Aniol Llorente-Saguer

A Simple Mechanism for Resolving Conflict

In Conflict Resolution situations where two parties with opposed preferences need to make a number of decisions simultaneously, we propose a simple mechanism that endows agents with a certain number of votes that can be distributed freely across issues. This mechanism allows parties to trade off their voting power across issues and extract gains from differences in the intensities of their preferences. The appealing properties of such a mechanism may be negated by strategic interactions among individuals. We test its properties using controlled laboratory experiments. We observe that equilibrium play increases over time and truthful/honest play decreases over time. The subjects almost reach the welfare predicted by the theory even when their behaviour is far from equilibrium. The fact that deviations from equilibrium do not do much damage to its welfare properties is a further argument in favour of the use of this mechanism in the real world.

Pure strategy Nash equilibria in non-zero sum colonel Blotto games

We analyze a Colonel Blotto game in which opposing parties have differing relative intensities. In other words, the game is non-zero sum because colonels have asymmetric and heterogeneous battlefield valuations. We characterize the colonels’ payoffs that sustain a pure strategy equilibrium and present an algorithm that reaches the equilibrium actions (when they exist). Finally we show that the set of games with a pure strategy equilibria is non-empty.

Multicandidate elections: Aggregate uncertainty in the laboratory

The rational-voter model is often criticized on the grounds that two of its central predictions (the paradox of voting and Duvergers Law) are at odds with reality. Recent theoretical advances suggest that these empirically unsound predictions might be an artifact of an (arguably unrealistic) assumption: the absence of aggregate uncertainty about the distribution of preferences in the electorate. In this paper, we propose direct empirical evidence of the effect of aggregate uncertainty in multicandidate elections. Adopting a theory-based experimental approach, we explore whether aggregate uncertainty indeed favors the emergence of non-Duvergers law equilibria in plurality elections. Our experimental results support the main theoretical predictions: sincere voting is a predominant strategy under aggregate uncertainty, whereas without aggregate uncertainty, voters massively coordinate their votes behind one candidate, who wins almost surely.

The Role of Information in Different Bargaining Protocols

We analyze a bargaining protocol recently proposed in the literature vis-a-vis unconstrained negotiation. This new mechanism extracts “gains from trade” inherent in the differing valuation of two parties towards various issues where conflict exists. We assess the role of incomplete vs. complete information in the efficiency achieved by this new mechanism and by unconstrained negotiation. We find that unconstrained negotiation does best under a situation of complete information where the valuations of both bargaining parties are common knowledge. Instead, the newly proposed mechanism does best in a situation with incomplete information. The sources of inefficiencies in each of the two cases arise from the different strategic use of the available information.

Auction mechanisms and bidder collusion: Bribes, signals and selection

The theoretical literature on collusion in auctions suggests that the first-price mechanism can deter the formation of bidding rings. In equilibrium, collusive negotiations are either successful or are avoided altogether, hence such analysis neglects the effects of failed collusion attempts. In such contingencies, information revealed in the negotiation process is likely to affect the bidding behavior in firstprice (but not second-price) auctions. We test experimentally a setup in which collusion is possible, but negotiations often break down and information is revealed in an asymmetric way. The existing theoretical analysis of our setup predicts that the first-price mechanism deters collusion. In contrast, we find the same level of collusion in first-price and second-price auctions. Furthermore, failed collusion attempts distort the bidding behavior in the ensuing auction, leading to loss of efficiency and eliminating the revenue dominance typically observed in first-price auctions.

Equilibrium Selection in Sequential Games with Imperfect Information

Games with imperfect information often feature multiple equilibria, which depend on beliefs off the equilibrium path. Standard selection criteria such as passive beliefs, symmetric beliefs or wary beliefs rest on ad hoc restrictions on beliefs. We propose a new selection criterion that imposes no restrictions on beliefs: we select the action profile that is supported in equilibrium by the largest set of beliefs. We conduct experiments to test the predictive power of the existing and our novel selection criteria in two applications: a game of vertical multi-lateral contracting, and a game of electoral competition. We find that our selection criterion outperforms the other selection criteria.

Unanimous Rules in the Laboratory

We study the information aggregation properties of unanimous voting rules in the laboratory. In line with theoretical predictions, we find that majority rule with veto power dominates unanimity rule. We also find that the strategic voting model is a fairly good predictor of subject behavior. Finally, we exploit a framing effect to study how the presence of less sophisticated agents affects Vetos welfare properties.

Get Rid of Unanimity Rule: The Superiority of Majority Rules with Veto Power

We study unanimous decision making under incomplete information. We argue that unanimous decision rules are not all equivalent. We show that majority rules with veto power are (i) Pareto superior to commonly used unanimous rules and (ii) ex ante efficient in a broad class of situations.

The Power of Sunspots: An Experimental Analysis

Abstract In an experiment using a coordination game with extrinsic random signals (“sunspots”), we systematically vary the stochastic process generating these signals and measure how signals affect behavior. We find that sunspot equilibria emerge naturally with salient public signals. However, highly correlated private signals can also lead to sunspot-driven behavior, even when this is not an equilibrium. Private signals reduce the power of public signals as sunspot variables. The higher the correlation of extrinsic signals and the more easily they can be aggregated, the more powerful these signals are in distracting actions from the action that minimizes strategic uncertainty.

Does Political Representation through Parties Decrease Voters' Acceptance of Decisions?

Are decisions by political parties more or less accepted than direct-democratic decisions? The literature on parties as brand names or labels suggests that the existence of political parties lowers information and transaction costs of voters by providing ideological packages. Building on this important argument, we posit that this informational rationale for parties is not universally applicable and is contingent on the context of the decision that is made. Intermediary political decision-making institutions may impose additional costs on voters in situations where the decision is perceived to be personally important to the individual voter. We conduct an experimental online vignette study to substantiate these claims. The results imply that a combination of representative democracy and direct democracy, conditional on the distribution of issue importance among the electorate, is optimal with regard to acceptance of a decision.