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Games
Special Issues
Applications of Game Theory to Industrial Organization
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Applications of Game Theory to Industrial Organization

A special issue of Games (ISSN 2073-4336). This special issue belongs to the section "Applied Game Theory".

Deadline for manuscript submissions: 30 September 2024 | Viewed by 9222

Special Issue Editors

Prof. Dr. Marco A. Marini

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Guest Editor
Department of Social and Economic Sciences, Sapienza Università di Roma, 00185 Rome, Italy
Interests: microeconomics; game theory; industrial organization; public economics; development economics
Dr. Riccardo D. Saulle

E-Mail Website
Guest Editor
Department of Economics and Management, University of Padova, Padua, Italy
Interests: game theory and decision theory; economic modeling; economic theory
Dr. Giorgos Stamatopoulos

E-Mail Website
Guest Editor
Department of Economics, University of Crete, Rethymno, Greece
Interests: applied game theory; cooperative games with externalities

Special Issue Information

Dear Colleagues,

If one wants to list the scientific “revolutions” that economics went through in the last century, then game theory should definitely be ranked very high in this list. Furthermore, this is true for the impact game theory had, and still has, in industrial organization. It is not an exaggeration to say that its utilization caused a paradigm shift in the very nature of research in industrial organization. The development of new game-theoretic concepts and tools in recent decades and their adoption in the study of industrial economics have allowed researchers not only to tackle the traditional problems in the field but also to expand research in a very rich spectrum of directions.

This Special Issue aims to collect original, high-quality applications of game-theoretic methods to the broad field of industrial organization. A non-exhaustive list of these methods includes: dynamic and Stackelberg games, entry games, models with myopic, adaptive and farsighted players, behavioral games, cooperative and coalition formation games and network and information sharing games. Applications include, but are not limited to, collusion, horizontal and vertical differentiation, innovation, two-sided markets, markets with asymmetric information, vertical industries and monopolistic competition.

Prof. Dr. Marco A. Marini 
Dr. Riccardo D. Saulle
Dr. Giorgos Stamatopoulos
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Games is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • non-cooperative games
  • cooperative games
  • imperfect competition
  • asymmetric information
  • vertical markets
  • collusion
  • differentiation
  • innovation
  • two-sided markets

Published Papers (6 papers)

