Please use this identifier to cite or link to this item: http://hdl.handle.net/2381/37957
Title: Three Essays in Game Theory
Authors: Kozlovskaya, Maria
Supervisors: Jensen, Martin
Wallace, Christopher
Award date: 30-Jun-2016
Presented at: University of Leicester
Abstract: This thesis applies game theoretic methods to problems of individual choice and business strategy. It consists of three self-contained chapters. Chapters 2 and 3 explore strategic interaction between agents who are concerned about the social consequences of their actions, while Chapter 4 considers information use by firms who can spy on their competitors. By investigating these diverse topics, the thesis shows how Game Theory can be used to explain and predict outcomes in a variety of real-life scenarios of economic interest. Chapter 2 explores the effect of “other-regarding” preferences on the outcomes of repeated social interactions, modelled as a Prisoner’s Dilemma game. The models of inequality aversion and guilt aversion are identified as compatible with the existing laboratory evidence on the game, and a novel experiment is run to test them against each other. The experiment provided support for the inequality aversion model, which shows that fairness is an important consideration in repeated social interaction. Chapter 3 develops a formal theory of moral choice by proving a representation theorem for guilt-averse preferences. In the chapter, an axiomatic approach is used to deduce a utility function which explains how people trade off material and moral incentives. A novel logarithmic utility is proposed, which is grounded in realistic psychological assumptions and accounts well for the existing body of laboratory evidence. Chapter 4 investigates the welfare consequences of industrial espionage by modelling it as an information acquisition game played by duopolists. In the model, firms can acquire information about unobservable demand either by conducting market research, or by spying on their competitors. The chapter shows how the two information sources affect price and quantity decisions taken by firms. It also shows that aggregate profit and social welfare grow with the precision of the intelligence technology in most environments.
Links: http://hdl.handle.net/2381/37957
Type: Thesis
Level: Doctoral
Qualification: PhD
Rights: Copyright © the author. All rights reserved.
Appears in Collections:Theses, Dept. of Economics
Leicester Theses

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