Search results

This paper aims to manage better the conflicts in labor disputes by improving the understanding of mediation dynamics from a game-theoretical perspective.

Signaling game model is adapted to a hypothetical labor dispute based on the legislative regulations on the mandatory mediation system in Turkey.

The paper determines mediation equilibria in which both players get positive payoffs. Analysis of the mediation equilibria helps to improve the understanding about the litigation and mediation dynamics depending on the variables. The variables are clearly separated from each other due to their reverse effects on strategy choices of the parties. Mediation payoff and litigation cost are characterized by their incentive effects on mediation preferences, whereas mediation fee and litigation payoff are characterized by their disincentive effect. While increasing amounts of incentive variables strengthen the mediation tendency of the employee, increasing amounts of disincentive variables reveal the opposite effect. Furthermore, the analysis also indicates that if the litigation payoff is too small to recover litigation costs, accepting the mediation becomes the optimal strategy. This prediction is contrary to that of traditional game-theoretic litigation/settlement models, in which small-claim disputes typically cannot be settled.

The assumption that the mediation fee is not a part of the litigation cost eliminates the disincentive effect of mediation fee and makes it neutral on the strategy choice of employee.

This paper first analyzes the strategic role of mediation in labor disputes by using a signaling game. Despite its mediation focus, the paper also provides practical insights for litigation.

Crime games cannot be simply read with mixed strategies. These strategies are inconclusive of how the players act rationally. This is undeniably true for the crime of tax evasion, where dishonest taxpayers are rational agents, motivated by the comparison of payoffs, when considering the risk of non-compliance. The purpose of this paper is to illustrate that in the presence of a small “private disturbance” of the players’ payoff, the Nash equilibrium in mixed strategies provides us with the necessary information on equilibria in pure strategies that will be played.

In tax-evasion games, an equilibrium must necessarily be interpreted in pure strategies, and the only way to do this is to insert some private information into the game and reinterpret it in a Bayesian scheme. We show that taxpayers’ private,subjective considerations on the effective implementation of the penalty and the revenue agency’s private information on the cost of monitoring and conviction can lead to Bayesian equilibria in pure strategies. The present paper takes issue with this Bayesian equilibrium and the implications for comparative-statics results.

In this context, tougher sentencing deters crime, although, as the Italian experience teaches, the necessary condition required is the certainty of punishment and the ability of the government to enforce it. The equilibrium strategies with incomplete information reveal whether it is convenient for the two agents to maintain their “private disturbance” as private information or, on the contrary, it is convenient to expect it to be “common knowledge.”

A distinct set of studies has adopted a game theoretic approach and shows that the standard economic approach to crime deterrence inspired by Gary Beker’s seminal paper might be flawed. See, among others, Saha and Poole (2000), Tsebelis (1989) and Andreozzi (2010). This paper shows that a greater severity of the penalty and a higher certainty of punishment (a lower possibility of appealing against sanctions and no discounts on due penalties) necessarily lead to a unique Bayesian equilibrium without evasion.

As agent‐based systems are increasingly used to model real‐life applications such as the internet, electronic markets or disaster management scenarios, it is important to study the computational complexity of such usually combinatorial systems with respect to some desirable properties. The purpose of this paper is to consider two computational models: graphical games encoding the interactions between rational and selfish agents; and weighted directed acyclic graphs (DAG) for evaluating derivatives of numerical functions. The author studies the complexity of a certain number of search problems in both models.

The author's approach is essentially theoretical, studying the problem of verifying game‐theoretic properties for graphical games representing interactions between self‐motivated and rational agents, as well as the problem of searching for an optimal elimination ordering in a weighted DAG for evaluating derivatives of functions represented by computer programs.

A certain class of games has been identified for which Nash or Bayesian Nash equilibria can be verified in polynomial time; then, it has been shown that verifying a dominant strategy equilibrium is non‐deterministic polynomial (NP)‐complete even for normal form games. Finally, it has been shown that the optimal vertex elimination ordering for weighted DAGs is NP‐complete.

