{"title":"Core stability and strategy-proofness in hedonic coalition formation problems with friend-oriented preferences","authors":"Bettina Klaus , Flip Klijn , Seçkin Özbilen","doi":"10.1016/j.geb.2025.08.007","DOIUrl":"10.1016/j.geb.2025.08.007","url":null,"abstract":"<div><div>We study hedonic coalition formation problems with friend-oriented preferences; that is, each agent has preferences over his coalitions based on a partition of the set of agents, except himself, into “friends” and “enemies” such that (E) adding an enemy makes him strictly worse off and (F) adding a friend together with a set of enemies makes him strictly better off. Friend-oriented preferences induce a so-called friendship graph where vertices are agents and directed edges point to friends.</div><div>We show that the partition associated with the strongly connected components (SCC) of the friendship graph is in the strict core. We then prove that the SCC mechanism, which assigns the SCC partition to each hedonic coalition formation problem with friend-oriented preferences, satisfies a strong group incentive compatibility property: <em>group strategy-proofness</em>. Our main result is that on any “rich” subdomain of friend-oriented preferences, the SCC mechanism is the only mechanism that satisfies <em>core stability</em> and <em>strategy-proofness</em>.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"154 ","pages":"Pages 16-52"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145011138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Haris Aziz, Patrick Lederer, Xinhang Lu, Mashbat Suzuki, Jeremy Vollen
{"title":"Approximately fair and population consistent budget division via simple payment schemes","authors":"Haris Aziz, Patrick Lederer, Xinhang Lu, Mashbat Suzuki, Jeremy Vollen","doi":"10.1016/j.geb.2025.09.001","DOIUrl":"10.1016/j.geb.2025.09.001","url":null,"abstract":"<div><div>In approval-based budget division, a budget needs to be distributed to some candidates based on the voters' approval ballots over these candidates. In the pursuit of a simple, consistent, and approximately fair rule for this setting, we introduce the maximum payment rule (<span><math><mi>MP</mi></math></span>). Under this rule, each voter controls a part of the budget and, in each step, the corresponding voters allocate their entire budget to the candidate approved by the largest number of voters with non-zero budget. We show that <span><math><mi>MP</mi></math></span> meets our criteria as it satisfies monotonicity and a demanding population consistency condition and gives a 2-approximation to a fairness notion called average fair share (AFS). Moreover, we generalize <span><math><mi>MP</mi></math></span> to the class of sequential payment rules and prove that it is the most desirable rule within this class: nearly all other sequential payment rules fail monotonicity while offering only small improvements in the approximation ratio to AFS.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"154 ","pages":"Pages 208-225"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145159409","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Reasoning about your own future mistakes","authors":"Martin Meier , Andrés Perea","doi":"10.1016/j.geb.2025.09.010","DOIUrl":"10.1016/j.geb.2025.09.010","url":null,"abstract":"<div><div>We propose a model of reasoning in dynamic games in which a player, at each information set, holds a conditional belief about his own future choices and the opponents' future choices. These conditional beliefs are assumed to be <em>cautious</em>, that is, the player never completely rules out any feasible future choice by himself or the opponents. We impose the following key conditions: (a) a player always believes that he will choose rationally in the future, (b) a player always believes that his opponents will choose rationally in the future, and (c) a player deems his own mistakes infinitely less likely than the opponents' mistakes. These conditions, together with iterating property (b), lead to the new concept of <em>perfect backwards rationalizability.</em> We show that perfect backwards rationalizable strategies exist in every finite dynamic game. We prove, moreover, that perfect backwards rationalizability constitutes a refinement of both <em>perfect rationalizability</em> (a rationalizability analogue to <span><span>Selten</span></span>'s (<span><span>1975</span></span>) perfect equilibrium) and <em>procedural quasi-perfect rationalizability</em> (a rationalizability analogue to <span><span>van Damme</span></span>'s (<span><span>1984</span></span>) quasi-perfect equilibrium) – two concepts that are introduced in this paper. As a consequence, our concept avoids both weakly dominated strategies in the normal form and strategies containing weakly dominated actions in the agent normal form. For one-shot games, the concept coincides with <em>permissibility</em> (<span><span>Brandenburger (1992)</span></span>, <span><span>Börgers (1994)</span></span>).