Coordination Games

The theory of cheap talk, evaluated as a model of language use, is shown to mismatch the reality of communication in five respects: real talk is conflict dampening, is more than assertion, is dear, is not literal, and is beholden to its medium. The linguistic theory of pragmatics is employed to demonstrate formally that every utterance creates a coordination game whose resolution reveals evidence of similarity and of a shared mental model, so there is no neutral style of communication: an utterance must affect the relationship between the players. This alteration, in turn, will affect any game allowing for communication.

Disagreement over the form of regulation of greenhouse gasses motivates a comparison of market based and command and control policies. More efficient policies can increase aggregate marginal abatement cost, resulting in higher emissions. Multiple investment equilibria and "regulatory uncertainty" arise when firms anticipate command and control policies. Market based policies eliminate this uncertainty. Command and control policies cause firms to imitate other firms' investment decisions, leading to similar costs and small potential efficiency gains from trade. Market based policies induce firms to make different investment decisions, leading to different costs and large gains from trade. We imbed the regulatory problem in a "global game" and show that the unique equilibrium to that game is constrained socially optimal.

We focus on privacy in public. The notion dates back over a century, at least to the work of the German sociologist, Georg Simmel. Simmel observed that people voluntarily limit their knowledge of each other as they interact in a wide variety of social and commercial roles, thereby making certain information private relative to the interaction even if it is otherwise publicly available. Current governmental surveillance in the US (and elsewhere) reduces privacy in public. But to what extent? The question matters because adequate self-realization requires adequate privacy in public. That in turn depends on informational norms, social norms that govern the collection, use, and distribution of information. Adherence to such norms is constitutive of a variety of relationships in which parties coordinate their use of information. Examples include student/teacher and journalist/confidential source. Current surveillance undermines privacy in public by undermining norm-enabled coordination. The 1950 to 1990 East German

A people's culture, norms and habits are important determinants not just of the quality of social life but of economic progress and growth. In this paper we take the view that while the importance of culture is undeniable, the innateness of culture is not. We work here with a single example and demonstrate how a human trait which is widely beheved to be cultural is at the same time a matter of choice. The example that we shall work with concerns punctuahty. We show that punctuahty may be simply an equilibrium response of individuals to what they expect others to do. The same society can get caught in a punctual equilibrium or a non-punctual equilibrium.

Coordination between agents can be modelled using correlated equilibrium and a 'device' allocating roles to players. That coordination takes place within a social context suggests properties that one may expect of a correlated equilibrium. In this paper, given a partition of the player set into (social) groups, we demonstrate the existence of an approximate correlated equilibrium satisfying a within group anonymity property and a group independence property. Within group anonymity assures 'fairness' and equality within groups while group independence rules out correlation of actions between groups. * This paper is a major revision of Cartwright and Wooders (2003a). The main results of that paper were presented at the the 2002 General Equilibrium Conference held in Athens in May 2002 and at Northwestern University in August 2002. We thank the participants for their interest and comments.

The paper analyzes the interactions between monetary and fiscal policies. Its emphasis is on a monetary union; one in which (some of) the governments are excessively ambitious. In contrast to conventional games, our novel game theoretic framework allows for stochastic timing of policy actions. The fact that moves occur with some ex-ante probability distribution (rather than certainty every period) enables us to model various degrees of fiscal rigidity and indiscipline that are heterogeneous across the member countries. We examine a number of specifications in discrete and continuous time, such as the widely-used Calvo (1983) timing, as well as a fully general probability distribution of the timing of policy actions. We derive the necessary and sufficient degree of monetary commitment that eliminates socially inferior (subgame perfect Nash) equilibria. This degree is shown to be increasing in (i) the degree of fiscal rigidity of each member country, (ii) their relative economic size, (iii) the structure of the economy (that determines eg inflation and output variability costs), and (iv) the degree of the central banker's impatience. Interestingly, such a strong monetary commitment-interpretable as a sufficiently explicit numerical inflation target-does not only ensure high credibility of the central bank, but it also indirectly 'disciplines' the fiscal policymaker(s). As such, it leads to an improvement in monetary-fiscal policy cooperation and outcomes of both policies. We conclude by calibrating the model with European Monetary Union data. This exercise aims at providing some quantitative predictions regarding the required explicitness of the European Central Bank's commitment to an inflation target.