This paper presents a general framework for graphical games. The presented results are novel and illustrate how modeling real‐life scenarios involving intelligent agents can lead to computationally hard problems while showing interesting cases that are tractable.

The purpose of this paper is to suggest possible extensions of the baseline Rubinstein sequential bargaining structure – applied to the negotiation of stationary infinitely termed contracts – that incorporate a direct reference to the “ideal” utilities of the players. This is a feature of the Kalai‐Smorodinsky cooperative solution – even if not of the generalized Nash maximand; it is usually not encountered in non‐cooperative equilibria.

First, it is argued that different bargaining protocols than conventionally staged are able to incorporate temporary all‐or (and)‐nothing splits of the pie. Scenarios are advanced where such episodes are interpreted either as – out of bargaining – war or unilateral appropriation events, or free experience contracts. Second, some modifications to the Rubinstein infinite horizon paradigm are experimented with, allowing for mixed strategies under alternate offers, and matching or synchronous decisions in a simultaneous (yet, discrete) bargaining environment. Solutions are derived where the reference to the winner‐takes‐it‐all outcome arises as a parallel – out‐of‐the‐protocol – outside option to the status quo point. In some cases, the limiting maximand for instantaneous bargaining was derived.

Rubinstein's optimal periodic division in a closed contract remained robust to most of the settings.

Presents possible extensions of the baseline Rubinstein sequential bargaining structure.

Aims to analyse the labour market outcome when there are two unions in the industry, representing heterogeneous workers – imperfect substitutes in production.

Competition between union policies are viewed in terms of both employment and wage strategies. Results for substitutes and complements are inspected. Attention is given to the strategic behaviour of the unions, towards one another and/or the employer side. Cooperation is modelled using the Nash‐maximand approach.

Gathers some notes and enlargements to the standard collective bargaining problem in which unions maximise utility. Extends the framework to model union competition behaviour for jobs and/or employment that reproduces the standard market product analysis of imperfect competition. Focuses on heterogeneous labour.

The analysis concentrates on the case of union duopoly, but can easily be enlarged to the n‐union setting – which is left for further investigation.

A simple analytical example with Stone‐Geary union utility functions and a linear labour demand system is forwarded.

Price‐taking has long been mistakenly regarded as an inferior firm behavior in an imperfectly competitive market. This scenario is challenged when a “Naiver’s Paradox” is shown to exist in an oligopolic market where all firms produce the same product with the same technology (cost structure). It is shown that a firm behaving as a naive price‐taker with ignorance of its output impact on the market will perform no worse or even better than its rivals in terms of profits achieved, where the latter are assumed to take “Cournot”, “relative profit” or other more advanced strategies. More significantly, when the number of firms in the market is large, a price‐taker may achieve higher profit not only in a relative sense, but also in an absolute sense. Such paradoxical outcome is generic, for it results from neither ad hoc assumptions on market structure nor on information sets, but from the conventionally granted “convexity” assumption on cost functions. An analogous phenomenon is observed for oligopsony market.

The purpose of this paper is to compare the pricing decisions and earning potential of the software supplier and the smart device manufacturer in different software promotion strategies.

Based on game theory, the authors formulate two promotion models, that is, the supplier implements software promotion activities individually (SP model) or outsources the promotion activity to the manufacturer under profit-sharing contract (MP model) when taking different channel power structures into consideration. Besides, in order to test the robustness of the conclusions, the authors also extend the basic model to the following situations: (1) the customers have different price elasticity toward service fee and product price; (2) the revenue sharing contract is employed by the supply chain members; and (3) the manufacturer's product promotion practice is taken into consideration.

