery and patient outcomes, as well as [...] Read more.

Background: This study aims to examine the impact of different healthcare payment systems, specifically salary and fee-for-service (FFS) models, on service provision, patient welfare, and quality of care. The influence of payment models on healthcare delivery and patient outcomes, as well as how these models affect doctors’ decision-making based on patients’ insurance coverage, is not well understood. Methods: A medically framed real-effort task experiment was conducted. This study compared two payment systems: salary and FFS models. Key outcomes measured included the level of service provision, patient welfare, and quality of care. The analysis focused on how financial incentives and patient insurance coverage influenced healthcare decisions. Results: This study found overtreatment in FFS models and undertreatment in salary-based models. Healthcare decisions are significantly influenced by financial incentives and patient needs. Specifically, in FFS models, decisions are driven by self-interest, while in salary models, they are guided by patient needs. Within the FFS model, insurance coverage affects doctors’ decisions and patients’ benefits. Insured patients often receive unnecessary or incorrect procedures, indicating a supply-side moral hazard. Conclusions: Financial incentives and patient insurance coverage significantly influence healthcare decisions, with FFS models promoting self-interested decision-making and salary models focusing more on patient needs. This study contributes to the literature on supply-side moral hazard to health economics studies that use laboratory experiments to model medical decision-making. Full article

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29 pages, 1001 KiB

Open AccessArticle

Fairness and Transparency in One-to-Many Bargaining with Complementarity: An Experimental Study

by Vincent Mak and Rami Zwick

Games 2024, 15(4), 22; https://doi.org/10.3390/g15040022 - 25 Jun 2024

Viewed by 2020

Abstract

We report an experiment designed to study bargaining behavior between one buyer and multiple sellers with complementarity and how it is influenced by fairness concern and information transparency. We base our setup on a structured alternating-offer bargaining model in which a buyer procures [...] Read more.

We report an experiment designed to study bargaining behavior between one buyer and multiple sellers with complementarity and how it is influenced by fairness concern and information transparency. We base our setup on a structured alternating-offer bargaining model in which a buyer procures complementary items from two heterogeneous sellers with endogenous choice of the order of bargaining. In addition, we implemented an information transparency manipulation regarding whether the sellers were informed about each other’s offers/counteroffers with the buyer. Experimental behavior exhibited deviations from equilibrium predictions that did not differ significantly by information condition, suggesting that sellers were not significantly influenced by direct social comparison between each other. Further analysis suggests that each seller demanded splitting the value of the deal approximately half-half with the buyer as a normative fairness benchmark. The buyers, on the other hand, did not have a demand for fairness that was based on a fairness benchmark. Full article

(This article belongs to the Special Issue Fairness in Non-cooperative Strategic Interactions)

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Games, Volume 15, Issue 4 (August 2024) – 8 articles

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