Game Mining: How to Make Money from Those About to Play a Game

24 Pages Posted: 4 Apr 2013

See all articles by James Bono

James Bono

Microsoft Corporation

David Wolpert

Santa Fe Institute

Date Written: March 14, 2013

Abstract

It is well-known that a player in a noncooperative game can benefit by publicly restricting his possible moves before play begins. We show that, more generally, a player may benefit by publicly committing to pay an external party an amount that is contingent on the game’s outcome. We explore what happens when external parties – who we call “game miners” – discover this fact and seek to profit from it by entering an outcome- contingent contract with the players. We analyze various structured bargaining games among such miner(s) and players that determine such an outcome-contingent contract before the start of the original game. These bargaining games include playing the players against one another as in the original game, as well as allowing the players to pay the miner(s) for exclusivity and first-mover advantage. We establish restrictions on the strategic settings in which a game miner can profit and bounds on the game miner’s profit. We also find that game miners can lead to both efficient and inefficient equilibria.

Keywords: commitments, contracts, extortion

JEL Classification: C7, D7, F5

Suggested Citation

Bono, James and Wolpert, David, Game Mining: How to Make Money from Those About to Play a Game (March 14, 2013). Available at SSRN: https://ssrn.com/abstract=2243767 or http://dx.doi.org/10.2139/ssrn.2243767

James Bono (Contact Author)

Microsoft Corporation ( email )

One Microsoft Way
Redmond, WA 98052
United States

David Wolpert

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 897501
United States

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