@inproceedings{2831, abstract = {{We consider a market where final products or services are compositions of a number of basic services. Users are asked to evaluate the quality of the composed product after purchase. The quality of the basic service influences the performance of the composed services but cannot be observed directly. The question we pose is whether it is possible to use user evaluations on composed services to assess the quality of basic services. We discuss how to combine aggregation of evaluations across users and disaggregation of information on composed services to derive valuations for the single components. As a solution we propose to use the (weighted) average as aggregation device in connection with the Shapley value as disaggregation method, since this combination fulfills natural requirements in our context. In addition, we address some occurring computational issues: We give an approximate solution concept using only a limited number of evaluations which guarantees nearly optimal results with reduced running time. Lastly, we show that a slightly modified Shapley value and the weighted average are still applicable if the evaluation profiles are incomplete.}}, author = {{Feldotto, Matthias and Haake, Claus-Jochen and Skopalik, Alexander and Stroh-Maraun, Nadja}}, booktitle = {{Proceedings of the 13th Workshop on Economics of Networks, Systems and Computation (NetEcon 2018)}}, isbn = {{978-1-4503-5916-0}}, location = {{Irvine, California, USA}}, pages = {{5:1--5:6}}, title = {{{Disaggregating User Evaluations Using the Shapley Value}}}, doi = {{10.1145/3230654.3230659}}, year = {{2018}}, } @article{2566, abstract = {{We show that the Boston school choice mechanism (BM), the student proposing deferred acceptance algorithm (DA) and the top trading cycles algorithm (TTC) generate the same outcome when the colleges’ priorities are modified according to students’ preferences in a “first preferences first” manner. This outcome coincides with the BM outcome under original priorities. As a result, the DA and TTC mechanism that are non-manipulable under original priorities become vulnerable to strategic behavior.}}, author = {{Haake, Claus-Jochen and Stroh-Maraun, Nadja}}, journal = {{Economics Letters}}, pages = {{39 -- 41}}, publisher = {{Elsevier}}, title = {{{Outcome Equivalence in School Choice with Reciprocal Preferences}}}, doi = {{10.1016/j.econlet.2018.05.033}}, volume = {{170}}, year = {{2018}}, } @techreport{2933, abstract = {{We establish axioms under which a bargaining solution can be found by the maximization of the CES function and is unique up to specification of the distribution and elasticity parameters. This solution is referred to as the CES solution which includes the NASH and egalitarian solutions as special cases. Next, we consider a normalization of the CES function and establish axioms, under which a bargaining solution can be found by the maximization of the normalized CES and is unique up to the specifications of the distribution and its substitution parameters. We refer to this solution as the normalized CES solution, which includes the Nash and Kalai-Smorodinsky solutions as special cases. Our paper contributes to bargaining theory by establishing unified characterizations of existing as well as a great variety of new bargaining solutions.}}, author = {{Haake, Claus-Jochen and Qin, Cheng-Zhong}}, keywords = {{Bargaining problem, CES Function, Normalized CES Function, Nash solution, Kalai-Smorodinsky Solution, Egalitarian Solution.}}, publisher = {{CIE Working Paper Series, Paderborn University}}, title = {{{On unification of solutions to the bargaining problem}}}, volume = {{113}}, year = {{2018}}, } @inbook{3098, abstract = {{One of the fundamental problems in applications of methods and results from mechanism design and implementation theory is the effective enforcement of theoretically established equilibria by which social choice rules are implemented. Hurwicz (2008) and Myerson (2009) introduce different concepts of formalizing enforcement of institutional rules via the introduction of legal and illegal games. In this note the relation of their concepts with that of a social system defined inDebreu (1952) is analyzed and its potential of being instrumental for modelling institution design is discussed. The existence proof for such a system, also known as generalized game or abstract economy had been the basis for the existence proof of a competitive equilibrium of an economy.}}, author = {{Trockel, Walter and Haake, Claus-Jochen}}, booktitle = {{Studies in Economic Design}}, editor = {{Laslier, Jean-Francois and Moulin, Herve and Sanver, Remzi and Zwicker, William}}, issn = {{2510-3970}}, publisher = {{Springer}}, title = {{{Thoughts on Social Design}}}, volume = {{(n.d.)