Open AccessArticle
Polarization and Segregation through Conformity Pressure and Voluntary Migration: Simulation Analysis of Co-Evolutionary Dynamics
Games 2017, 8(4), 51; doi:10.3390/g8040051 -
Abstract
While conformity pressures people to assimilate in a community, an individual occasionally migrates among communities when the individual feels discomfort. These two factors cause segregation and cultural diversity within communities in the society. By embedding a migration dynamic into Kuran and Sandholm’s model
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While conformity pressures people to assimilate in a community, an individual occasionally migrates among communities when the individual feels discomfort. These two factors cause segregation and cultural diversity within communities in the society. By embedding a migration dynamic into Kuran and Sandholm’s model (2008) of preference evolution, we build an agent-based model to see how the variance of preferences in the entire society quantitatively changes over time. We find from the Monte-Carlo simulations that, while preferences assimilate within a community, self-selected migrations enlarge the diversity of preferences over communities in the society. We further study how the arrival rate of migration opportunities and the degree of conformity pressures affect the variance of preferences. Full article
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Open AccessArticle
Contribution-Based Grouping under Noise
Games 2017, 8(4), 50; doi:10.3390/g8040050 -
Abstract
Many real-world mechanisms are “noisy” or “fuzzy”, that is the institutions in place to implement them operate with non-negligible degrees of imprecision and error. This observation raises the more general question of whether mechanisms that work in theory are also robust to more
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Many real-world mechanisms are “noisy” or “fuzzy”, that is the institutions in place to implement them operate with non-negligible degrees of imprecision and error. This observation raises the more general question of whether mechanisms that work in theory are also robust to more realistic assumptions such as noise. In this paper, in the context of voluntary contribution games, we focus on a mechanism known as “contribution-based competitive grouping”. First, we analyze how the mechanism works under noise and what happens when other assumptions such as population homogeneity are relaxed. Second, we investigate the welfare properties of the mechanism, interpreting noise as a policy instrument, and we use logit dynamic simulations to formulate mechanism design recommendations. Full article
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Open AccessArticle
Computing Human-Understandable Strategies: Deducing Fundamental Rules of Poker Strategy
Games 2017, 8(4), 49; doi:10.3390/g8040049 -
Abstract
Algorithms for equilibrium computation generally make no attempt to ensure that the computed strategies are understandable by humans. For instance the strategies for the strongest poker agents are represented as massive binary files. In many situations, we would like to compute strategies that
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Algorithms for equilibrium computation generally make no attempt to ensure that the computed strategies are understandable by humans. For instance the strategies for the strongest poker agents are represented as massive binary files. In many situations, we would like to compute strategies that can actually be implemented by humans, who may have computational limitations and may only be able to remember a small number of features or components of the strategies that have been computed. For example, a human poker player or military leader may not have access to large precomputed tables when making real-time strategic decisions. We study poker games where private information distributions can be arbitrary (i.e., players are dealt cards from different distributions, which depicts the phenomenon in large real poker games where at some points in the hand players have different distribution of hand strength by applying Bayes’ rule given the history of play in the hand thus far). We create a large training set of game instances and solutions, by randomly selecting the information probabilities, and present algorithms that learn from the training instances to perform well in games with unseen distributions. We are able to conclude several new fundamental rules about poker strategy that can be easily implemented by humans. Full article
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Open AccessArticle
Game Theoretic Interaction and Decision: A Quantum Analysis
Games 2017, 8(4), 48; doi:10.3390/g8040048 -
Abstract
An interaction system has a finite set of agents that interact pairwise, depending on the current state of the system. Symmetric decomposition of the matrix of interaction coefficients yields the representation of states by self-adjoint matrices and hence a spectral representation. As a
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An interaction system has a finite set of agents that interact pairwise, depending on the current state of the system. Symmetric decomposition of the matrix of interaction coefficients yields the representation of states by self-adjoint matrices and hence a spectral representation. As a result, cooperation systems, decision systems and quantum systems all become visible as manifestations of special interaction systems. The treatment of the theory is purely mathematical and does not require any special knowledge of physics. It is shown how standard notions in cooperative game theory arise naturally in this context. In particular, states of general interaction systems are seen to arise as linear superpositions of pure quantum states and Fourier transformation to become meaningful. Moreover, quantum games fall into this framework. Finally, a theory of Markov evolution of interaction states is presented that generalizes classical homogeneous Markov chains to the present context. Full article
