How profitable are strategic behaviors in a market?
How profitable are strategic behaviors in a market?
It is common wisdom that individuals behave strategically in economic environments. We consider Fisher markets with Leontief utilities and study strategic behaviors of individual buyers in market equilibria. While simple examples illustrate that buyers do get larger utilities when behaving strategically, we show that the benefits can be quite limited: We introduce the concept of incentive ratio to capture the extent to which utility can be increased by strategic behaviors of an individual, and show that the incentive ratio of Leontief markets is less than 2. We also reveal that the incentive ratios are insensitive to market sizes. Potentially, the concept incentive ratio can have applications in other strategic settings as well.
106-118
Chen, Ning
52f917c7-bcbf-4a36-9a60-d613627972a3
Deng, Xiaotie
772c0705-a735-43dc-8988-f5c527572574
Zhang, Jie
6bad4e75-40e0-4ea3-866d-58c8018b225a
2011
Chen, Ning
52f917c7-bcbf-4a36-9a60-d613627972a3
Deng, Xiaotie
772c0705-a735-43dc-8988-f5c527572574
Zhang, Jie
6bad4e75-40e0-4ea3-866d-58c8018b225a
Chen, Ning, Deng, Xiaotie and Zhang, Jie
(2011)
How profitable are strategic behaviors in a market?
Demetrescu, C. and Halldorsson, M.M.
(eds.)
In Algorithms: ESA 2011.
Springer.
.
(doi:10.1007/978-3-642-23719-5_10).
Record type:
Conference or Workshop Item
(Paper)
Abstract
It is common wisdom that individuals behave strategically in economic environments. We consider Fisher markets with Leontief utilities and study strategic behaviors of individual buyers in market equilibria. While simple examples illustrate that buyers do get larger utilities when behaving strategically, we show that the benefits can be quite limited: We introduce the concept of incentive ratio to capture the extent to which utility can be increased by strategic behaviors of an individual, and show that the incentive ratio of Leontief markets is less than 2. We also reveal that the incentive ratios are insensitive to market sizes. Potentially, the concept incentive ratio can have applications in other strategic settings as well.
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Published date: 2011
Additional Information:
© 2011 Springer-Verlag Berlin Heidelberg
Venue - Dates:
Annual European Symposium in Algorythm 2011, , Saarbrucken, Germany, 2011-09-06 - 2011-09-08
Organisations:
Agents, Interactions & Complexity
Identifiers
Local EPrints ID: 402603
URI: http://eprints.soton.ac.uk/id/eprint/402603
PURE UUID: 1a28910d-348b-484e-b7f0-679c04d1f98c
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Date deposited: 11 Nov 2016 16:40
Last modified: 16 Mar 2024 22:14
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Contributors
Author:
Ning Chen
Author:
Xiaotie Deng
Author:
Jie Zhang
Editor:
C. Demetrescu
Editor:
M.M. Halldorsson
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