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10 pages, 261 KB

Open AccessArticle

Asymmetric Reimbursement and Contingent Fees in Environmental Conflicts: Observable vs. Unobservable Contracts

by Sung-Hoon Park and Chad E. Settle

Games 2023, 14(4), 55; https://doi.org/10.3390/g14040055 - 28 Jul 2023

Cited by 2 | Viewed by 2218

We investigate the impact of observability of contracts between a plaintiff and his attorney on both the efficiency of the environmental conflict and the fairness of the resulting outcome from the environmental conflict. By including two specific game-theoretic models (an observable-contract game and [...] Read more.

We investigate the impact of observability of contracts between a plaintiff and his attorney on both the efficiency of the environmental conflict and the fairness of the resulting outcome from the environmental conflict. By including two specific game-theoretic models (an observable-contract game and an unobservable-contract game), we find two key results: (i) The unobservability of a contract may increase inefficiency of the environmental conflict in terms of legal efforts; however, (ii) the unobservability of a contract may increase the fairness of the outcome in terms of the plaintiff’s probability of winning the contest. Full article

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

6 pages, 253 KB

Open AccessArticle

Equivalent Modes of Reimbursement in Augmented Contests

by Chen Cohen, Roy Darioshi and Shmuel Nitzan

Games 2023, 14(2), 31; https://doi.org/10.3390/g14020031 - 31 Mar 2023

Cited by 1 | Viewed by 1696

Abstract

This article presents an equivalence theorem in the context of Tullock’s augmented lottery contest with external or internal cost reimbursement. Three alternative modes of reimbursement are studied. The equivalence implies that, even though the augmented contest is vulnerable to framing biases, it is [...] Read more.

This article presents an equivalence theorem in the context of Tullock’s augmented lottery contest with external or internal cost reimbursement. Three alternative modes of reimbursement are studied. The equivalence implies that, even though the augmented contest is vulnerable to framing biases, it is strategically neutral. Full article

11 pages, 303 KB

Open AccessEditor’s ChoiceArticle

Rent Dissipation in Simple Tullock Contests

by Alex Dickson, Ian A. MacKenzie and Petros G. Sekeris

Games 2022, 13(6), 83; https://doi.org/10.3390/g13060083 - 13 Dec 2022

Cited by 6 | Viewed by 4891

Abstract

We investigate observed rent dissipation—the ratio of the total costs of rent seeking to the monetary value of the rent—in winner-take-all and share contests, where preferences are more general than usually assumed in the literature. With concave valuation of the rent, we find [...] Read more.

We investigate observed rent dissipation—the ratio of the total costs of rent seeking to the monetary value of the rent—in winner-take-all and share contests, where preferences are more general than usually assumed in the literature. With concave valuation of the rent, we find that contests can exhibit observed over-dissipation if the contested rent is below a threshold and yet observed under-dissipation with large rents: the nature of preferences implies contestants are relatively effortful in contesting small rents. Considering more general preferences in contests thus allows us to reconcile the Tullock paradox—where rent-seeking levels are relatively small despite the contested rent being sizeable—with observed over-dissipation of rents in experimental settings, where contested rents are arguably small. Full article

(This article belongs to the Special Issue Advances in the Theory and Applications of Contests and Tournaments)

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20 pages, 323 KB

Open AccessEditor’s ChoiceArticle

Assortative Matching by Lottery Contests

by Chen Cohen, Ishay Rabi and Aner Sela

Games 2022, 13(5), 64; https://doi.org/10.3390/g13050064 - 29 Sep 2022

Cited by 1 | Viewed by 2607

Abstract

We study two-sided matching contests with two sets, A and B, each of which includes a finite number of heterogeneous agents with commonly known types. The agents in each set compete in a lottery (Tullock) contest, and then are assortatively matched, namely, [...] Read more.

We study two-sided matching contests with two sets, A and B, each of which includes a finite number of heterogeneous agents with commonly known types. The agents in each set compete in a lottery (Tullock) contest, and then are assortatively matched, namely, the winner of set A is matched with the winner of set B and so on until all the agents in the set with the smaller number of agents are matched. Each agent has a match value that depends on their own type and the type of their match. We assume that the agents’ efforts do not affect their match values and that they have a positive effect on welfare. Therefore, an interior equilibrium in which at least some of the agents are active is welfare superior to a corner equilibrium in which the agents choose to be non-active. We analyze the conditions under which there exists a (partial) interior equilibrium where at least some of the agents compete against each other and exert positive efforts. Full article

(This article belongs to the Special Issue Advances in the Theory and Applications of Contests and Tournaments)

23 pages, 682 KB

Open AccessArticle

A Game-Theoretic Rent-Seeking Framework for Improving Multipath TCP Performance

by Shiva Raj Pokhrel and Carey Williamson

Future Internet 2022, 14(9), 257; https://doi.org/10.3390/fi14090257 - 29 Aug 2022

Viewed by 2604

Abstract

There is no well-defined utility function for existing multipath TCP algorithms. Therefore, network utility maximization (NUM) for MPTCP is a complex undertaking. To resolve this, we develop a novel condition under which Kelly’s NUM mechanism may be used to explicitly compute the equilibrium. [...] Read more.