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Research

30 pages, 716 KiB  
Article
Equilibrium Selection in Hawk–Dove Games
by Mario Blázquez de Paz and Nikita Koptyug
Games 2024, 15(1), 2; https://doi.org/10.3390/g15010002 - 31 Dec 2023
Viewed by 1220
Abstract
We apply three equilibrium selection techniques to study which equilibrium is selected in a hawk–dove game with a multiplicity of equilibria. By using a uniform-price auction as an illustrative example, we find that when the demand in the auction is low or intermediate, [...] Read more.
We apply three equilibrium selection techniques to study which equilibrium is selected in a hawk–dove game with a multiplicity of equilibria. By using a uniform-price auction as an illustrative example, we find that when the demand in the auction is low or intermediate, the tracing procedure method of Harsanyi and Selten (1988) and the quantal response method of McKelvey and Palfrey (1998) select the same equilibrium. When the demand is high, the tracing procedure method does not select any equilibrium, but the quantal response method still selects the same equilibrium as when the demand is low or intermediate. The robustness to strategic uncertainty method of Andersson, Argenton and Weibull (2014) selects two of the multiple equilibria irrespective of the demand size. We also analyze the impact of an increase in the minimum bid allowed by the auctioneer in the equilibrium selection. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
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11 pages, 278 KiB  
Article
Duopoly and Endogenous Single Product Quality Strategies
by Amit Gayer
Games 2023, 14(4), 56; https://doi.org/10.3390/g14040056 - 15 Aug 2023
Viewed by 969
Abstract
This research paper investigates a duopolistic market characterized by vertical product differentiation. The study considers both product qualities and consumer preferences represented as one-dimensional intervals. The focus is on analyzing the equilibrium in a duopoly game with convex production costs. In this setting, [...] Read more.
This research paper investigates a duopolistic market characterized by vertical product differentiation. The study considers both product qualities and consumer preferences represented as one-dimensional intervals. The focus is on analyzing the equilibrium in a duopoly game with convex production costs. In this setting, each firm has the option to present a multi-product strategy consisting of quality–price pairs, and their profits are determined by the decisions made by consumers. The findings of the study reveal that, under typical consumer preference conditions, both firms tend to offer a single quality–price pair. Additionally, the market is shown to be fully served, and firm profits decrease as the index of product quality increases. A comparative analysis is also conducted with the case of a monopoly. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
8 pages, 262 KiB  
Article
Price and Quantity Competition under Vertical Pricing
by Debasmita Basak
Games 2023, 14(4), 53; https://doi.org/10.3390/g14040053 - 29 Jun 2023
Viewed by 1033
Abstract
We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output [...] Read more.
We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output and earns a higher profit than the quantity-setting firm when bargaining is decentralised. Additionally, both firms produce the same output, whereas the profit is higher under the price-setting firm than the quantity-setting firm when bargaining is centralised. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
8 pages, 278 KiB  
Article
Training, Abilities and the Structure of Teams
by Tobias Hiller
Games 2023, 14(3), 44; https://doi.org/10.3390/g14030044 - 26 May 2023
Cited by 1 | Viewed by 1086
Abstract
Training in firms has an effect on the productivity of employees who receive the training, and depending on the production technology, on the other employees as well. Meanwhile, changing the remuneration structure within a team can change the stability of a team. In [...] Read more.
Training in firms has an effect on the productivity of employees who receive the training, and depending on the production technology, on the other employees as well. Meanwhile, changing the remuneration structure within a team can change the stability of a team. In this paper, we apply the production games approach of cooperative game theory to analyze how training employees affects the stability of team structures and employee wages. Concretely, we apply coalition structures and the χ value. Our results are in line with the literature and numerous further research questions can be addressed based on our approach. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
14 pages, 1198 KiB  
Article
The Connection between Imported Inputs and Exports: The Importance of Strategic Interdependence
by Arijit Mukherjee and Yao Liu
Games 2023, 14(1), 6; https://doi.org/10.3390/g14010006 - 09 Jan 2023
Viewed by 1231
Abstract
Ignoring strategic interactions among final goods producers, the extant theoretical literature shows that lower costs of imported inputs increase the exports of the final goods using those inputs. Hence, it does not explain the empirically relevant positive relationship between the costs of imported [...] Read more.
Ignoring strategic interactions among final goods producers, the extant theoretical literature shows that lower costs of imported inputs increase the exports of the final goods using those inputs. Hence, it does not explain the empirically relevant positive relationship between the costs of imported inputs and the export of the final goods. We use a simple Cournot duopoly (i.e., duopoly quantity competition) with homogeneous products to show that if the exporters differ in input coefficients, lower costs of imported inputs may increase or decrease the exports of the final goods. Thus, we argue that strategic interdependence among the exporters can be an important factor for the positive relationship between lower costs of imported inputs and the export of the final goods. We further show that a lower cost of imported inputs may reduce the consumer surplus, total profits of the exporters, and world welfare. We also show the implications of a Bertrand duopoly (i.e., duopoly price competition) with horizontal product differentiation for our analysis. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
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16 pages, 334 KiB  
Article
Oligopoly Pricing: The Role of Firm Size and Number
by Iwan Bos and Marco A. Marini
Games 2023, 14(1), 3; https://doi.org/10.3390/g14010003 - 29 Dec 2022
Viewed by 2429
Abstract
This paper examines a homogeneous-good Bertrand–Edgeworth oligopoly model to explore the role of firm size and number in pricing. We consider the price impact of merger, break up, investment, divestment, entry and exit. A merger leads to higher prices only when it increases [...] Read more.
This paper examines a homogeneous-good Bertrand–Edgeworth oligopoly model to explore the role of firm size and number in pricing. We consider the price impact of merger, break up, investment, divestment, entry and exit. A merger leads to higher prices only when it increases the size of the largest seller and industry capacity is neither too big nor too small post-merger. Similarly, breaking up a firm only leads to lower prices when it concerns the biggest producer and aggregate capacity is within an intermediate range. Investment and entry (weakly) reduce prices, whereas divestment and exit yield (weakly) higher prices. Taken together, these findings suggest that size matters more than number in the determination of oligopoly prices. Full article
(This article belongs to the Special Issue Applications of Game Theory to Industrial Organization)
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