Game of variable contributions to the common good under uncertainty

DOI10.1287/OPRE.2019.1879zbMATH Open1497.91029arXiv1904.00500OpenAlexW3002581744WikidataQ126298862 ScholiaQ126298862MaRDI QIDQ5095145FDOQ5095145

Authors: H. Dharma Kwon 

Publication date: 5 August 2022

Published in: Operations Research (Search for Journal in Brave)

Abstract: We consider a stochastic game of contribution to the common good in which the players have continuous control over the degree of contribution, and we examine the gradualism arising from the free rider effect. This game belongs to the class of variable concession games which generalize wars of attrition. Previously known examples of variable concession games in the literature yield equilibria characterized by singular control strategies without any delay of concession. However, these no-delay equilibria are in contrast to mixed strategy equilibria of canonical wars of attrition in which each player delays concession by a randomized time. We find that a variable contribution game with a single state variable, which extends the Nerlove-Arrow model, possesses an equilibrium characterized by regular control strategies that result in a gradual concession. This equilibrium naturally generalizes the mixed strategy equilibria from the canonical wars of attrition. Stochasticity of the problem accentuates the qualitative difference between a singular control solution and a regular control equilibrium solution. We also find that asymmetry between the players can mitigate the inefficiency caused by the gradualism.

Full work available at URL: https://arxiv.org/abs/1904.00500

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zbMATH Keywords

war of attritionfree rider problemgradualismNerlove-Arrow modelstochastic control game

Mathematics Subject Classification ID

2-person games (91A05) Stochastic games, stochastic differential games (91A15)

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Cited In (7)

• Dynamic voluntary provision of public goods with uncertainty: a stochastic differential game model
• Uncertainty over uncertainty in environmental policy adoption: Bayesian learning of unpredictable socioeconomic costs
• Investment in the common good: free rider effect and the stability of mixed strategy equilibria
• Rogue traders
• Nonzero-sum submodular monotone-follower games: existence and approximation of Nash equilibria
• Contribution games with asymmetric agents
• Continuous-time public good contribution under uncertainty: a stochastic control approach

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