Noncooperative Game-theoretic Models Research Articles

Access Economy for Storage in Energy Communities

We address the market design issue for a local energy community, comprising prosumers, consumers, photovoltaic, and energy storage systems, all connected as a community to a distribution grid. Our work explores different market design options based on cooperative and non-cooperative game-theoretic models that enable an economic access to the benefits of energy storage for prosumers without a direct ownership of a storage system. We compare market outcomes in terms of the community cost as well as the individual cost. We pay special attention to potential uncertainties, and investigate financial instruments that allow storage systems to be utilized by multiple prosumers. In particular, we explore a case where a prosumer that owns a storage system provides rights, either physical or financial, rather than participating in the local market as an arbitrageur. Moreover, we consider a cooperative market design where energy community members agree on the Shapley value or the nucleolus as a community cost allocation rule. Our results show that an access economy for energy storage systems enhances energy communities by reducing the cost volatility for most prosumers, while the expected operational cost of the community as a whole remains unchanged.

A Comparison of Game-Theoretic Models for Parallel Trade

Within the EU Single Market for medicines, differences in drug prices, regulations, and transaction costs may create, under suitable conditions, arbitrage opportunities well before patent expiration, giving an incentive to the occurrence of parallel trade. When this is permitted, parallel traders may obtain a profit from buying drugs in a country where prices are lower, then re-selling them in a country where prices are higher. This phenomenon may cause inefficiencies from a global welfare perspective, and reduce the manufacturers’ incentive to invest in Research and Development (R & D). Given this framework, in this paper, we investigate the efficiency (expressed in terms of the price of anarchy) of the subgame-perfect Nash equilibria associated with five dynamic noncooperative game-theoretic models for the parallel trade of pharmaceuticals. We also compare such models with regard to the manufacturer’s incentive to invest in R & D. More specifically, first we find in closed form the optimal value of the global welfare of two countries, which is obtained by solving a suitable quadratic optimization problem modeling the decision-making process of a global planner. Then, we use such a result to evaluate and compare the prices of anarchy of five games modeling the interaction between a manufacturer in the first country and a potential parallel trader in the second country. The first three games refer, respectively, to the cases of no parallel trade threat, parallel trade threat, and parallel trade occurrence at equilibrium. Then, we investigate two modifications of the third game, in which its transfer payment from the potential parallel trader to the manufacturer is, respectively, removed/determined by Nash bargaining. For completeness, we also consider a decision-theoretic model of no parallel trade threat. For what concerns the incentive for the manufacturer to invest in R & D, the results of our numerical comparison show that the decision-theoretic model of no parallel trade threat is always the one with the highest incentive, whereas the two game-theoretic models of parallel trade threat/occurrence that do not include the transfer payment provide typically the lowest incentives. Moreover, the latter two models have the highest prices of anarchy (i.e., their equilibria have the lowest efficiencies). From a policy-making perspective, improvements are obtained if suitable countermeasures are taken to help the manufacturer recover from the costs of R & D, such as the inclusion of a transfer payment in the model.

Non-cooperative and cooperative game-theoretic models for usage-based lease contracts

In this paper, we study game-theoretic models for lease contracts, by which the owner (lessor) rents a piece of equipment to a user (lessee). The lessee decides on the optimal lease period and usage rate, and the lessor is responsible for developing a maintenance policy for the equipment. Two non-cooperative game-theoretic models and a cooperative model are developed to describe the relationships between the two decision makers. In the non-cooperative simultaneous move game, the lessee and the lessor act simultaneously and independently to make their decisions. In the leader–follower non-cooperative game, the lessor is the leader who specifies the maintenance policy first, and the lessee, as the follower, decides on the lease period and usage rate accordingly. For these two games, the Nash and Stackelberg equilibria are obtained respectively. For the cooperative game, we derive the solution targeting on total profit maximization and show that this solution can be implemented as an equilibrium using a nonlinear transfer-payment contract. Besides, we compare the Nash equilibrium, Stackelberg equilibrium, and the total maximum solution to each other, and our results show that the lessee and lessor can gain more profit from the cooperative contract than from the non-cooperative alternatives. Numerical examples are provided to demonstrate the different solution methodologies and the value of cooperation.

Coalition theory: a veto players’ approach

Coalition theories have produced arguments about the importance of party positions for participation in government coalitions, but have not connected the existing government institutions (in particular agenda setting) with the coalition government that will be formed. This article presents a veto players’ approach to coalition formation, which pushes the logic of non-cooperative game-theoretic models one step further: we argue that policy positions play a significant role in coalition formation because governments in parliamentary systems control the agenda of the policymaking process. As a result, the institutions that regulate this policymaking process affect coalition formation. In particular, positional advantages that a government may have (central policy position offormateur, fewer parties, and small policy distances among coalition partners) will become more necessary as a government has fewer institutional agenda setting advantages at its disposal. The empirical tests presented in this paper corroborate these expectations by explicitly accounting for the conditional effects of policy positions and institutional agenda setting rules on one another in a set of multilevel logit models.

Modesty May Pay!

AbstractMost noncooperative game theoretic models of international environmental agreements (IEAs) draw a pessimistic picture of the prospective of successful cooperation. In this paper, we consider the possibility that countries agree on modest instead of ambitious abatement targets. It is shown that this can be an explanation for higher participation and more successful treaties. Thus, modesty may well pay, though the first‐best optimum cannot be achieved. It is also demonstrated that our model extension makes it easier to relate the stylized model to actual negotiations.

Performance of Rake Receivers in IR-UWB Networks Using Energy-Efficient Power Control

This paper studies the performance of partial-Rake (PRake) receivers in impulse-radio ultrawideband wireless networks when an energy-efficient power control scheme is adopted. Due to the large bandwidth of the system, the multipath channel is assumed to be frequency-selective. By making use of noncooperative game-theoretic models and large-system analysis tools, explicit expressions are derived in terms of network parameters to measure the effects of self-interference and multiple-access interference at a receiving access point. Performance of the PRake receivers is thus compared in terms of achieved utilities and loss to that of the all-Rake receiver. Simulation results are provided to validate the analysis.

MODELS OF GOVERNMENT FORMATION

▪ Abstract This review deals with the making and breaking of governments in “minority legislatures” in which no political party controls a majority of seats. It looks at both a priori and empirical approaches to analyzing government formation, at the application of both cooperative and noncooperative game-theoretic models, and at the impact of both office-seeking and policy-seeking assumptions about the motivations of politicians. Substantive themes covered include the partisan composition of both minority and majority cabinets, the allocation of cabinet portfolios between parties, and the duration of cabinets in minority legislatures. The way forward in this field is identified in terms of the need for more dynamic models that see government formation as a complex system within the broader context of party competition as a whole, and for models that take fundamental account of intraparty politics in their description of the strategic behavior of political parties.

SOCIAL CHOICE THEORY, GAME THEORY, AND POSITIVE POLITICAL THEORY

▪ Abstract We consider the relationships between the collective preference and non-cooperative game theory approaches to positive political theory. In particular, we show that an apparently decisive difference between the two approaches—that in sufficiently complex environments (e.g. high-dimensional choice spaces) direct preference aggregation models are incapable of generating any prediction at all, whereas non-cooperative game-theoretic models almost always generate prediction—is indeed only an apparent difference. More generally, we argue that when modeling collective decisions there is a fundamental tension between insuring existence of well-defined predictions, a criterion of minimal democracy, and general applicability to complex environments; while any two of the three are compatible under either approach, neither collective preference nor non-cooperative game theory can support models that simultaneously satisfy all three desiderata.