Game-theoretic Analysis Research Articles

The Ukrainian Crisis: a Game-Theoretic Analysis of the Complex Interplay between Ukraine, Russia, and the West

Abstract This study gives a general overview of the Ukrainian crisis through the lens of game theory, examining the motivations and constraints of Ukraine, Russia, and the West. Game theory provides structural concepts that explore trust, cooperation, risk-taking, and coordination challenges within the crisis. The analysis considers the impact of power imbalances and external factors like alliances and historical ties, strategic behavior, and other factors. The article concludes by highlighting key takeaways from the game-theoretic approach that can provide a roadmap towards a deeper analysis, and a structural diplomatic approach to conflict resolution.

Effects of Externalities on Emotions: A Game-Theoretic Analysis

Effects of Externalities on Emotions: A Game-Theoretic Analysis

Regulated Pricing Decisions and Diagnostic Test Choices in Personalized Medicine: Navigating the Implications Within Legal Frameworks.

The emerging risk of personalized medicine is driving drug manufacturers to seek collaborations with advanced diagnostic firms, aiming to improve detection and treatment outcomes. However, the government's regulated pricing in personalized medicine affects manufacturers' strategic decisions, particularly regarding the selection of diagnostic partners. In this context, this study investigates whether the government should regulate the price of personalized medicine and how the government's regulated pricing decisions affect drug manufacturers' diagnostic test choices. A stylized analytical model was developed, employing game-theoretic analysis. Numerical studies are also conducted to validate our results. The study reveals that in the absence of the government's regulated pricing, drug manufacturers benefit from partnering with high-level diagnostic firms, enhancing consumer surplus and social welfare. However, when the government regulates pricing, the choice of partnering with a high-level diagnostic firm depends on specific conditions, such as low patient sensitivity to treatment failure and a low unit cost coefficient of diagnostic effort. The government's decision to regulate prices is influenced by three key parameters: patients' sensitivity to treatment failure, the unit cost coefficient of the diagnostic test effort, and the proportion of the price of specialized drugs in the regulated pricing. The findings underscore the importance of legal frameworks in the personalized medicine industry. The absence of the government's regulated pricing incentivizes collaborations with high-level diagnostic firms, enhancing consumer surplus and social welfare. However, government intervention in pricing makes such decisions contingent on specific conditions, requiring nuanced regulatory policies that balance the interests of patients, manufacturers, and diagnostic firms.

Game theoretical analysis and mechanism design to find effective environmental policies for greening Iran’s automotive industry

Game theoretical analysis and mechanism design to find effective environmental policies for greening Iran’s automotive industry

A Game-Theoretic Analysis of the Interaction Between Embargoes, Price Caps and Tariffs in EU-Russia Gas Trade

A Game-Theoretic Analysis of the Interaction Between Embargoes, Price Caps and Tariffs in EU-Russia Gas Trade

Strategic investment in power generation and transmission under a feed-in premium scheme: a game theoretic real options analysis

Strategic investment in power generation and transmission under a feed-in premium scheme: a game theoretic real options analysis

Game-Theoretic Analysis of Adversarial Decision Making in a Complex Socio-Physical System

Game-Theoretic Analysis of Adversarial Decision Making in a Complex Socio-Physical System

Beliefs, strategic interaction, and Hong Kong’s anti-extradition law movement: A game-theoretic analysis

Given the information and beliefs about the possibility of repression, when will the civil society organize protests against the government? Under what conditions will the government repress popular protests? In this paper, I employ a novel signaling game to model the strategic interaction between the regime and civil society during the 2019 Anti-Extradition Law Movement in Hong Kong. I illustrate how information and beliefs influence whether the civil society mobilizes mass protests. Specifically, I examine how government actions shape the civil society’s beliefs about the government type, which in turn determine the protest turnouts and the government’s decision to repress.

Game-theoretic analysis of Net Neutrality effects

Net Neutrality imposes restrictions on the work of Internet Service Providers (ISPs), which can significantly affect social welfare. This article analyzes the following rules established by the Net Neutrality: zero price rule and the prohibition of exclusive deals between ISPs and Content Providers (CPs). The aim of the study is to determine the impact of Net Neutrality on the welfare of various groups of economic agents. To study these implications, the authors create a game-theoretic model of the ISPs market, the unique feature of which is the following heterogeneity of CPs: one large CP creates a large cross-side network effect for consumers and is able to strike exclusive deals with ISPs without Net Neutrality; many small CPs create a small network effect and are unable to influence prices. The following conclusions were obtained: there are ranges of model parameters in which Net Neutrality increases profits of ISPs and reduces profits of a large CP; increases total social welfare if a large CP joins both ISPs without Net Neutrality. The impact of Net Neutrality on consumer surplus and profits of small CPs at these parameter ranges depends on the exclusivity of a large CP in absence of Net Neutrality. Consequently, certain effects of Net Neutrality may differ dramatically depending on how widespread the exclusivity of CPs will be in its absence. These findings may help regulators better assess the implications of Net Neutrality and make a justified decision on its implementation.

