Three Essays on Game Theory
This thesis consists of three essays on game theory.In the first essay we consider an endogenous formation of researchjoint ventures by introducing heterogeneity of the firms. When thefirms are characterized by a one dimensional parameter, we showthat there is a tendency towards similar firms forming a coalitionunder an infinite-horizon sequential-move coalition unanimityrule. When there are two types of firms in the market and thenumber of firms of each type is equal, we show that in equilibriumthere exist two coalitions, and if the degree of heterogeneity issufficiently large we have a complete segregation of the firms inthe equilibrium coalition structure, that is, all high-type firmsform one coalition and all low-type firms form the othercoalition.In the second essay we consider contests in which players can formcoalitions before expending their efforts. When there is one strongand two weak players, we show that the strong player never forms acoalition with a weak one in an elimination contest in which theonly one who survives takes the whole prize. However, we also showthat a strong-weak coalition may emerge in a coalitionalbargaining in which the players can make a binding agreement on theshare of their coalitional worth.In the third essay we analyze optimal contracts for teams in bothstatic and repeated setting. When an agent's work has a positiveexternality on the performance signal of his peer agent, jointperformance evaluation may give the strongest incentive to workand be an optimal contract in the static setting. In the samesituation, relative performance evaluation may induce the use ofshirk as a punishment and be an optimal contract in the repeatedsetting, with a large discount factor. In both static and repeatedsetting, relative performance evaluation is more effective whenthe favorable common shock is more likely to happen.
Year of publication: |
2005-08-13
|
---|---|
Authors: | Na, Sunghyun |
Other Persons: | Kalyan Chatterjee (contributor) ; Vijay Krishna (contributor) ; James Jordan (contributor) ; Anthony Kwasnica (contributor) |
Publisher: |
Penn State |
Saved in:
freely available
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