</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"154 ","pages":"Pages 302-328"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145266860","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A direct proof of the short-side advantage in random matching markets","authors":"Simon Mauras , Paweł Prałat , Adrian Vetta","doi":"10.1016/j.geb.2025.08.013","DOIUrl":"10.1016/j.geb.2025.08.013","url":null,"abstract":"<div><div>We study the stable matching problem under the random matching model where the preferences of the doctors and hospitals are sampled uniformly and independently at random. In a balanced market with <em>n</em> doctors and <em>n</em> hospitals, the doctor-proposing deferred-acceptance algorithm gives doctors an expected rank of order <span><math><mi>log</mi><mo></mo><mi>n</mi></math></span> for their partners and hospitals an expected rank of order <span><math><mfrac><mrow><mi>n</mi></mrow><mrow><mi>log</mi><mo></mo><mi>n</mi></mrow></mfrac></math></span> for their partners (<span><span>Pittel, 1989</span></span>; <span><span>Wilson, 1972</span></span>). This situation is reversed in an unbalanced market with <span><math><mi>n</mi><mo>+</mo><mn>1</mn></math></span> doctors and <em>n</em> hospitals (<span><span>Ashlagi et al., 2017</span></span>), a phenomenon known as the short-side advantage. The current proofs (<span><span>Ashlagi et al., 2017</span></span>; <span><span>Cai and Thomas, 2022</span></span>) of this fact are indirect, counter-intuitively being based upon analyzing the hospital-proposing deferred-acceptance algorithm. In this paper we provide a direct proof of the short-side advantage, explicitly analyzing the doctor-proposing deferred-acceptance algorithm. Our proof sheds light on how and why the phenomenon arises.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"154 ","pages":"Pages 53-61"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145011139","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Naive analytics: The strategic advantage of algorithmic heuristics","authors":"Ron Berman , Yuval Heller","doi":"10.1016/j.geb.2025.08.009","DOIUrl":"10.1016/j.geb.2025.08.009","url":null,"abstract":"<div><div>We study interactions with uncertainty about demand sensitivity that is estimated by analytics algorithms. In our solution concept (1) firms choose seemingly optimal strategies based on estimates from possibly biased analytics algorithms, and (2) the levels of biases form best replies to one another. In equilibrium the firms' algorithms overestimate advertising effectiveness, as observed empirically, which causes advertisers to overspend. In price competitions firms also underestimate price elasticities and set prices too high. In games with strategic complements (substitutes), profits induced by such “naive analytics” equilibria Pareto dominate (are dominated by) those induced by the Nash equilibrium.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"154 ","pages":"Pages 62-78"},"PeriodicalIF":1.0,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145020700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Measuring tastes for equity and aggregate wealth behind the veil of ignorance","authors":"Jan Heufer , Jason Shachat , Yan Xu","doi":"10.1016/j.geb.2025.06.005","DOIUrl":"10.1016/j.geb.2025.06.005","url":null,"abstract":"<div><div>We propose an instrument to measure individuals' social preferences regarding equity and efficiency behind a veil of ignorance while controlling for idiosyncratic risk preferences. We construct a battery of portfolio and wealth distribution choice problems sharing a common budget set. A given bundle induces the same distribution over an individual's wealth in both problems. The portfolio choice solely reflects an individual's risk attitude, providing a benchmark to evaluate whether their wealth distribution choice exhibits equity or efficiency preferring tastes. Our experiments show clusters of social preference types, which are unexpectedly independent of risk preferences.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"153 ","pages":"Pages 209-232"},"PeriodicalIF":1.0,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144471816","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Austin Brooksby , Jacob Meyer , Lucas Rentschler , Vernon Smith , Robbie Spofford