Game-theoretic analysis of governance and corruption in China's pharmaceutical industry.

With the rapid development of China's pharmaceutical industry, issues of corruption and regulatory effectiveness have become increasingly prominent, posing critical challenges to public health safety and the industry's sustainable development. This paper adopts a bounded rationality perspective and employs a game-theoretic evolutionary approach to establish a tripartite evolutionary game model involving pharmaceutical companies, third-party auditing organizations, and health insurance regulatory agencies. It analyzes the stable strategies of the parties involved and the sensitivity of key parameters within this tripartite game system. The study reveals that adherence to health insurance regulations by pharmaceutical companies, refusal of bribes by third-party auditing organizations, and the implementation of lenient regulations by health insurance agencies can form an effective governance equilibrium. This equilibrium state contributes to reducing corruption in the pharmaceutical industry, balancing the interests of all parties, and promoting healthy industry development. Pharmaceutical companies must balance compliance costs against the risks of non-compliance benefits while maximizing profits; third-party auditing organizations need to choose between fulfilling their duties and accepting bribes, considering their economic benefits and professional reputation; health insurance regulatory agencies adjust their strategies between strict and lenient regulation to maximize social welfare. The paper suggests enhancing policy support, strengthening compliance supervision, improving audit independence, and adjusting regulatory strategies to optimize governance in the pharmaceutical industry. Additionally, the research highlights the role of collaborative efforts among the three parties in achieving sustainable governance. Furthermore, the study conducts a numerical simulation analysis to demonstrate the impact of various parameters on the evolutionary stability of the system, providing practical insights into the implementation of regulatory policies. This research offers new insights for policy formulation and governance in China's pharmaceutical sector, providing significant reference value for guiding the industry's sustainable development.

Game Theoretic Analysis of School and Family Decision-Making in the Context of China’s after-School Services after the Double Reduction Policy

Game Theoretic Analysis of School and Family Decision-Making in the Context of China’s after-School Services after the Double Reduction Policy

Use of Nash equilibrium in finding game theoretic robust security bound on quantum bit error rate

Nash equilibrium is employed to find a game theoretic robust security bound on quantum bit error rate (QBER) for DL04 protocol which is a scheme for quantum secure direct communication that has been experimentally realized recently. The receiver, sender and eavesdropper (Eve) are considered to be quantum players (players having the capability to perform quantum operations). Specifically, Eve is considered to have the capability of performing quantum attacks (e.g., Wójcik’s original attack, Wójcik’s symmetrized attack and Pavičić attack) and classical intercept and resend attack. Game theoretic analysis of the security of DL04 protocol in the above scenario is performed by considering several game scenarios. The analysis revealed the absence of a Pareto optimal Nash equilibrium point within these game scenarios. Consequently, mixed strategy Nash equilibrium points are identified and employed to establish both upper and lower bounds for QBER. Further, the vulnerability of the DL04 protocol to Pavičić attack in the message mode is established. In addition, it is observed that the quantum attacks performed by Eve are more powerful than the classical attack, as the QBER value and the probability of detecting Eve’s presence are found to be lower in quantum attacks compared to classical ones.

Equilibrium and Efficiency in Decentralized Finance: A Game-Theoretic Analysis of DeFi Pools

Equilibrium and Efficiency in Decentralized Finance: A Game-Theoretic Analysis of DeFi Pools

Dynamic path for green product development: A game-theoretic analysis of product-process innovation with supply chain collaboration

Two contrasting paths are embraced within the practice of green product development: The first involves market entry with high-quality products in the initial phase, followed by a gradual release of mass-market products at reduced prices. The second entails entering the market with low-quality products, followed by step-by-step improvements in quality. The decision-making on path selection is divided into two stages: in the first stage, firms choose green product technologies, and in the second stage, they determine the path for green product development based on the selected technologies. Our research findings highlight the crucial role of efficiency-cost ratios in product-process innovation for green product development. Equilibriums are only achievable when efficiency-cost ratios are relatively low. Given the singular impact of component cost on profit, the path for process innovation consistently trends downward, whereas the path for product innovation can either descend or ascend. Collaboration positively impacts the conditions for equilibrium existence, making it more attainable. When the manufacturer’s efficiency-cost ratio for product innovation is low, collaboration can transition the path from a descending trend to an ascending one, and vice versa. The selection of appropriate technological parameters is important for achieving a win–win relationship between the environment and profitability. Additionally, we have expanded our models to include competition and marketing scenarios. We find that competition primarily influences green product development by altering the motivation for path selection. Marketing and product-process innovation demonstrate a complementary relationship.