}}, year = {{2018}}, } @article{4564, abstract = {{ In our model two divisions negotiate over type-dependent contracts to determine an intrafirm transfer price for an intermediate product. Since the upstream division's (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information, we formally consider cooperative bargaining problems under incomplete information. This means that the two divisions consider allocations of expected utility generated by mechanisms that satisfy (interim) individual rationality, incentive compatibility and/or ex post efficiency. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether or not incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine fair transfer payments and transfer quantities. In particular, the generalized Nash bargaining solution tries to balance divisional profits, while incentive constraints are still in place. In that sense a fair profit division is generated. Furthermore, by means of illustrative examples we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the models existing in the literature. We demonstrate that there is a tradeoff between ex post efficiency and fairness. }}, author = {{Haake, Claus-Jochen and Recker, Sonja}}, journal = {{Group Decision and Negotiation}}, number = {{6}}, pages = {{905--932}}, publisher = {{Springer}}, title = {{{The Generalized Nash Bargaining Solution for Transfer Price Negotiations under Incomplete Information}}}, doi = {{10.1007/s10726-018-9592-8}}, volume = {{27}}, year = {{2018}}, } @article{5330, abstract = {{In Internet transactions, customers and service providers often interact once and anonymously. To prevent deceptive behavior a reputation system is particularly important to reduce information asymmetries about the quality of the offered product or service. In this study we examine the effectiveness of a reputation system to reduce information asymmetries when customers may make mistakes in judging the provided service quality. In our model, a service provider makes strategic quality choices and short-lived customers are asked to evaluate the observed quality by providing ratings to a reputation system. The customer is not able to always evaluate the service quality correctly and possibly submits an erroneous rating according to a predefined probability. Considering reputation profiles of the last three sales, within the theoretical model we derive that the service provider’s dichotomous quality decisions are independent of the reputation profile and depend only on the probabilities of receiving positive and negative ratings when providing low or high quality. Thus, a service provider optimally either maintains a good reputation or completely refrains from any reputation building process. However, when mapping our theoretical model to an experimental design we find that a significant share of subjects in the role of the service provider deviates from optimal behavior and chooses actions which are conditional on the current reputation profile. With respect to these individual quality choices we see that subjects use milking strategies which means that they exploit a good reputation. In particular, if the sales price is high, low quality is delivered until the price drops below a certain threshold, and then high quality is chosen until the price increases again.}}, author = {{Mir Djawadi, Behnud and Fahr, Rene and Haake, Claus-Jochen and Recker, Sonja}}, issn = {{1932-6203}}, journal = {{PLoS ONE}}, number = {{11}}, publisher = {{Public Library of Science}}, title = {{{Maintaining vs. Milking Good Reputation when Customer Feedback is Inaccurate}}}, doi = {{10.1371/journal.pone.0207172}}, volume = {{13}}, year = {{2018}}, } @article{2527, author = {{Gries, Thomas and Haake, Claus-Jochen}}, issn = {{1554-8597}}, journal = {{Peace Economics, Peace Science and Public Policy}}, number = {{4}}, pages = {{377 -- 384}}, publisher = {{Walter de Gruyter GmbH}}, title = {{{Towards an Economic Theory of Destabilization War}}}, doi = {{10.1515/peps-2016-0042}}, volume = {{22}}, year = {{2016}}, } @techreport{8836, abstract = {{While Islamic State is the most present example, it is a fact that in many places around the globe, throughout history initially small groups have tried to challenge and destabilize or even overthrow governments by means of terrorist and guerrilla strategies. Therefore, we answer two questions. Why does a small group of insurgents believe it can overthrow the government by turning violent, even if the government is clearly superior? And how does a conflict develop into terrorism, a guerilla war, or a major conventional civil war, or is resolved