Models of choice where agents see others as less sophisticated than themselves have significantly different, sometimes more accurate, predictions in games than does Nash equilibrium. When it comes to the maximal set of functions that are implementable in mechanism design, however, they turn out to have surprisingly similar implications. Focusing on single-valued rules, we discuss the role and i...

We introduce some game theoretic notions of fairness and robustness in determining power allocations for the multiple access channel. We describe a procedure, the wireless fair-share protocol (WFS) which satisfies a strong fairness requirement and in the case where devices have “elastic demands” leads to games with unique and non-manipulable Nash equilibria. When there are multiple channels, th...

We discuss the identification and estimation of normal form games. Following Bresnahan and Reiss (1990, 1991) utilities are a function of strategies, observed covariates, and random preference shocks. We also include an equilibrium selection rule as part of our model. Using recent algorithms to compute all of the Nash equilibrium to a game, we propose simulation-based estimators for parametric ...

This note analyzes a two-player all-pay auction with incomplete information. More precisely, one bidder is uncertain whether his rival has a head start, i.e., an initial advantage in the auction. The game has a unique Bayesian Nash equilibrium outcome whose shape depends on the expected head start. In equilibrium, the potentially stronger player generates an informational rent if and only if he...

This paper considers the dynamic evolution of algorithmic (recursive) learning rules in a normal form game. It is shown that the system | the population frequencies | is globally stable for any arbitrary N -player normal form game, if the evolutionary process is algorithmic and the `birth process' guarantees that an appropriate set of `smart' rules is present in the population. The result is in...

The possibilities for achieving desirable standards of economic performance in a decentralized, incentive compatible manner have recently received widespread research attention. Perhaps the most notable contribution in this area has been the remarkable paper by Groves and Ledyard [7]. They devised a mechanism for allocating resources in economies with public goods which gives agents broad oppor...

In a discretionary regime the monetary authority can print more money and create more inflation than people expect. But, although these inflation surprises can have some benefits, they cannot arise systematically in equilibrium when people understand the policymaker’s incentives and form their expeziations accordingly. Because the policymaker has the power to create inflation shocks ex pest, th...

In a symmetric game, every player is identical with respect to the game rules. We show that a symmetric 2strategy game must have a pure-strategy Nash equilibrium. We also discuss Nash’s original paper and its generalized notion of symmetry in games. As a special case of Nash’s theorem, any finite symmetric game has a symmetric Nash equilibrium. Furthermore, symmetric infinite games with compact...

For games with discontinuous payoffs Simon and Zame (Econometrica 58:861–872, 1990) introduced payoff indeterminacy, in the form of endogenous sharing rules, which are measurable selections of a certain payoff correspondence. Their main result concerns the existence of a mixed Nash equilibrium and an associated sharing rule. Its proof is based on a discrete approximation scheme “from within” th...

In this article, the energy market is a modeled as a Stackelberg game involving three categories of agents: microgrids made of end users sharing the same energy provider, suppliers and generators. The energy production is decentralized involving non-renewables, renewables and demand response performed at the microgrid level. We compute analytically the Nash equilibrium of the game in the genera...