This paper reports on experiments testing the viability of markets for cheap talk information. We find that these markets are fragile. The reasons are surprising given the previous experimental results on cheap-talk games. Our subjects provide low-quality information even when doing so does not increase their monetary payoff. We show that this is not because subjects play a different (babbling) equilibrium. By analyzing subjects' behavior in another game, we find that those adopting deceptive strategies tend to have envious or non-pro-social traits. The poor quality of the information transmitted leads to a collapse of information markets.

The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision-making so far. In reality, however, teams often have to coordinate with other teams. We present an experiment with 825 participants, using six different coordination games, where either individuals or teams interact with each other. We find that teams coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model.

This paper looks at sequences of two-player gaaea where each player 'naively' assumes that his opponent follovs a certain míxed atrategy whích can be learned by observing his behaviour. In each stage of the game players update their beliefs and choose an optimal response to the expected behaviour of the opponent. Provided that thís learning process converges, the equílíbríum beliefs form a Nash equilibrium. Hence, St is possible to derlve a probability dístrlbutíon on the set of Nash equ111bría condltional on the players' pzior belíefs. For prlor distributions of the betadístrlbutíon type, ít can be shown that the learning process converges. Some examples Sllustate how this fact can be used i n games wíth multlple equilibría to obtain a probabílity distribution on the equilibrium aet.

In this paper we present a model that describes how historical political constraints by themselves, or in combination with a sufficient degree of impatience, may be the cause of bankruptcy in some industries when a closed economy is opened to foreign competition. ...

In this paper we argue that ambiguity, combined with social opinion formation can be represented as part of a game-theoretic equilibrium concept that transcends the standard Nash equilibrium concept, applied to a model of the tragedy of the commons. Our modeling can shed some light on the international environment crisis and the relevant ongoing international negotiations. We conclude that social opinion formation in most cases has a significant impact on equilibrium common property resource usage. * We thank Cees Withagen for an enlightening discussion with one of the authors about this work and participants in the 2008 International Meetings of the Social Choice and Welfare Society in Montreal for their useful questions. We are very grateful for the remarks and suggestions by three referees that allowed us to improve this paper.

We present a quantum solution to coordination problems that can be implemented with existing technologies. It provides an alternative to existing approaches, which rely on explicit communication, prior commitment or trusted third parties. This quantum mechanism applies to a variety of scenarios for which existing approaches are not feasible.

Abetract '1'his paper investigates which outcomes result in a game when the order of the moves is endogenous. To that end we study a model in which players can move in one of two periods, i.e. players face the trade-off between committing early and forcing the opponent to best respond, and moving late so as to be able to play a best response against the opponent. It is shown that most mixed strategy equilibria of the original game are not viable when the sequencing of the moves is endogenous, hut that any pure strategy equilibrium is a perfect equilibrium outcome of the timing game. Mote refined equilibrium concepts with an evolutionary flavor, however, allow the conclusion that only equilibria in which no player has an incentive to move first are viable. 'This paper is a substantial revision of our paper "Endogenous Timing and Strategic Commitment" that was circulated in October 1992. tCentER for F;conomic Research, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands. The research of Sjaak Hurkens was sponsored by the Foundation for the Promotion of Research in Econornic Sciences, which is part of the Netherlands Organization for Scientific Research (NWO). W'e thank Werner Giith (or his use(ul commenta. By summing up (4.3) over all ai it follows that, for k~1, sk(ak)-po(ak) ? ak(ak). Combining this with (5.3) and (4.3) it follows that v; (a;)-s,'(a,') and a;~B(a~) if o~(a~)~0. This implies that any outcome (a"a~) with a~~B(a;) can occur only in the first period, hence, s'(a;,ai)-vr(a;,ai) for all a~~B(a;), and hence, s~(a~)-vr(a~) for a~~B(a;). This implies that if player j acts in period two, then he plays the unique á~E B(a;) for sure. But this implies (by Lemma 2(i)) that á~E B(a;) for all a; E C(s~). This contradicts Lemma 2(iv). Step B4. Conclusion of the proof for case B. Consider the pair a'-(a~, a2). Without loss of generality, step B3 allows us to assume that ai E B(a2). By Lemma 2 we have if ar E C(s~), ar~a~, then ar~B(aZ). By step B3, therefore a~E B(ar) for all such ar. But then we have that a2 E B(a~) and a2~C(QZ). By Lemma 2 this is impossible since a2 is an equilibrium of g and g satisfies the regularity condition (3.7).6 Robustness of Pure Strategy Equilibria In this section we show that for pure strategy equilibria of g the situation is fundamentally different from that for mixed equilibria: Each pure equilibrium is a subgame perfect Title Some Peculiarities of Group Decision Making in Teams Euler Equations in Micro Data: Merging Data from Two Samples

