Table of Contents

Experimentation in Two-Sided Markets

Martin Peitz, University of Mannheim - Department of Economics
Sven Rady, University of Bonn
Piers Trepper, Ludwig-Maximilians-Universität München

The Dynamics of Dictator Behavior

Markus Sass, University of Magdeburg
Florian Timme, University of Magdeburg
Joachim Weimann, University of Magdeburg

On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-Way Flow Strict Nash Networks

Banchongsan Charoensook, Keimyung University

Multiple Causation, Apportionment and the Shapley Value

Samuel Ferey, University of Lorraine
Pierre Dehez, University of Louvain


GAME THEORY & BARGAINING THEORY eJOURNAL

"Experimentation in Two-Sided Markets" Free Download
CESifo Working Paper Series No. 5346

MARTIN PEITZ, University of Mannheim - Department of Economics
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SVEN RADY, University of Bonn
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PIERS TREPPER, Ludwig-Maximilians-Universität München
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We study optimal experimentation by a monopolistic platform in a two-sided market. The platform provider is uncertain about the strength of the externality each side is exerting on the other. Setting participation fees on both sides, it gradually learns about these externalities by observing actual participation levels. This provides an informational rationale for introductory pricing, with the platform provider charging a fee below the myopically optimal level on at least one side of the market. If the externality that the other side exerts is sufficiently well known and weaker than the externality it experiences, the platform provider extracts surplus from that side by charging it a fee above the myopically optimal level. This interplay between learning and surplus extraction is crucial to the market outcome and its dynamics.

"The Dynamics of Dictator Behavior" Free Download
CESifo Working Paper Series No. 5348

MARKUS SASS, University of Magdeburg
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FLORIAN TIMME, University of Magdeburg
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JOACHIM WEIMANN, University of Magdeburg
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Choosing between selfish and non-selfish behavior in real life is a repeated decision with varying time spans between repetitions. To learn more about the dynamics of altruistic behavior, we use repeated standard dictator experiments. The dynamics of prosocial behavior in these experiments depends on the strength of several effects that influence gift giving in experiments of this kind. In particular, we investigate how social distance influences behavior in repeated dictator experiments and what kinds of behavioral dynamics are covered by a social norm. Furthermore, we vary the number of repetitions of the dictator game and the length of the time span between the repetitions (from two hours up to two weeks). We identify the moral self-licensing effect as an important determinant of the behavioral dynamics in repeated dictator games and show that this is covered by a social norm.

"On the Interaction between Player Heterogeneity and Partner Heterogeneity in Two-Way Flow Strict Nash Networks" Free Download
FEEM Working Paper No. 44.2015

BANCHONGSAN CHAROENSOOK, Keimyung University
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This paper brings together analyses of two-way flow Strict Nash networks under exclusive player heterogeneity assumption and exclusive partner heterogeneity assumption. This is achieved through examining how the interactions between these two assumptions influence important properties of Strict Nash networks. Built upon the findings of Billand et al (2011) and Galleotti et al (2006), which assume exclusive partner heterogeneity and exclusive player heterogeneity respectively, I provide a proposition that generalizes the results of these two models by stating that: (i) Strict Nash network consists of multiple non-empty components as in Galleotti et al (2006), and (ii) each non-empty component is a branching or Bi network as in Billand et al (2011). This proposition requires that a certain restriction on link formation cost (called Uniform Partner Ranking), which encloses exclusive partner heterogeneity and exclusive player heterogeneity as a specific case, is satisfied. In addition, this paper shows that value heterogeneity plays a relatively less important role in changing the shapes of Strict Nash networks.

"Multiple Causation, Apportionment and the Shapley Value" Free Download

SAMUEL FEREY, University of Lorraine
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PIERRE DEHEZ, University of Louvain
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Multiple causation is one of the most intricate issues in contemporary tort law. Sharing a loss suffered by a victim among multiple tortfeasors is indeed difficult and Courts do not always follow clear and consistent principles. Here, we argue that the axiomatic approach provided by the theory of cooperative games can be used to clarify that issue. We have considered the question from a purely game theoretic point of view in Dehez and Ferey (2013). Here we propose to analyze it in a legal perspective. We consider in particular the difficult case of successive causation to which we associate a general class of games called "sequential liability games". We show that our model rationalizes the two-step procedure proposed by the Restatement Third of Torts, apportionment by causation and apportionment by responsibility. More precisely, we show that the weighted Shapley value associated to a sequential liability game is the legal counterpart of this two-step procedure.

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This eJournal distributes working and accepted paper abstracts of empirical and theoretical papers on game theory, defined as the study of the strategic interaction among rational agents in competitive and cooperative environments, and bargaining theory, defined as a situation in which two or more players have a common interest to co-operate, but have conflicting interests over exactly how to co-operate. The topics in this eJournal include all of the subjects in Section C7 of the JEL classification system.

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