Luciano Andreozzi

Università degli Studi di Trento | UNITN · Dipartimento di Economia e Management

This paper discusses Ken Binmore’s contribution to the debate on other-regarding preferences with reference to his contributions on equilibrium selection in non-cooperative games. We first assess his claim that the experimental evidence in favor of different types of social preferences has been vastly exaggerated. Then, we compare Binmore’s contrib...

Social dilemmas are mixed-motive games. Although the players have a common interest in maintaining cooperation, each may try to obtain a larger payoff by cooperating less than the other. This phenomenon received increased attention after Press and Dyson discovered a class of strategies for the repeated prisoner’s dilemma (extortionate strategies) t...

Peters (2019a) discusses a compound lottery that allegedly reveals a weakness of the way uncertainty is modeled within economics. This note evaluates that example in the light of standard expected utility. I obtain two results. First, using a variant of Rabin (2000) calibration theorem, I show that the paradox Peters obtains only arises because he...

An often-replicated result in the experimental literature on social dilemmas is that a large share of subjects choose conditionally cooperative strategies. Cooperation generated by such choices is notoriously unstable, as individuals reduce their contributions to the public good in reaction to other subjects’ free-riding. This has led to the widely...

Under what conditions do sovereign governments agree to create a common policy institution? And what model of supranational policymaking may be preferable? To answer these questions, we introduce a policy game of two interdependent countries with reciprocal negative externalities created by shocks to a socially relevant variable. Depending on natio...

There is now wide agreement that under the pressure of the 2008 crisis serious flaws have emerged in the design of the European Economic and Monetary Union (EMU) as a supranational architecture with the overarching end to generate and distribute collective benefits from integration and "internalisation of externalisities" among highly interdependen...

Bargaining behavior occupies an important part in economics literature, or social sciences in general. Although there is an extensive simulation literature on social tradeoff in the Prisoner's Dilemma and the one-shot bargaining game, little has been done for the repeated bargaining game. Part of reason for this neglect is that, despite having a co...

In Democratic Justice and the Social Contract, Weale defends a contractarian theory of social justice following what he calls the ‘empirical method’, which consists in grounding ethics and politics on the observation of concrete examples of social contracts, rather than abstract speculations. In this paper, I will make three critical remarks. First...

The research presented here investigates the interaction between acute exercise, biological sex and risk-taking behavior. The study involved 20 amateur athletes (19-33 years old), 10 males and 10 females, who were asked to undergo subsequent experimental sessions designed to compare their risky behaviors on the Balloon Analogue Risk Task (BART) 34...

A freeze-out bond exchange offer occurs when a firm wants to replace an existing bond, issued with a covenant, with a new bond that does not have this kind of restriction. If the bondholders are not fully coordinated, the shareholders can make an unfair exchange offer to capture wealth from the bondholders. In this paper, we made two experiments ba...

We discuss the emergence of cooperation in repeated Trust Mini-Games played by finite automata. Contrary to a previous result obtained by Piccione and Rubinstein (1993), we first prove that this repeated game admits two Nash equilibria, a cooperative and a non-cooperative one. Second, we show that the cooperative equilibrium is the only (cyclically...

We study the process of equilibrium selection in games when players have social preferences of the type discussed, among others, by Rabin (1993) and Segal and Sobel (2007). To this end, we employ a standard noisy version of the best response dynamics. We obtain several results concerning some popular games such as the Prisoner's Dilemma and the Bat...

In a survey on corporate social responsibility (CSR) published in 2005, The Economist issued a series of articles that were sternly critical of the idea that firms should commit themselves to explicit codes of ethics. One of the main arguments, repeated on several occasions in the survey, is the familiar one based on the invisible hand, which was o...

A freeze-out bond exchange offer can occur when a firm wants to replace an exist- ing bond, issued with a covenant, with a new bond that does not have this type of restriction. If the bondholders are not fully coordinated, the shareholders can make the exchange offer unfair to capture wealth from the bondholders. We perform two experiments using th...

The Nash Demand Game (NDG) has been widely employed to model the emergence of moral norms such as property rights. We criticize this use because it neglects the important role played by incentives. Since in a NDG players are assumed to divide a windfall, there is no way to model the idea that expectations concerning the way in which the pie will be...

This paper addresses the emergence of cooperation in asymmetric pris- oners' dilemmas in which one player chooses after having observed the other player's choice (Trust Game). We use the finite automata approach with complexity costs to study the equilibria of the repeated version of this game. We show that there is a small set of automata that for...

The inspection game has been widely used as a model for crime deterrence. In this article, we shall present a broad review of the literature and an original result. The original result concerns the interaction between a single, long-run inspector and a population of short-run, boundedly rational would-be criminals. This approach gives rise to an op...

We examine whether the spread of an exporting strategy can be characterized as a diffusion process using a general framework that accounts for attrition and changes in the pool of potential adopters and allows the diffusion rate to vary according to firm and market characteristics. Our findings indicate that the diffusion of exporting is described...

The history of international agreements aimed at environmental protection offers a mix of successes and failures, with the latter being far more frequent than the former. The best known example is the Kyoto protocol: a treatise signed by over 160 countries to reduce emissions of gasses held responsible for green-house effect. This agreement is usua...

One of the many paradoxes of fashions is that consumers’ choices change rapidly and with an astonishing degree of synchronization. What is successful or socially acceptable in one period is considered the opposite in the next. This paradox has brought economists and other social scientists to conceive of fashions and fads as one of many forms of ir...

Hayek’s approach to cultural and institutional evolution has been frequently criticized because it is explicitly based on the controversial notion of (cultural) group selection. In this paper this criticism is rejected on the basis of recent works on biological and cultural evolution. The paper’s main contention is that Hayek employed group selecti...

Witt (Int. J. Ind. Organ. 15 (1997) 753) demonstrates that superior technological standards have smaller critical mass, so that they can easily displace inferior alternatives. This note builds on his model to show that the critical mass of a given technology depends upon its efficiency and its compatibility with the existing standard, and hence tha...

A paradox is a proposition in (alleged) contrast with common sense. All science is replete with paradoxes. Economics is not an exception. This paper is focused on two widely discussed paradoxes: the Mandeville paradox (and the associated idea of an 'invisible hand') and the Prisoners' Dilemma (with the allied literature on market failures). The mai...

Inspection games are 2x2 games in which one playermust decide whether to inspect the other player, who in turnmust decide whether to infringe a norm or a regulation.Inspection games have a single, mixed strategy Nashequilibrium, which has counter-intuitive comparative staticsproperties. This result has been used by Tsebelis (1989) andHoller (1992)...

The 2´2 inspection game has been frequently employed to model the problem of law enforcement. This game is notoriously troublesome, because (a) its unique Nash equilibrium is never strict and (b) by playing their maximin strategies players can secure the same payoff they get when both play their Nash equilibrium strategies. According to Holler (199...

Economists are so conditioned to identifying rational choice with separable preferences that we often call 'irrational' quite rational behavior that is the result of past experience. Gary Becker, Habits, Addiction and Traditions.