In this paper we consider a duopoly two-stage duopoly where firms first decide whether to invest in advertising and then compete in prices. Advertising has two effects: a market enlargement for both firms and a predatory gain for the investing firm only. Both symmetric and asymmetric equilibria may arise. The two most interesting cases are a coordination game where both firms investing and non-investing are equilibria, and a chicken game where only one firm invests while the other is possibly driven (endogenously) out of the market. Our results suggest that product differentiation has an ambiguous impact on investment in advertising and that strong product substitutability may induce a coordination problem.

In this paper we consider a duopoly two-stage duopoly where firms first decide whether to invest in advertising and then compete in prices. Advertising has two effects: a market enlargement for both firms and a predatory gain for the investing firm only. Both symmetric and asymmetric equilibria may arise. The two most interesting cases are a coordination game where both firms investing and non-investing are equilibria, and a chicken game where only one firm invests while the other is possibly driven (endogenously) out of the market. Our results suggest that product differentiation has an ambiguous impact on investment in advertising and that strong product substitutability may induce a coordination problem.

We examine three tools that can enhance coordination success in a repeated multiple choice coordination game. Gradualism means that the game starts as an easy coordination problem and moves gradually to a more difficult one. Endogeneity implies that a gradual increase in the upper limit of coordination occurs only if coordination with the Pareto superior equilibrium in a stage game is attained. Modification requires that when they fail coordination, the level of the next coordination game is adjusted to an easier one. We find from laboratory experiment that a mechanism that combines these three, termed herein the GEM, works well.

Folk Theorems in repeated games hold¯xed the game payo®s, while the discount factor is varied freely. We show that these results may be sensitive to the order of limits in situations where players move asynchronously. Speci¯cally, we show that when moves are asynchronous, then for a¯xed discount factor close to one there is an open neighborhood of games which contains a pure coordination game such that every Perfect equilibrium of every game in the neighborhood approximates to an arbitrary degree the unique Pareto dominant payo® of the pure coordination game.

We compare the experimental results of three stag-hunt games. In contrast to Battalio et al. (2001), our design keeps the riskiness ratio of the payoff-dominant and the risk-dominant strategies at a constant level as the optimisation premium is increased. We define the riskiness ratio as the relative payoff range of the two strategies. We find that decreasing the riskiness We would like to thank Charles Figuières for helpful comments.

We investigate how people coordinate within their own cultures, compared to interactions with people from different cultures. As players are likely to experience more ambiguity when playing a different culture, we expect players to choose safer strategies. We run experiments with a stag hunt and bargaining coordination game. Using a between-subjects design, we vary the identity of the opponent between someone of the same culture or a different culture. We compare the responses of British and East Asian students at the University of Exeter and show the cultural identity of the opponent by physical appearance. The players appear to use cultural stereotypes to predict behaviour, especially in the bargaining game which may require more strategic thought than the stag hunt game. In particular, the British act as though East Asians would behave more cautiously than other British. According to our results, the stereotype of East Asians being cautious is misleading.

