Abstract
| Original language | English |
|---|---|
| Place of Publication | Jena, Germany |
| Publisher | Max Planck Gesellschaft |
| Publication status | Published - 2004 |
Publication series
| Name | Papers on economics & evolution, 1430-4716 |
|---|---|
| Publisher | Max-Planck-Gesellschaft |
| No. | 2004-17 |
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Keywords
- IR-61517
- Frequency-dependent stage payoffs
- average rewards
- repeated and stochastic games
- Folk Theorems
Cite this
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Strategic interaction and externalities: FD-games and pollution. / Joosten, Reinoud A.M.G.
Jena, Germany : Max Planck Gesellschaft, 2004. (Papers on economics & evolution, 1430-4716; No. 2004-17).Research output: Book/Report › Report › Other research output
TY - BOOK
T1 - Strategic interaction and externalities: FD-games and pollution
AU - Joosten, Reinoud A.M.G.
PY - 2004
Y1 - 2004
N2 - To analyze strategic interaction which may induce externalities, we designed Bathroom Games with frequency-dependent stage payoffs. Two people regularly use a bathroom, before leaving they can either clean up the mess made, or not. Cleaning up involves an effort, so this option always gives a lower immediate utility than not cleaning up. The immediate utility of using the bathroom depends on its condition: the cleaner it is, the higher the utility. The pollution at a certain point in time depends on how often the players did not clean up in the past. Furthermore, as the bathroom's condition deteriorates, cleaning up becomes more burdensome, leading to increasing disutilities. We follow the analysis of repeated games and find that if the agents are sufficiently patient, individually-rational rewards can be supported by (subgame perfect) equilibria involving threats. In almost every such equilibrium, the bathroom is cleaned up regularly.
AB - To analyze strategic interaction which may induce externalities, we designed Bathroom Games with frequency-dependent stage payoffs. Two people regularly use a bathroom, before leaving they can either clean up the mess made, or not. Cleaning up involves an effort, so this option always gives a lower immediate utility than not cleaning up. The immediate utility of using the bathroom depends on its condition: the cleaner it is, the higher the utility. The pollution at a certain point in time depends on how often the players did not clean up in the past. Furthermore, as the bathroom's condition deteriorates, cleaning up becomes more burdensome, leading to increasing disutilities. We follow the analysis of repeated games and find that if the agents are sufficiently patient, individually-rational rewards can be supported by (subgame perfect) equilibria involving threats. In almost every such equilibrium, the bathroom is cleaned up regularly.
KW - IR-61517
KW - Frequency-dependent stage payoffs
KW - average rewards
KW - repeated and stochastic games
KW - Folk Theorems
M3 - Report
T3 - Papers on economics & evolution, 1430-4716
BT - Strategic interaction and externalities: FD-games and pollution
PB - Max Planck Gesellschaft
CY - Jena, Germany
ER -