The optimal service fee (product price) of the supplier (manufacturer) under SP model is always lower (higher) than that under MP model. Surprisingly, if the supplier is the channel leader and the profit sharing ratio exceeds certain threshold, the manufacturer's profit decreases in profit sharing ratio, which remains robust in three extension models. Moreover, the supply chain's profit in supplier-led game is always lower than that in Nash game irrespective of the promotion strategy in profit sharing context. When revenue sharing contract is adopted, the result holds only when the revenue sharing ratio is relatively low.

The authors originally explore two promotion strategies of the software supplier when taking the channel power structures into considerations, which has not been explored in the literature to the best of the authors' knowledge.

To analyse the implications of signs of reform modification, stoppage or reversal, such as price controls, that have emerged in many developing economies, it is necessary to understand their efficiency consequences. This paper aims to study the effect of price interventions in imperfectly competitive product markets, to investigate whether reforms reversals are necessarily harmful.

The model assumes firm set prices and face sunk costs of entry.

The paper shows that a minimum price can induce a Pareto improvement, by preventing price wars and encouraging entry. The result is supported by empirical evidence from some developed economies, holds when sunk cost vanishes, and is robust to some extensions. A fixed price may be optimal in the environment investigated.

The results may be of interest to theorists and policy-makers interested in imperfectly competitive markets.

Using Brandenburger and Nalebuff's 1995 co‐opetition model as a reference, the purpose of this paper is to seek to develop a tool that, based on the tenets of classical game theory, would enable scholars and managers to identify which games may be played in response to the different conflict of interest situations faced by companies in their business environments.

The literature on game theory and business strategy are reviewed and a conceptual model, the strategic games matrix (SGM), is developed. Two novel games are described and modeled.

The co‐opetition model is not sufficient to realistically represent most of the conflict of interest situations faced by companies. It seeks to address this problem through development of the SGM, which expands upon Brandenburger and Nalebuff's model by providing a broader perspective, through incorporation of an additional dimension (power ratio between players) and three novel, respectively, (rival, individualistic, and associative).

This proposed model, based on the concepts of game theory, should be used to train decision‐ and policy‐makers to better understand, interpret and formulate conflict management strategies.

A practical and original tool to use game models in conflict of interest situations is generated. Basic classical games, such as Nash, Stackelberg, Pareto, and Minimax, are mapped on the SGM to suggest in which situations they could be useful. Two innovative games are described to fit four different types of conflict situations that so far have no corresponding game in the literature. A test application of the SGM to a classic Intel Corporation strategic management case, in the complex personal computer industry, shows that the proposed method is able to describe, to interpret, to analyze, and to prescribe optimal competitive and/or cooperative strategies for each conflict of interest situation.

The purpose of this paper is to integrate the empirical and game theoretical approaches to address the strategic interactions among countries in choosing their optimal levels of intellectual property rights (IPRs), and to identify how these countries can reach an efficient and equitable equilibrium.

Because countries' decisions on which IPR standards and protections to implement are interrelated, the authors apply game theory to characterize the scenarios before and after the 1994 Agreement on Trade‐related Intellectual Property Rights (TRIPS) involving developed and developing countries.

The model shows that the pre‐TRIPS equilibrium is comprised of high‐income (H‐I) developed countries which choose a strong IPR protection while the middle‐income (M‐I) and low‐income (L‐I) developing countries choose a weak IPR standard. For countries to move from such an equilibrium to the uniformly strong IPR regime under TRIPS, it is necessary for the H‐I countries to compensate L‐I and M‐I countries that do not have the sufficient conditions to attract knowledge/technology transfer. This compensation covers IPR protection implementation costs and increased royalties for patents.

The model proposed in this study is not complex. In reality, the payoff functions can have more variables and parameters, which, however, may also complicate the model and lower its generalizability.

The study explains that it is difficult for countries to reach an efficient and equitable equilibrium without the subsidies and side‐payments from the developed countries to the developing countries. It builds an important bridge between the game theoretical approach and the empirical studies of TRIPS, which can be further enriched and tested. It acknowledges that it is more likely for stronger IPR standards (as in TRIPS) to be implemented than an open source approach.