The paper finds that sufficient ambiguity leads to the uniqueness of equilibrium in macroeconomic coordination games. The results have a Keynesian flavour: sufficient optimism gives rise to a Pareto-optimal equilibrium; and sufficient pessimism results in a Pareto-inferior equilibrium. This analysis is applied to a "Big Push" model from the economic growth literature. We are particularly grateful to Jim. L.

Coordination problems arise when a game has multiple Nash equilibria and all players have a common interest in avoiding a non-equilibrium state. To achieve an equilibrium state, agents must come to understand one another's intentions. Communication can facilitate this understanding under some, but not all, circumstances. In the absence of communication among agents, coordination may also sometimes be achieved with the aid of extrinsic signals that have come to be associated with the actions of others. In some settings, past actions themselves serve as precedents, without the benefit of any communication. Coordination and Communication Lewis (1969) defined a coordination equilibrium as a Nash equilibrium in which no agent would be better off if any other agent had chosen a different action.. When there are multiple coordination equilibria, agents face an obvious coordination problem. The resolution of coordination problems rests upon individuals coming to understand the intentions of one another. The most explicit way of developing this understanding is for the individuals to communicate with one another. Common knowledge of a language must precede communication. Even with common knowledge of a language, individuals may not be bound to do what they say they will do. In such circumstances, talk is >cheap=.

We present a quantum solution to coordination problems that can be implemented with existing technologies. It provides an alternative to existing approaches, which rely on explicit communication, prior commitment or trusted third parties. This quantum mechanism applies to a variety of scenarios for which existing approaches are not feasible.

We design a self-exploratory reinforcement learning (RL) framework, based on the Q-learning algorithm, that enables the base station (BS) to choose a suitable modulation and coding scheme (MCS) that maximizes the spectral efficiency while maintaining a low block error rate (BLER). In this framework, the BS chooses the MCS based on the channel quality indicator (CQI) reported by the user equipment (UE). A transmission is made with the chosen MCS and the results of this transmission are converted by the BS into rewards that the BS uses to learn the suitable mapping from CQI to MCS. Comparing with a conventional fixed look-up table and the outer loop link adaptation, the proposed framework achieves superior performance in terms of spectral efficiency and BLER.

We design a self-exploratory reinforcement learning (RL) framework, based on the Q-learning algorithm, that enables the base station (BS) to choose a suitable modulation and coding scheme (MCS) that maximizes the spectral efficiency while maintaining a low block error rate (BLER). In this framework, the BS chooses the MCS based on the channel quality indicator (CQI) reported by the user equipment (UE). A transmission is made with the chosen MCS and the results of this transmission are converted by the BS into rewards that the BS uses to learn the suitable mapping from CQI to MCS. Comparing with a conventional fixed look-up table and the outer loop link adaptation, the proposed framework achieves superior performance in terms of spectral efficiency and BLER.

We design a laboratory experiment to test the importance of wealth as a channel for financial contagion across markets with unrelated fundamentals. Specifically, in a sequential global game, we analyze the decisions of a group of investors that hold assets in two markets. We consider two treatments that vary the level of diversification of these assets across markets, which allows us to disentangle the wealth effect from other sources of financial contagion. We provide evidence of contagion due to a wealth effect when investors have completely diversified portfolios. In this treatment, for certain ranges of fundamentals, we show that a coordination failure in the first market reduces investors' wealth, which makes them more likely to withdraw their investments in the second market, thereby increasing the probability of a crisis.

In familiar models, a decrease in the friction facing mobile factors (e.g., lowering their adjustment costs) increases a coordination problem, leading to more circumstances where there are multiple equilibria. We show that a decrease in friction can decrease coordination problems when a production externality arises from a changing stock, e.g. of pollution or knowledge. In general, the relation between the amount of friction that mobile factors face and the likelihood of multiple equilibria is non-monotonic.

In familiar models, a decrease in the friction facing mobile factors (e.g., lowering their adjustment costs) increases a coordination problem, leading to more circumstances where there are multiple equilibria. We show that a decrease in friction can decrease coordination problems if, for example, a production externality arises from a changing stock of knowledge or a changing environmental stock. In general, the relation between the amount of friction that mobile factors face and the likelihood of multiple equilibria is non-monotonic.