There is no well-defined utility function for existing multipath TCP algorithms. Therefore, network utility maximization (NUM) for MPTCP is a complex undertaking. To resolve this, we develop a novel condition under which Kelly’s NUM mechanism may be used to explicitly compute the equilibrium. We accomplish this by defining a new utility function for MPTCP by employing Tullock’s rent-seeking paradigm from game theory. We investigate the convergence of no-regret learning in the underlying network games with continuous actions. Based on our understanding of the design space, we propose an original MPTCP algorithm that generalizes existing algorithms and strikes a good balance among the important properties. We implemented this algorithm in the Linux kernel, and we evaluated its performance experimentally. Full article

(This article belongs to the Special Issue 5G Wireless Communication Networks)

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12 pages, 321 KB

Open AccessEditor’s ChoiceArticle

Level-k Models and Overspending in Contests

by Malin Arve and Marco Serena

Games 2022, 13(3), 45; https://doi.org/10.3390/g13030045 - 10 Jun 2022

Cited by 2 | Viewed by 3467

Abstract

The experimental evidence on contests often reports overspending of contest participants compared to the theoretical Nash equilibrium outcome. We show that a standard level-k model may rationalize overspending in contests. This result complements the existing literature on overspending in contests, and it [...] Read more.

The experimental evidence on contests often reports overspending of contest participants compared to the theoretical Nash equilibrium outcome. We show that a standard level-k model may rationalize overspending in contests. This result complements the existing literature on overspending in contests, and it bridges an open gap between the contest and auction literature. In fact, the literature on auctions often runs parallel to that on contests.Overbidding in auctions has also been documented empirically, and it has been shown that, in private-value auctions, such overbidding can be rationalized by level-k reasoning. We bridge the existing gap between the auction and contest literature by showing that overbidding may also be true in a theoretical contest environment with level-k reasoning. Full article

(This article belongs to the Special Issue Advances in the Theory and Applications of Contests and Tournaments)

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6 pages, 270 KB

Open AccessArticle

Optimal Accuracy of Unbiased Tullock Contests with Two Heterogeneous Players

by Marco Sahm

Games 2022, 13(2), 24; https://doi.org/10.3390/g13020024 - 25 Mar 2022

Cited by 4 | Viewed by 3799

Abstract

I characterize the optimal accuracy level r of an unbiased Tullock contest between two players with heterogeneous prize valuations. The designer maximizes the winning probability of the strong player or the winner’s expected valuation by choosing a contest with an all-pay auction equilibrium [...] Read more.

I characterize the optimal accuracy level r of an unbiased Tullock contest between two players with heterogeneous prize valuations. The designer maximizes the winning probability of the strong player or the winner’s expected valuation by choosing a contest with an all-pay auction equilibrium (

r \geq 2

). By contrast, if she aims at maximizing the expected aggregate effort or the winner’s expected effort, she will choose a contest with a pure-strategy equilibrium, and the optimal accuracy level

r < 2

decreases in the players’ heterogeneity. Finally, a contest designer who faces a tradeoff between selection quality and minimum (maximum) effort will never choose a contest with a semi-mixed equilibrium. Full article

(This article belongs to the Special Issue Advances in the Theory and Applications of Contests and Tournaments)

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7 pages, 227 KB

Open AccessArticle

Payoff Shares in Two-Player Contests

by Samuel Häfner and Georg Nöldeke

Games 2016, 7(3), 25; https://doi.org/10.3390/g7030025 - 9 Sep 2016

Cited by 3 | Viewed by 7598

Abstract

In imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent [...] Read more.

In imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent dissipation. In this paper, we consider contests with two players and investigate the relationship between these equilibrium shares and the parameters of a class of asymmetric Tullock contest success functions. Our main finding is that any players’ shares that sum up to less than one can arise as the unique outcome of a pure-strategy Nash equilibrium for appropriate parameters. Full article

11 pages, 204 KB

Open AccessArticle

Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony

by João Ricardo Faria, Franklin G. Mixon, Jr., Steven B. Caudill and Samantha J. Wineke

Games 2014, 5(2), 116-126; https://doi.org/10.3390/g5020116 - 20 May 2014

Cited by 8 | Viewed by 7263

Abstract

Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort (i.e., rent-seeking effort). The two types of efforts complement each [...] Read more.

Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort (i.e., rent-seeking effort). The two types of efforts complement each other and positively influence the payoff of the contest. We assume that legal effort affects the prize value, increasing the winner’s prospective rents, and research effort impacts the probability of winning the contest. The results of the model break new ground in showing that research effort is a function of legal effort, wherein research effort increases with rent-seeking effort. The model also shows the existence of a strategic equivalence between rent seeking and patent races. Full article

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