On the credibility of threats to avoid the deployment of solar geoengineering

AbstractWe analyze how geoengineering in the form of solar radiation management (SRM), associated with the potential of high collateral damages, affects the governance architecture of climate agreements. We investigate under which conditions signatories to a climate agreement can avoid the deployment of SRM and implement a climate agreement on mitigation. We show that a climate agreement with all countries can be stable with the threat to deploy SRM in case a country free-rides. The threat is deterrent if collateral damages are perceived to be sufficiently high (lower threshold), but only credible if those damages are not too high (upper threshold). SRM deployment is the only threat available to signatories if they choose mitigation levels simultaneously with non-signatories (Nash–Cournot scenario). However, if signatories choose mitigation levels before non-signatories (Stackelberg scenario), an additional punishment option arises. Then if collateral damages are sufficiently large, signatories can reduce their mitigation levels and impose a heavier burden on non-signatories that would find it profitable to avoid the deployment of SRM. We show that our results are robust in two analytical frameworks frequently employed in the game-theoretic analysis of international environmental agreements.

The impact of live-streaming interactivity on live-streaming sales mode based on game-theoretic analysis

Many manufacturers who sell products through e-tailers in e-commerce channels launch a real-time interactivity live-streaming channel. The live-streaming interactivity includes consumer-streamer interaction (CSI) and consumer-consumer interaction (CCI). Thus, manufacturers generally hire influential streamers to expand the market size (i.e., Mode L) to improve live-streaming interactivity. However, some manufacturers act as streamers, i.e., merchant live-streaming mode (Mode M), to save the commission costs of hiring influential streamers. Therefore, we explore the manufacturer's live-streaming sales mode choice from a live-streaming interaction perspective through a game-theoretic method. We find when CCI is more positive (negative), Mode L is more helpful (unhelpful) in alleviating the double marginal effect of e-commerce channels than Mode M, increasing (reducing) e-commerce demand, and ultimately increasing (damaging) the e-tailer's profit. However, the size relationship between live-streaming prices in the two sales modes also relies on the streamer's commission rate, in addition to CCI. Finally, the conditions for the manufacturer to profit from either mode rest on the streamer's commission rate and CCI.

When Should Prices Stay Fixed? On the Chances and Limitations of Spot Pricing in Larger Markets

Selling resources via auctions often seems profit-optimal in theory. Yet in practice, providers most often choose to sell homogeneous resources such as cloud computing instances at fixed prices. While it has been argued that this is explained by relatively non-volatile demand distributions and highly competitive market environments, these arguments only paint a partial picture. Through a formal game theoretic analysis, we show that the relative profit increase of offering resources through a spot pricing mechanism instead of at a fixed price is unbounded as long as a sufficiently competitive outside option exists, even if demand is very non-volatile. To explain the lack of spot pricing in practice, we consider that users might be biased against more complex auction-based mechanisms. We find that in large, non-volatile markets even a very small user bias will turn fixed-pricing profit-optimal if demand is sufficiently large and non-volatile. We derive a sufficient condition under which fixed prices are profit-optimal and illustrate the observed effects through a numerical example.

Game-theoretic modelling and analysis of strategic investments for PV and shared battery

Game-theoretic modelling and analysis of strategic investments for PV and shared battery

A game theoretic conflict analysis model with linguistic assessments and two levels of game play

In a conflict scenario, the domestic and international stake holders vye to safeguard their specific vested interests and objectives, like in the Syrian and Afghan conflicts. Knowledge about the position of domestic players can help both domestic and international players determine the root causes of conflict and work in groups to resolve the divergent issues. Due to complex nature of conflicts, it is pertinent to study conflict at domestic and international levels separately. For this purpose, we design a two-level conflict analysis model based on game theory and linguistic assessments of players. The first level deals with local players by playing a game between each of them in view of local issues and taking into account the local grouping. At the second level, game is played between local groups and international players regarding multiple issues. In this way, all the parties calculate the gains or losses of comparable actions of each other. Thus, the proposed model provides a comprehensive study of conflict. This paper studies Syrian conflict to validate the conflict analysis algorithm and explain the computations and results.

Tolerance for corruption and descriptive social norm: An experimental study of embezzlement.

Public tolerance for corruption within a society significantly influences the prevalence of corrupt practices, but less is known about how this tolerance evolves with social norms. This paper presents experimental evidences demonstrating that the descriptive social norm indicating widespread corruption can lead to increased tolerance for corruptive acts. We introduce an asymmetric information ultimatum game to simulate the interactions between embezzlers and citizens. Game theoretical analysis reveals that victims anticipating corruption will exhibit greater compliance with embezzlement when the offers are evaluated based on descriptive norms. To test the hypothesis, we employ a framing effect to induce variations in descriptive norms within a behavioral experiment. Although the treatment effect is significant only in the subgroup of student cadres, this subgroup demonstrated increased beliefs about embezzlement, greater tolerance for corruption, and a heightened propensity to embezzle when exposed to framings with hierarchical implications. This paper contributes to the corruption literature by examining the effects of descriptive norms on victims' responses to embezzlement. It offers a more comprehensive perspective on how social standards shape public opinions and corrupt actions, enhancing our understanding of the self-reinforcing nature of corruption.