How to Use Private Information in a Multi-person Zero-sum Game

Hiroyasu Yoneda, Gen Masumoto and Sobei H. Oda
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Hiroyasu Yoneda: Kyoto Sangyo University
Gen Masumoto: Kyoto Sangyo University
Sobei H. Oda: Kyoto Sangyo University

A chapter in Developments on Experimental Economics, 2007, pp 239-244 from Springer

Abstract: Abstract This paper describes how people play a zero sum game with different private information. Apparently more informed players earn more than less informed players do. What happens however if people buy and sell speculatively in the future market? Those who are better informed seem to have greater chance to earn money, while those who have no information may expect zero profit because they seem to have equal chance to make money (to buy a commodity whose price will increase or to sell a commodity whose price will decrease) and to lose money (to sell a commodity whose price will increase or to buy a commodity whose price will decrease). Yet the sum of all traders is zero. If the most informed player earns profit and the lest informed player expects zero profit, some modestly informed players must suffer loss.

Keywords: Income Distribution; Private Information; Reservation Price; Future Market; Information Level (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-540-68660-6_26

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DOI: 10.1007/978-3-540-68660-6_26

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