We report results from a trust game applied in a dynamic setting, which enhances investment possibilities and offers higher potential payoff from cooperation. The proposed approach better reflects the predicaments people face in concluding informal contracts and enables to investigate dynamics of cooperation relationships between players. Although, transferred shares of the disposable endowment do not differ significantly across the standard and modified games, in the absolute values people send more in the dynamic context. Our results suggest that the dynamic setting of the relationship, which has been often ignored in previous studies, might be an important determinant of trust.
Robert J. Aumann received the Nobel Prize in Economic Sciences in 2005 for his work on conflict and cooperation through game-theory analysis. The best known of his achievements is the concept of correlated equilibrium. He is also famous, not only among scientists, for his attempts to apply mathematical results to real political conflicts. The paper presents the sketch of main ideas of Aumann’s, including common knowledge and rationality, theorem considering Nash equilibria in iterated games, correlated equilibrium and theorem related to “agreeing to disagree”. There is also mentioned a very interesting problem of “how the Talmud divides an estate among creditors”, solved by Aumann. Moreover, the personal profile of Aumann is presented, as a man and as a political figure.
The paper develops a simple supergame model of collusion that focuses on the role of fixed (exogenous to game played) system of quantity market shares. Conclusions implied by the model could be used to motivate data - saving markers of collusion based on market price behavior. Following conclusions of the theoretical model we propose marker of collusion based on detecting changes in seasonal parameters of prices in periods of possible collusion. An empirical application of method has been done on well known data of Lysine cartel case.
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.