In familiar models, a decrease in the friction facing mobile factors (e.g., lowering their adjustment costs) increases a coordination problem, leading to more circumstances where there are multiple equilibria. We show that a decrease in friction candecrease coordination problems if, for example, a production externality arises from a changing stock of knowl- edge. In general, the relation between the amount of friction that mobile factors face and the likelihood of multiple equilibria is non-monotonic.

Disagreement over the form of regulation of greenhouse gasses motivates a comparison of market based and command and control policies. More efficient policies can increase aggregate marginal abatement cost, resulting in higher emissions. Multiple investment equilibria and "regulatory uncertainty" arise when firms anticipate command and control policies. Market based policies eliminate this uncertainty. Command and control policies cause firms to imitate other firms' investment decisions, leading to similar costs and small potential efficiency gains from trade. Market based policies induce firms to make different investment decisions, leading to different costs and large gains from trade. We imbed the regulatory problem in a "global game" and show that the unique equilibrium to that game is constrained socially optimal.

This paper surveys some of the mechanisms that have been proposed by the experimental literature to elicit social networks. These mechanisms differ in their incentive structures, as well as the means of reward they employ. We compare these elicitation devices on the basis of the estimated differences in the characteristics of the induced networks, such as the number of (mutual) links, correspondence and accuracy. Our main conclusion is that the elicited network architecture is itself dependent on the structure (and the nature) of the incentives. This, in turn, provides the social scientist with guidelines on the most appropriate device to use, depending on her research objectives.

All 2 x 2 games are classified into eight configurations, following three natural criteria, and prototypes given for each, especially as concerns the Newcomb and chain-store paradoxes. Two pseudo-dynamic properties, move priority and dynamic inconsistency, arc examined in that framework, as well as more specifically, the problem of the origin of social institutions.

All 2 x 2 games are classified into eight configurations, following three natural criteria, and prototypes given for each, especially as concerns the Newcomb and chain-store paradoxes. Two pseudo-dynamic properties, move priority and dynamic inconsistency, arc examined in that framework, as well as more specifically, the problem of the origin of social institutions.

This Working Paper is published under the auspices of the Department of Applied Mathematics of the Ca' Foscari University of Venice. Opinions expressed herein are those of the authors and not those of the Department. The Working Paper series is designed to divulge preliminary or incomplete work, circulated to favour discussion and comments. Citation of this paper should consider its provisional nature.

Goeree & Holt (2001) observe that, for some parameter values, Nash equilibrium provides good predictions for actual behaviour in experiments. For other payoff parameters, however, actual behaviour deviates consistently from that predicted by Nash equilibria. They attribute the robust deviations from Nash equilibrium to actual players' considering not only marginal gains and losses but also total pay-offs. In this paper, we show that optimistic and pessimistic attitudes towards strategic ambiguity may induce such behaviour.

Our thesis proposes to change the ontology and methodology of game theory, appraising games as the understanding of the players’ strategic reasoning process. Our contribution is based on an interdisciplinary approach for a reassessment of the kind of intersubjectivity involved in strategic reasoning. We claim that the analysis of games should involve the study and the determination of the reasoning process that lead the players to a specific outcome, i.e. to a specific solution. A game should not be understood, like in standard game theory, as a mathematical representation of an individual choice at the equilibrium. This requires investigating the players’ capacity of coordination. We assert that understanding the process of coordination allows understanding strategic reasoning and ultimately to provide new answers to the indeterminacy problem of game theory which is one of the stalemates that game theory faces and which underscores its positive and normative difficulties. The thesi...

Goeree and Holt (2001) experimentally study a number of games. In each case they initially …nd strong support for Nash equilibrium, however by changing an apparently irrelevant parameter they …nd results which contradict Nash equilibrium. In this paper, we study the …ve normal form games from Goeree and Holt (2001). We argue that their results may be explained by the hypothesis that subjects view their opponents' behaviour as ambiguous. Ambiguity-aversion causes players to avoid strategies which give low out of equilibrium pay-o¤s. Similarly ambiguity-preference can make strategies with high pay-o¤s more attractive.

