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Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?

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Title: Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?
Authors: Braouezec, Yann1 (AUTHOR) y.braouezec@ieseg.fr, Kiani, Keyvan2 (AUTHOR) kiani@em-lyon.com
Source: European Journal of Operational Research. Jul2023, Vol. 308 Issue 1, p467-479. 13p.
Subjects: Nash equilibrium, Carbon emissions, Collective action, Games, Common good
Abstract: • We offer a generalized game in which the shared constraint is generated from the individual ones. • The set of Nash equilibria in shared constraint contains the set of Nash equilibria in individual constraints. • Two economic applications are provided. A generalized game is a situation in which interaction between agents occurs not only through their objective function but also through their strategy sets; the strategy set of each agent depends upon the decision of the other agents and is called the individual constraint. As opposed to generalized games with exogenous shared constraint literature pioneered by Rosen (1965), we take the individual constraints as the basic premises and derive the shared constraint generated from the individual ones, a set K. For a profile of strategies to be a Nash equilibrium of the game with individual constraints, it must lie in K. But if, given what the others do, each agent agrees to restrict her choice in K , something that we call an endogenous shared constraint, this mutual restraint may generate new Nash equilibria. We show that the set of Nash equilibria in endogenous shared constraint contains the set of Nash equilibria in individual constraints. In particular, when there is no Nash equilibrium in individual constraints, there may still exist a Nash equilibrium in endogenous shared constraint. We also prove a few results for a specific class of generalized games that we call non-classical games. Finally, we give two economic applications of our results to collective action problems: carbon emission and public good problems. [ABSTRACT FROM AUTHOR]
Copyright of European Journal of Operational Research is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
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DbLabel: Engineering Source
An: 161939644
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  Data: Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?
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  Data: <searchLink fieldCode="AR" term="%22Braouezec%2C+Yann%22">Braouezec, Yann</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> y.braouezec@ieseg.fr</i><br /><searchLink fieldCode="AR" term="%22Kiani%2C+Keyvan%22">Kiani, Keyvan</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> kiani@em-lyon.com</i>
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  Data: <searchLink fieldCode="JN" term="%22European+Journal+of+Operational+Research%22">European Journal of Operational Research</searchLink>. Jul2023, Vol. 308 Issue 1, p467-479. 13p.
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  Data: <searchLink fieldCode="DE" term="%22Nash+equilibrium%22">Nash equilibrium</searchLink><br /><searchLink fieldCode="DE" term="%22Carbon+emissions%22">Carbon emissions</searchLink><br /><searchLink fieldCode="DE" term="%22Collective+action%22">Collective action</searchLink><br /><searchLink fieldCode="DE" term="%22Games%22">Games</searchLink><br /><searchLink fieldCode="DE" term="%22Common+good%22">Common good</searchLink>
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  Label: Abstract
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  Data: • We offer a generalized game in which the shared constraint is generated from the individual ones. • The set of Nash equilibria in shared constraint contains the set of Nash equilibria in individual constraints. • Two economic applications are provided. A generalized game is a situation in which interaction between agents occurs not only through their objective function but also through their strategy sets; the strategy set of each agent depends upon the decision of the other agents and is called the individual constraint. As opposed to generalized games with exogenous shared constraint literature pioneered by Rosen (1965), we take the individual constraints as the basic premises and derive the shared constraint generated from the individual ones, a set K. For a profile of strategies to be a Nash equilibrium of the game with individual constraints, it must lie in K. But if, given what the others do, each agent agrees to restrict her choice in K , something that we call an endogenous shared constraint, this mutual restraint may generate new Nash equilibria. We show that the set of Nash equilibria in endogenous shared constraint contains the set of Nash equilibria in individual constraints. In particular, when there is no Nash equilibrium in individual constraints, there may still exist a Nash equilibrium in endogenous shared constraint. We also prove a few results for a specific class of generalized games that we call non-classical games. Finally, we give two economic applications of our results to collective action problems: carbon emission and public good problems. [ABSTRACT FROM AUTHOR]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of European Journal of Operational Research is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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RecordInfo BibRecord:
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      – Type: doi
        Value: 10.1016/j.ejor.2022.10.036
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      – Code: eng
        Text: English
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      Pagination:
        PageCount: 13
        StartPage: 467
    Subjects:
      – SubjectFull: Nash equilibrium
        Type: general
      – SubjectFull: Carbon emissions
        Type: general
      – SubjectFull: Collective action
        Type: general
      – SubjectFull: Games
        Type: general
      – SubjectFull: Common good
        Type: general
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      – TitleFull: Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?
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              M: 07
              Text: Jul2023
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              Y: 2023
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