peacefully? We develop a formal model for rebels and government and derive optimal choices. Further, we focus on three elements as important ingredients of a "destabilization war". All three of these - large random events, time preference (which we relate to ideology), and choice of duration of fight - are rarely considered in formal conflict theory. We can answer the above two questions using game theory analysis. First, insurgents rise up because they hope to destabilize through permanent challenging attacks. In this context, large randomness is an important ally of rebels. While each individual attack may have a low impact, at some point a large random event could lead to success. Hence, the duration of activities is a constitutive element of this kind of armed conflict. Patience (low time preference), which may reflect rebels' degree of ideological motivation, is crucial. Second, the mode of warfare or the conflict resolutions that develop are generally path-dependent and conditioned on the full set of options (including compromise). Various conditions (level of funding, ease of recruitment, access to weapons) influence different modes of warfare or a peaceful compromise in a complex way.}}, author = {{Gries, Thomas and Haake, Claus-Jochen}}, keywords = {{terrorism, civil war, conflict duration, game theory, stochastic process, ideology}}, title = {{{An Economic Theory of 'Destabilization War'}}}, volume = {{95}}, year = {{2016}}, } @techreport{249, abstract = {{We analyze the stability of networks when two intermediaries strategically form costly links to customers. We interpret these links as customer relationships that enable trade to sell a product. Equilibrium prices and equilibrium quantities on the output as well as on the input market are determined endogenously for a given network of customer relationships. We investigate in how far the substitutability of the intermediaries' products and the costs of link formation influence the intermediaries' equilibrium profits and thus have an impact on the incentives to strategically form relationships to customers. For networks with three customers we characterize locally stable networks, in particular existence is guaranteed for any degree of substitutability. Moreover for the special cases of perfect complements, independent products and perfect substitutes, local stability coincides with the stronger concept of Nash stability. Additionally, for networks with n customers we analyze stability regions for selected networks and determine their limits when n goes to infinity. It turns out that the shape of the stability regions for those networks does not significantly change compared to a setting with a small number of customers. }}, author = {{Brangewitz, Sonja and Haake, Claus-Jochen and Möhlmeier, Philipp}}, publisher = {{Universität Paderborn}}, title = {{{Strategic Formation of Customer Relationship Networks}}}, volume = {{91}}, year = {{2015}}, } @inproceedings{382, abstract = {{This paper explores how cloud provider competition influences instance pricing in an IaaS (Infrastructure-as-a-Service) market. When reserved instance pricing includes an on-demand price component in addition to a reservation fee (two-part tariffs), different providers might offer different price combinations, where the client’s choice depends on its load profile. We investigate a duopoly of providers and analyze stable market prices in two-part tariffs. Further, we study offers that allow a specified amount of included usage (three-part tariffs). Neither two-part nor three-part tariffs produce an equilibrium market outcome other than a service pricing that equals production cost, i.e., complex price structures do not significantly affect the results from ordinary Bertrand competition.}}, author = {{Künsemöller, Jörn and Brangewitz, Sonja and Karl, Holger and Haake, Claus-Jochen}}, booktitle = {{Proceedings of the 2014 IEEE International Conference on Services Computing (SCC)}}, pages = {{203--210}}, title = {{{Provider Competition in Infrastructure-as-a-Service}}}, doi = {{10.1109/SCC.2014.35}}, year = {{2014}}, } @techreport{5146, abstract = {{In this paper, we analyze a model in which two divisions negotiate over an intrafirm transfer price for an intermediate product. Formally, we consider bargaining problems under incomplete information, since the upstream division’s (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine transfer payments and transfer probabilities. Furthermore, we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the existing literature for negotiated transfer pricing under incomplete information. In particular, we focus on the models presented in Wagenhofer (1994).