We report the results of an experiment on a continuous version of the minimum effort coordination game. The introduction of within-team competition significantly increases effort levels relative to a baseline with no competition and increases coordination relative to a secure treatment where the pay-off-dominant equilibrium strategy weakly dominates all other actions. Nonetheless, within-team competition does not prevent subjects from polarizing both in the efficient and the inefficient equilibria.

We study stochastic games with an in…nite horizon and sequential moves played by an arbitrary number of players. We assume that social memory is …nite-every player, except possibly one, is …nitely lived and cannot observe events that are su¢ ciently far back in the past. This class of games includes games between a long-run player and a sequence of short-run players, games with overlapping generations of players. An equilibrium is puri…able if some close-by behavior is consistent with equilibrium when agents' payo¤s in each period are perturbed additively and independently. We show that only Markov equilibria are puri…able when social memory is …nite. Thus if a game has at most one long-run player, all puri…able equilibria are Markov.

We examine the effectiveness of asset markets when the final outcome upon which the asset payout is based maybe affected by the unobservable actions of the traders. Players participate in a minimum effort coordination game preceeded by an information market where the asset payoffs are determined by the observed minimum effort level in the subsequent game. We examine both the informativeness of the markets and the effect of the market upon the ultimate outcome in the coordination game. This research provides insights into both equilibrium selection and the application of prediction markets within organizations as a decision support tool.

We study the design of public information structures that maximize the probability of selecting a Pareto dominant equilibrium in symmetric (2 × 2) coordination games. Because the need to coordinate exposes players to strategic risk, we treat the designer as able to implement an equilibrium only if the players believe it is also risk dominant. The designer's task is therefore to pool the set of states in which the desired equilibrium is risk dominant with the largest possible set in which it is not, while keeping the desired equilibrium risk dominant in expectation. We provide a simple characterization of the optimal signal structure which holds under general conditions. We extend the analysis to related problems, and show that our intuition is robust, suggesting that our approach provides a promising way

We investigate how people coordinate within their own cultures, compared to interactions with people from different cultures. As players are likely to experience more ambiguity when playing a different culture, we expect players to choose safer strategies. We run experiments with a stag hunt and bargaining coordination game. Using a between-subjects design, we vary the identity of the opponent between someone of the same culture or a different culture. We compare the responses of British and East Asian students at the University of Exeter and show the cultural identity of the opponent by physical appearance. The players appear to use cultural stereotypes to predict behaviour, especially in the bargaining game which may require more strategic thought than the stag hunt game. In particular, the British act as though East Asians would behave more cautiously than other British. According to our results, the stereotype of East Asians being cautious is misleading.

Goeree & Holt (2001) observe that, for some parameter values, Nash equilibrium provides good predictions for actual behaviour in experiments. For other payoff parameters, however, actual behaviour deviates consistently from that predicted by Nash equilibria. They attribute the robust deviations from Nash equilibrium to actual players' considering not only marginal gains and losses but also total pay-offs. In this paper, we show that optimistic and pessimistic attitudes towards strategic ambiguity may induce such behaviour.

We study experimentally a two-stage compensation mechanism for promoting cooperation in prisoner's dilemma games. In stage 1, players simultaneously choose binding non-negative amounts to pay their counterparts for cooperating in a given prisoner's dilemma game, and then play the prisoner's dilemma game in stage 2 with knowledge of these amounts. For the asymmetric prisoner's dilemma games we consider, all payment pairs consistent with mutual cooperation in subgame-perfect equilibrium transform these prisoner's dilemma games into coordination games, with both mutual cooperation and mutual defection as Nash equilibria in the stage-2 game. We find considerable empirical support for the mechanism, as cooperation is much more common when these endogenous transfer payments are feasible. We identify patterns among transfer pairs that affect the likelihood of cooperation. Mutual cooperation is most likely when the payments are identical; it is also substantially more likely with payment pairs that bring the payoffs from mutual cooperation closer together than with payment pairs that cause them to diverge. There is substantial scope for this compensation mechanism to achieve beneficial social outcomes in commerce and in international affairs, and reason to be concerned about the ability of firms to design collusive agreements.