{"title":"“Equilibrium play in voluntary ultimatum games: Beneficence cannot be extorted” - Comment","authors":"Austin Brooksby , Jacob Meyer , Lucas Rentschler , Vernon Smith , Robbie Spofford","doi":"10.1016/j.geb.2025.05.009","DOIUrl":"10.1016/j.geb.2025.05.009","url":null,"abstract":"<div><div><span><span>Smith and Wilson (2018)</span></span> argue that behavior in the ultimatum game may be due to the typical implementation, in which players are not given the opportunity to opt out of the game. Using insights from <span><span>Smith (1759)</span></span>, they suggest that making play voluntary would increase rates of equilibrium play. They conducted an augmented ultimatum game where the responder first decides whether to participate, and compare their experimental data to stylized facts from the literature, reporting “far higher rates of equilibrium play...than heretofore reported”. However, they do not run standard versions of the ultimatum game as a control. To ensure their interpretation is warranted, we conducted experiments of both their augmented game and an analogous standard ultimatum game. In our data, rates of equilibrium play were not higher in the augmented game. Thus, we find no support for the primary conclusion of <span><span>Smith and Wilson (2018)</span></span>.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"153 ","pages":"Pages 67-93"},"PeriodicalIF":1.0,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144254384","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Propaganda and conflict","authors":"Petros G. Sekeris","doi":"10.1016/j.geb.2025.08.006","DOIUrl":"10.1016/j.geb.2025.08.006","url":null,"abstract":"<div><div>In this article we explore how propaganda relates to conflict initiation. In the presence of propaganda, if conflict is highly destructive, parties invest in armaments to improve their share of the pie at the negotiation table. If conflict is lowly destructive, peace is never reached and arming is implemented to boost the troops' morale and fighting efficiency. For intermediate destruction levels, the game only admits mixed strategy equilibria where peace and conflict occur probabilistically. A world without propaganda Pareto-dominates one where information can be manipulated. Although lowly destructive conflicts are conducive to war, arming can pacify the situation by giving rise to mixed strategy equilibria where peace is played with strictly positive probability. Countries are shown to have incentives to invest in propaganda despite the fact that war will then occur with strictly positive probability.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"153 ","pages":"Pages 569-585"},"PeriodicalIF":1.0,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144887014","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Working with AI: An analysis for rational integration","authors":"David Lagziel, Yevgeny Tsodikovich","doi":"10.1016/j.geb.2025.06.009","DOIUrl":"10.1016/j.geb.2025.06.009","url":null,"abstract":"<div><div>A decision maker (DM) uses an AI agent to estimate an unknown state, for which both possess informative private signals. Conditional on the state and the DM's final assessment, he prefers the AI's recommendations to be incorrect, thus affirming his own superiority or sharing the blame. Our analysis indicates that the correctness of the process is not a monotone function of participants' expertise levels: (i) a less accurate AI may lead to improved outcomes by reducing the DM's reliance on it, and (ii) a less accurate DM can enhance information aggregation leading to a superior result.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"153 ","pages":"Pages 254-267"},"PeriodicalIF":1.0,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144614614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Contract breach with overconfident expectations: Experimental evidence on reference-dependent preferences","authors":"Sabine Fischer , Kerstin Grosch","doi":"10.1016/j.geb.2025.05.012","DOIUrl":"10.1016/j.geb.2025.05.012","url":null,"abstract":"<div><div>This study examines the effect of agents' overconfident expectations in their production on their contract breach. Drawing on a reference-dependent framework, we theoretically deduce propositions for compliance to agreements where an agent exhibits overconfidence and loss aversion. We further conduct a lab experiment with a multiple-stage design and find that overconfident agents are more likely to breach the contract than non-overconfident agents. Moreover, overconfident agents breach more often and to a greater extent with increasing loss aversion. We also test the impact of a non-deterministic environment (“shock condition”) where payoff misestimation can be masked compared to a deterministic environment (“no-shock condition”). Agents breach more often in the shock condition, but breach extent remains unaffected. Results are mostly in line with the theoretical framework. In a treatment, we manipulate agents' overconfidence exogenously and use it as an instrument to establish causality.</div></div>","PeriodicalId":48291,"journal":{"name":"Games and Economic Behavior","volume":"153 ","pages":"Pages 145-163"},"PeriodicalIF":1.0,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144271798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}