}}, author = {{Brangewitz, Sonja and Haake, Claus-Jochen}}, keywords = {{Transfer Pricing, Negotiation, Generalized Nash Bargaining Solution, Incomplete Information}}, publisher = {{CIE Working Paper Series, Paderborn University}}, title = {{{Cooperative Transfer Price Negotiations under Incomplete Information}}}, volume = {{64}}, year = {{2013}}, } @article{2519, author = {{Haake, Claus-Jochen and Martini, Jan Thomas}}, issn = {{0926-2644}}, journal = {{Group Decision and Negotiation}}, number = {{4}}, pages = {{657--680}}, publisher = {{Springer Nature}}, title = {{{Negotiating Transfer Prices}}}, doi = {{10.1007/s10726-012-9286-6}}, volume = {{22}}, year = {{2012}}, } @article{2521, author = {{Haake, Claus-Jochen and Krieger, Tim and Minter, Steffen}}, issn = {{1612-4804}}, journal = {{International Economics and Economic Policy}}, number = {{4}}, pages = {{583--612}}, publisher = {{Springer Nature}}, title = {{{On the institutional design of burden sharing when financing external border enforcement in the EU}}}, doi = {{10.1007/s10368-012-0226-3}}, volume = {{10}}, year = {{2012}}, } @article{2512, abstract = {{In this paper we introduce the concept of an overall power function that is meant to combine two sources of a party’s power in a parliament. The first source is based on the possibilities for the party to be part of a majority coalition and it is typically modeled using a cooperative simple game. The second source takes into account parties’ asymmetries outside the cooperative game and it is displayed by a vector of exogenously given weights. We adopt a normative point of view and provide an axiomatic characterization of a specific overall power function, in which the weights enter in a proportional fashion.}}, author = {{Dimitrov, Dinko and Haake, Claus-Jochen}}, issn = {{1742-7355}}, journal = {{International Journal of Economic Theory}}, number = {{2}}, pages = {{189--200}}, publisher = {{Wiley-Blackwell}}, title = {{{Proportionality and the power of unequal parties}}}, doi = {{10.1111/j.1742-7363.2011.00158.x}}, volume = {{7}}, year = {{2011}}, } @article{2510, author = {{Haake, Claus-Jochen and Klaus, Bettina}}, issn = {{0040-5833}}, journal = {{Theory and Decision}}, number = {{4}}, pages = {{537--554}}, publisher = {{Springer Nature}}, title = {{{Stability and Nash implementation in matching markets with couples}}}, doi = {{10.1007/s11238-008-9122-2}}, volume = {{69}}, year = {{2010}}, } @article{2508, author = {{Haake, Claus-Jochen and Klaus, Bettina}}, issn = {{0938-2259}}, journal = {{Economic Theory}}, number = {{3}}, pages = {{393--410}}, publisher = {{Springer Nature}}, title = {{{Monotonicity and Nash implementation in matching markets with contracts}}}, doi = {{10.1007/s00199-008-0399-8}}, volume = {{41}}, year = {{2009}}, } @article{2531, abstract = {{We discuss a model, in which two agents may distribute finitely many objects among themselves. The conflict is resolved by means of a market procedure. Depending on the specifications, this procedure serves to achieve bargaining solutions such as the discrete Raiffa solution, the Kalai-Smorodinsky solution and the Perles-Maschler solution. The latter is axiomatized using the superadditivity axiom, which in the present context is readily interpreted as resolving a specific source of conflict potential.}}, author = {{Haake, Claus-Jochen}}, issn = {{0219-1989}}, journal = {{International Game Theory Review}}, number = {{01}}, pages = {{15--32}}, publisher = {{World Scientific Pub Co Pte Lt}}, title = {{{DIVIDING BY DEMANDING: OBJECT DIVISION THROUGH MARKET PROCEDURES}}}, doi = {{10.1142/s0219198909002121}}, volume = {{11}}, year = {{2009}}, } @article{2502, author = {{Dimitrov, Dinko and Haake, Claus-Jochen}}, issn = {{0899-8256}}, journal = {{Games and Economic Behavior}}, number = {{2}}, pages = {{460--475}}, publisher = {{Elsevier BV}}, title = {{{Stable governments and the semistrict core}}}, doi = {{10.1016/j.geb.2007.05.003}}, volume = {{62}}, year = {{2008}}, } @article{2503, author = {{Haake, Claus-Jochen and Kashiwada, Akemi and Su, Francis Edward}}, issn = {{0303-6812}}, journal = {{Journal of Mathematical Biology}}, number = {{4}}, pages = {{479--497}}, publisher = {{Springer Nature}}, title = {{{The Shapley value of phylogenetic trees}}}, doi = {{10.1007/s00285-007-0126-2}}, volume = {{56}}, year = {{2008}}, } @article{2506, author = {{Haake, Claus-Jochen}}, issn = {{0165-4896}}, journal = {{Mathematical Social Sciences}}, number = {{2}}, pages = {{177--187}}, publisher = {{Elsevier BV}}, title = {{{Two support results for the Kalai–Smorodinsky solution in small object division markets}}}, doi = {{10.1016/j.mathsocsci.2008.09.004}}, volume = {{57}}, year = {{2008}}, }