One argument in favor of market based pollution control policies is sometimes exaggerated, and a different argument is usually ignored. Regardless of whether investment is fixed or endogenous, market based policies might lead to a higher or lower equilibrium abatement compared to the level under command and control policies. Therefore, economists should be cautious about trying to convince anti-market environmentalists of the benefit of market based policies on the grounds that these promote environmental goals. However, market based policies reduce regulatory uncertainty. Under command and control emissions policies, there are multiple rational expectations competitive equilibria at the investment stage. From the standpoint of individual firms, this multiplicity looks like regulatory uncertainty. Market based policies eliminate this uncertainty. These results hold in an environment with common knowledge about market fundamentals. In a global games setting the unique investment equilibrium under command and control emissions policies is constrained efficient.

Contingent Uncertainty, Strategic Uncertainty, and Coordination Thomas Wisdom Department of Behavioral Science, Hokkaido University Keigo Inukai Department of Economics, Hokkaido University Kengo Kurosaka Department of Economics, Hokkaido University Wataru Toyokawa Department of Behavioral Science, Hokkaido University Yoichi Hizen Department of Economics, Hokkaido University Tatsuya Kameda Department of Behavioral Science, Hokkaido University Abstract: Uncertainty about the coordination of common efforts (e.g. team projects, alliances) often coexists with uncertainty about other variables (e.g. weather, market fluctuations, political instability). In certain coordination games in which equilibria can potentially arise at any common effort level, ex ante equilibrium selection (particularly of high-effort, high-payoff equilibria) has been a persistent game theoretical challenge. This is largely due to the strategic uncertainty of each participant about the behavior of others, in the a...

We consider a distributed SON (D-SON) architecture where the interaction of different self-organizing network (SON) functions negatively affect the performances of the system. This is referred to in 3rd Generation Partnership Project (3GPP) as a SON conflict, which needs to be handled by means of a self-coordination framework. We focus on a functional architecture and a theoretical framework based on the theory of Markov decision process (MDP) for the self-coordination of different actions taken by different SON functions. In order to cope with the complexity of the overall SON problem, we subdivide the global MDP modeling the long-term evolution (LTE)-enhanced node base station (eNB) onto simpler subMDPs modeling the different SON functions. Each sub-problem is defined as a subMDP and solved independently by means of reinforcement learning (RL), and their individual policies are combined to obtain a global policy. This combined policy can execute several actions per state but can introduce policy conflicts. We focus on the specific SON conflict generated by the concurrent execution of coverage and capacity optimization (CCO) and inter-cell interference coordination (ICIC) SON functions, which may require to update the same parameter, i.e., the transmission power level. The coordination among the different actions selected by the conflicting use cases is achieved by means of a coordination game where the players are the subMDPs and the actions and rewards are those provided by means of a RL approach. Performance evaluation is carried out in a ns3 release 8 compliant LTE system simulator, and it shows that our self-coordination approach provides satisfying solutions in terms of system performances for both the conflicting SON functions.

Disagreement over the form of regulation of greenhouse gasses motivates a comparison of market based and command and control policies. More efficient policies can increase aggregate marginal abatement cost, resulting in higher emissions. Multiple investment equilibria and "regulatory uncertainty" arise when firms anticipate command and control policies. Market based policies eliminate this uncertainty. Command and control policies cause firms to imitate other firms' investment decisions, leading to similar costs and small potential efficiency gains from trade. Market based policies induce firms to make different investment decisions, leading to different costs and large gains from trade. We imbed the regulatory problem in a "global game" and show that the unique equilibrium to that game is constrained socially optimal.

We introduce the concept of e-consistent equilibrium where each player plays a e-best response after every history reached with positive probability. In particular, an e-consistent equilibrium induces an e-equilibrium in any subgame reached along the play path. The existence of e-consistent equilibrium is examined in various repeated games. The main result is the existence in stochastic games with absorbing states.