Economics & Sociology

ISSN: 2071-789X eISSN: 2306-3459 DOI: 10.14254/2071-789X
Index PUBMS: f5512f57-a601-11e7-8f0e-080027f4daa0
Article information
Title: Coalitional Games, Excessive Competition and a Lack of Trust: an Experimental Aproach
Issue: Vol. 10, No 2, 2017
Published date: 06-2017 (print) / 06-2017 (online)
Journal: Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Authors: Dawid Ners
University of Gdańsk
Keywords: coalitional games, experimental economics, first price auction, club goods, excessive competition
DOI: 10.14254/2071-789X.2017/10-2/17
Index PUBMS: 5b149997-004f-11e8-94c4-fa163e5d4f72
Language: English
Pages: 227-238 (12)
JEL classification: C71, C92, D71, D81
Website: http://www.economics-sociology.eu/?507,en_coalitional-games-excessive-competition-and-a-lack-of-trust-an-experimental-approach
Licenses:
Abstract

The article tackles the issues of the effectiveness and rationality of making choices in the conditions of competition and cooperation. It confronts the economic theory of rational choice with the empirical results from an experiment. The aim of the article is to show that excessive competition and a lack of trust cause limitation of rational choice in coalitional games. In the experiment conducted for this study purposes, a public good was used to construct a situation in which making a huge coalition is the winning strategy. Despite this fact, the research proves that under competition supported by uncertainty, which results from the lack of trust, the decision making entities behave far less rationally than the game theory would suggest. People competing with each other often take decisions irrationally.

Bibliography

1. Arkoff, A., Vinacke, W. E. (1957). An experimental study of coalitions in the triad. American Sociological Review, 22(4), 406-414.

2. Aumann, R. J. (1995). Backward induction and common knowledge of rationality. Games and Economic Behavior, 8(1), 6-19.

3. Aumann, R. J., Hart, S. (1992). Handbook of game theory with economic applications. Elsevier.

4. Banzhaf, J. F. (1965). Weighted voting doesn't work: A mathematical analysis. Rutgers Law Review, 19, 317-343.

5. Berdowski, F., Koziński P., Węgliński Z. (2000). Głosowanie strategiczne. Warszawa: Wydział Nauk Ekonomicznych Uniwersytetu Warszawskiego.

6. Camerer, C. F. (2003). Behavioral game theory: experiments in strategic interaction. Princeton: University Press.

7. Conrads, J., Irlenbusch, B. (2013). Strategic ignorance in ultimatum bargaining. Journal of Economic Behavior & Organization, 92, 104-115.

8. Dannenberg, A., Lange, A., Sturm, B. (2010). On the formation of coalitions to provide public goods-experimental evidence from the lab. Cambridge: National Bureau of Economic Research.

9. Dixit, A., Skeath, S. (2004). Game of Strategy. New York: WW Norton & Company.

10. Fischbacher, U., Gächter, S., Fehr, E. (2001). Are people conditionally cooperative? Evidence from a public goods experiment. Economics Letters, 71(3), 397-404.

11. Geckil, I. K., Anderson, P. L. (2009). Applied game theory and strategic behaviour. Florida: CRC Press.

12. Giacomantonio, M., De Dreu, C. K., Shalvi, S., Sligte, D., Leder, S. (2010). Psychological distance boosts value- behavior correspondence in ultimatum bargaining and integrative negotiation. Journal of Experimental Social Psychology, 46(5), 824-829.

13. Girard, R. (1993). Sacrum i przemoc. Poznań: Brama.

14. Gomes, A., Jehiel, P. (2005). Dynamic processes of social and economic interactions: on the persistence of inefficiencies. Journal of Political Economy, 113(3), 626-667.

15. Güth, W., Kocher, M. G. (2014). More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature. Journal of Economic Behavior & Organization, 108, 396-409.

16. Hayek, F. A. (1967). Studies in Philosophy Politics and Economics. University of Chicago.

17. Hayek, F. A. (1973). Law, Legislation and Liberty. Rules and Order, 1, Chicago: University of Chicago Press.

18. Holt, C. A., Anderson, L. R. (1999). Agendas and strategic voting. Southern Economic Journal, 622-629.

19. Hyndman, K., Ray, D. (2007). Coalition formation with binding agreements. The Review of Economic Studies, 74(4), 1125-1147.

20. Konishi, H., Ray, D. (2003). Coalition formation as a dynamic process. Journal of Economic Theory, 110(1), pp. 1-41.

21. Lucas, W. F. (1992). von Neumann-Morgenstern stable sets. Handbook of game theory with economic applications, 1, 543-590.

22. Malawski, M., Jaideep R. (2005). Gry przetargu ultymatywnego. Decyzje, 3, 79-105.

23. Mariotti, M., Xue, L. (2003). Farsightedness in coalition formation. The endogenous formation of economic coalitions, FEEM series on economics and environment, 128-155.

24. McAdams, D. (2014). Game-Changer: game theory and the art of transforming strategic situations. New York: WW Norton & Company.

25. McCain, R. A. (2009). Game theory and public policy. Edward Elgar Publishing.

26. Munoz-Garcia, F., Toro-Gonzalez, D. (2016). Applications to Industrial Organization. Strategy and Game Theory, 145-181.

27. Tversky, A., Kahneman, D. (2000). Choices, values and frames. Cambridge: University Press.

28. Kahneman, D., Knetsch, J. L. (1992). Valuing public goods: the purchase of moral satisfaction. Journal of environmental economics and management, 22(1), 57-70.

29. Kotarbiński, T. (1982). Traktat o dobrej robocie (Praxiology. An introduction to the science of efficient action). Wrocław: Zakład Narodowy im. Ossolińskich Wydawnictwo PWN.

30. Gura, E. Y. (2008). Insights into game theory: an alternative mathematical experience. Mathematical Monthly, 69, 9-15.

31. Nash, J. (1951). Non-cooperative games. Annals of Mathematics, 54(2), 286-295.

32. Neumann, J. V. (1928). Zur Theorie der Gesellschaftsspiele. Mathematische Annalen, 100(1), 295-320.

33. Neumann, J. von, Morgenstern, O. (1944). Theory of Games and Economic Behaviour. Princeton: University Press.

34. Ray, D., Vohra, R. (2014). Coalition formation. Handbook of Game Theory, 4, 239-326.

35. Ray, D., Vohra, R. (2015). The farsighted stable set. Econometrica, 83(3), 977-1011.

36. Shapley, L. S. (1952). A value for n-person games, Santa Monica: Rand Corp CA.

37. Shapley, L. S., Shubik M. (1954). A method for evaluating the distribution of power in a committee system. American political science review, 48(3), 787-792.

38. Smith, V. L. (2007). Rationality in economics: constructivist and ecological forms. Cambridge: University Press.

39. Straffin, P. D. (2006). Teoria gier. Warszawa: Wydawnictwo Naukowe Scholar.

40. Zhang, Y., Guizani, M. (Eds.) (2011). Game theory for wireless communications and networking. Florida: CRC Press.