How profitable are strategic behaviors in a market?

Ning Chen; Xiaotie Deng; Jie Zhang

doi:10.1007/978-3-642-23719-5_10

How profitable are strategic behaviors in a market?

Ning Chen
, Xiaotie Deng
, Jie Zhang

Research output: Chapters, Conference Papers, Creative and Literary Works › RGC 32 - Refereed conference paper (with host publication) › peer-review

41 Citations (Scopus)

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. © 2011 Springer-Verlag Berlin Heidelberg.

Original language	English
Title of host publication	Algorithms, ESA 2011 - 19th Annual European Symposium, Proceedings
Pages	106-118
Volume	6942 LNCS
DOIs	https://doi.org/10.1007/978-3-642-23719-5_10
Publication status	Published - 2011
Externally published	Yes
Event	19th Annual European Symposium on Algorithms, ESA 2011 - Saarbrucken, Germany Duration: 5 Sept 2011 → 9 Sept 2011

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	6942 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	19th Annual European Symposium on Algorithms, ESA 2011
Place	Germany
City	Saarbrucken
Period	5/09/11 → 9/09/11

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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Cite this

Chen, N., Deng, X., & Zhang, J. (2011). How profitable are strategic behaviors in a market? In Algorithms, ESA 2011 - 19th Annual European Symposium, Proceedings (Vol. 6942 LNCS, pp. 106-118). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 6942 LNCS). https://doi.org/10.1007/978-3-642-23719-5_10

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title = "How profitable are strategic behaviors in a market?",

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. {\textcopyright} 2011 Springer-Verlag Berlin Heidelberg.",

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note = "Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].; 19th Annual European Symposium on Algorithms, ESA 2011 ; Conference date: 05-09-2011 Through 09-09-2011",

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doi = "10.1007/978-3-642-23719-5\_10",

language = "English",

isbn = "9783642237188",

volume = "6942 LNCS",

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Chen, N, Deng, X & Zhang, J 2011, How profitable are strategic behaviors in a market? in Algorithms, ESA 2011 - 19th Annual European Symposium, Proceedings. vol. 6942 LNCS, Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 6942 LNCS, pp. 106-118, 19th Annual European Symposium on Algorithms, ESA 2011, Saarbrucken, Germany, 5/09/11. https://doi.org/10.1007/978-3-642-23719-5_10

How profitable are strategic behaviors in a market? / Chen, Ning; Deng, Xiaotie; Zhang, Jie.
Algorithms, ESA 2011 - 19th Annual European Symposium, Proceedings. Vol. 6942 LNCS 2011. p. 106-118 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 6942 LNCS).

Research output: Chapters, Conference Papers, Creative and Literary Works › RGC 32 - Refereed conference paper (with host publication) › peer-review