Cooperative games in strategic form

In this paper we view bargaining and cooperation as an interaction superimposed on a strategic form game. A multistage bargaining procedure for N players, the proposer commitment procedure, is presented. It is inspired by Nash s two-player variable-threat model; a key feature is the commitment to threats. We establish links to classical cooperative game theory solutions, such as the Shapley value in the transferable utility case. However, we show that even in standard pure exchange economies the traditional coalitional function may not be adequate when utilities are not transferable.

A foundation for strategic agenda voting

We offer complete characterizations of the equilibrium outcomesof two prominent agenda voting institutions that are widely used in the democraticworld: the amendment, also known as the Anglo-American procedure,and the successive, or equivalently the Euro-Latin procedure. Our axiomaticapproach provides a proper understanding of these voting institutions, and allowscomparisons between them, and with other voting procedures.

On payoff heterogeneity in games with strategic complementarities

Payoff heterogeneity weakens positive feedback in binary choice models intwo ways. First, heterogeneity drives individuals to corners where theyare unaffected by strategic complementarities. Second, aggregate behaviouris smoother than individual behaviour when individuals are heterogeneous.However, this smoothing does not necessarily eliminate positive feedbackor guarantee a unique equilibrium. In games with an unbounded, continuouschoice space, heterogeneity may either weaken or strengthen positive feedback,depending on a simple convexity/concavity condition. We conclude that positivefeedback phenomena derived in representative agent models will often be robustto heterogeneity.

Measuring strategic uncertainty in coordination games

This paper explores three aspects of strategic uncertainty: its relation to risk, predictability of behavior and subjective beliefs of players. In a laboratory experiment we measure subjects certainty equivalents for three coordination games and one lottery. Behavior in coordination games is related to risk aversion, experience seeking, and age.From the distribution of certainty equivalents we estimate probabilities for successful coordination in a wide range of games. For many games, success of coordination is predictable with a reasonable error rate. The best response to observed behavior is close to the global-game solution. Comparing choices in coordination games with revealed risk aversion, we estimate subjective probabilities for successful coordination. In games with a low coordination requirement, most subjects underestimate the probability of success. In games with a high coordination requirement, most subjects overestimate this probability. Estimating probabilistic decision models, we show that the quality of predictions can be improved when individual characteristics are taken into account. Subjects behavior is consistent with probabilistic beliefs about the aggregate outcome, but inconsistent with probabilistic beliefs about individual behavior.

Strategic behavior and price discovery

The paper analyzes the effects of strategic behavior by an insider in a price discovery process, akin to an information tatonnement, in the presence of a competitive informed sector. Such processes are used in the preopening period of continuous trading systems in several exchanges. It is found that the insider manipulates the market using a contrarian strategy in order to neutralize the effect of the trades of competitive informed agents. Furthermore, consistently with the empirical evidence available, we find that information revelation accelerates close to the opening, that the market price does not converge to the fundamental value no matter how many rounds the tatonnement has, and that the expected trading volume displays a U-shaped pattern. We also find that a market with a larger competitive sector (smaller insider) has an improved informational efficiency and an increased trading volume. The insider provides a public good (a lower informativeness of the price) for the competitive informed sector.

Minimax regret and strategic uncertainty

This paper introduces a new solution concept, a minimax regret equilibrium, which allows for the possibility that players are uncertain about the rationality and conjectures of their opponents. We provide several applications of our concept. In particular, we consider pricesetting environments and show that optimal pricing policy follows a non-degenerate distribution. The induced price dispersion is consistent with experimental and empirical observations (Baye and Morgan (2004)).

Strategic delegation in monetary unions

In monetary unions, monetary policy is typically made by delegates of the member countries. This procedure raises the possibility of strategic delegation - that countries may choose the types of delegates to influence outcomes in their favor. We show that without commitment in monetary policy, strategic delegation arises if and only if three conditions are met: shocks affecting individual countries are not perfectly correlated, risk-sharing across countries is imperfect, and the Phillips Curve is nonlinear. Moreover, inflation rates are inefficiently high. We argue that ways of solving the commitment problem, including the emphasis on price stability in the agreements constituting the European Union are especially valuable when strategic delegation is a problem.

Strategic ambiguity in electoral competition

Many have observed that political candidates running for election areoften purposefully expressing themselves in vague and ambiguous terms. In thispaper we provide a simple formal model of this phenomenon. We model theelectoral competition between two candidates as a two--stage game. In thefirst stage of the game two candidates simultaneously choose their ideologies,and in the second stage they simultaneously choose their level of ambiguity.Our results show that ambiguity, although disliked by voters, may be sustainedin equilibrium. The introduction of ambiguity as a strategic choice variablefor the candidates can also serve to explain why candidates with the sameelectoral objectives end up ``separating'', that is, assuming different ideological positions.

On forward induction and evolutionary and strategic stability

We analyze which normal form solution concepts capture the notion offorward induction, as defined by van Damme (JET, 1989) in the classof generic two player normal form games preceded by an outsideoption. We find that none of the known strategic stability concepts(including Mertens stable sets and hyperstable sets) captures this form of forward induction. On the other hand, we show that the evolutionary concept of EES set (Swinkels, JET, 1992) is always consistent with forward induction.

Managing by values in the next milenium: Cultural redesign for strategic organizational change

The system of beliefs and values, that shaped the model for management and organizations during the 20th century, is just not good enough today. In order to keep a business functioning well and competing successfully in markets that are increasingly more global, complex, professionally demanding, constantly changing and oriented towards quality and customer satisfaction a new model is needed. In this paper, we will propose that both Management by Instructions (MBI) and Management by Objectives (MBO) today give notoriously inadequate results. By contrast, description of a new approach labeled: Management by Values (MBV), seem to be emerging as a strategic leadership tool. The paper outlines this approach and discusses the implementation of MBV as a tool to redesign culture in organizations and prepare them for the next millenium.

Validation procedures in radiological diagnostic models. Neural network and logistic regression

The objective of this paper is to compare the performance of twopredictive radiological models, logistic regression (LR) and neural network (NN), with five different resampling methods. One hundred and sixty-seven patients with proven calvarial lesions as the only known disease were enrolled. Clinical and CT data were used for LR and NN models. Both models were developed with cross validation, leave-one-out and three different bootstrap algorithms. The final results of each model were compared with error rate and the area under receiver operating characteristic curves (Az). The neural network obtained statistically higher Az than LR with cross validation. The remaining resampling validation methods did not reveal statistically significant differences between LR and NN rules. The neural network classifier performs better than the one based on logistic regression. This advantage is well detected by three-fold cross-validation, but remains unnoticed when leave-one-out or bootstrap algorithms are used.

Europe and the Petersberg Tasks – Nation-State behavior through the prism of Strategic Culture

Les missions Petersberg són l'operatiu militar més ambiciós organitzat per la Unió Europea en el desenvolupament de la CSDP, Política Europea de Seguretat i Defensa. Amb l'objectiu d'aconseguir una organització efectiva y funcional d'aquestes missions, és desitjable que les cultures estratègiques dels diferents Estats membres siguin, en gran mesura, compatibles en benefici d'una cultura estratègica europea amb directrius clares. Aquest estudi compara les cultures estratègiques d'Alemanya, el Regne Unit i França en referència al seu nivell de compatibilitat contrastant-les amb dos casos recents, exemples paradigmàtics de cultures estratègiques integrals. D'aquesta manera, pretenem descriure les circumstàncies en què es desenvolupen les missions Petersberg.

Diagnostic INSMED: Cuentagotas S.L.

Modèle de diagnostic C4.1.1 (UPC)