Breitmoser, Yves and Bolle, Friedel and Otto, Philipp E. (2012): The core with random utility and interdependent preferences: Theory and experimental evidence.
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Abstract
Experimental analyses of ShapleyShubik assignment games revealed that the core prediction is biased. The competing hypotheses are that subjects either have interdependent preferences or a limited understanding of outcomes in alternative matches. To evaluate these hypotheses econometrically, we introduce core concepts with random utility perturbations. The 'logit core' converges to a uniform distribution on the original core as noise disappears. With noise, it captures the nonuniform distribution of observations inside and outside the core, and contrary to regression, it predicts robustly outofsample. The logit core thus constitutes a conceptual basis for econometric analyses of assignment problems, and by capturing the whole distribution of outcomes, it allows us to extract all information by maximum likelihood methods. Using this approach, we then show that the core's prediction bias results from overstating the subjects' grasp of outcomes in alternative matches, while social preferences are only of minor relevance.
Item Type:  MPRA Paper 

Original Title:  The core with random utility and interdependent preferences: Theory and experimental evidence 
Language:  English 
Keywords:  cooperative game, core, random utility, social preferences, laboratory experiment, descriptive adequacy, predictive adequacy 
Subjects:  C  Mathematical and Quantitative Methods > C7  Game Theory and Bargaining Theory > C71  Cooperative Games C  Mathematical and Quantitative Methods > C9  Design of Experiments > C90  General D  Microeconomics > D6  Welfare Economics > D64  Altruism ; Philanthropy 
Item ID:  42819 
Depositing User:  Yves Breitmoser 
Date Deposited:  24 Nov 2012 17:49 
Last Modified:  22 Feb 2016 15:10 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/42819 
Available Versions of this Item

A positive theory of cooperative games: The logit core and its variants. (deposited 20 Aug 2011 16:55)
 The core with random utility and interdependent preferences: Theory and experimental evidence. (deposited 24 Nov 2012 17:49) [Currently Displayed]