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Open AccessArticle
Construction of Subgame-Perfect Mixed-Strategy Equilibria in Repeated Games
Games 2017, 8(4), 47; doi:10.3390/g8040047 -
Abstract
This paper examines how to construct subgame-perfect mixed-strategy equilibria in discounted repeated games with perfect monitoring. We introduce a relatively simple class of strategy profiles that are easy to compute and may give rise to a large set of equilibrium payoffs. These sets
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This paper examines how to construct subgame-perfect mixed-strategy equilibria in discounted repeated games with perfect monitoring. We introduce a relatively simple class of strategy profiles that are easy to compute and may give rise to a large set of equilibrium payoffs. These sets are called self-supporting sets, since the set itself provides the continuation payoffs that are required to support the equilibrium strategies. Moreover, the corresponding strategies are simple as the players face the same augmented game on each round but they play different mixed actions after each realized pure-action profile. We find that certain payoffs can be obtained in equilibrium with much lower discount factor values compared to pure strategies. The theory and the concepts are illustrated in 2 × 2 games. Full article
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Open AccessArticle
Shapley Value-Based Payment Calculation for Energy Exchange between Micro- and Utility Grids
Games 2017, 8(4), 45; doi:10.3390/g8040045 -
Abstract
In recent years, microgrids have developed as important parts of power systems and have provided affordable, reliable, and sustainable supplies of electricity. Each microgrid is managed as a single controllable entity with respect to the existing power system but demands for joint operation
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In recent years, microgrids have developed as important parts of power systems and have provided affordable, reliable, and sustainable supplies of electricity. Each microgrid is managed as a single controllable entity with respect to the existing power system but demands for joint operation and sharing the benefits between a microgrid and its hosting utility. This paper is focused on the joint operation of a microgrid and its hosting utility, which cooperatively minimize daily generation costs through energy exchange, and presents a payment calculation scheme for power transactions based on a fair allocation of reduced generation costs. To fairly compensate for energy exchange between the micro- and utility grids, we adopt the cooperative game theoretic solution concept of Shapley value. We design a case study for a fictitious interconnection model between the Mueller microgrid in Austin, Texas and the utility grid in Taiwan. Our case study shows that when compared to standalone generations, both the micro- and utility grids are better off when they collaborate in power exchange regardless of their individual contributions to the power exchange coalition. Full article
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Open AccessReview
Representations of Political Power Structures by Strategically Stable Game Forms: A Survey
Games 2017, 8(4), 46; doi:10.3390/g8040046 -
Abstract
We survey the results on representations of committees and constitutions by game forms that possess some kind of equilibrium strategies for each profile of preferences of the players. The survey is restricted to discrete models, that is, we deal with finitely many players
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We survey the results on representations of committees and constitutions by game forms that possess some kind of equilibrium strategies for each profile of preferences of the players. The survey is restricted to discrete models, that is, we deal with finitely many players and alternatives. No prior knowledge of social choice is assumed: As far as definitions are concerned, the paper is self-contained. Section 2 supplies the necessary general tools for the rest of the paper. Each definition is followed by a simple (but nontrivial) example. In Section 3 we give a complete account of representations of committees (proper and monotonic simple games), by exactly and strongly consistent social choice functions. We start with Peleg’s representations of weak games, and then provide a complete and detailed account of Holzman’s solution of the representation problem for simple games without veto players. In Section 4 we deal with representations of constitutions by game forms. Following Gärdenfors we model a constitution by a monotonic and superadditive effectivity function. We fully characterize the representations for three kinds of equilibrium: Nash equilibrium; acceptable equilibrium (Pareto optimal Nash equilibrium); and strong Nash equilibrium. We conclude in Section 5 with a report on two recent works on representations of constitutions under incomplete information. Full article
Open AccessArticle
Moral Entitlements and Aspiration Formation in Asymmetric Bargaining: Experimental Evidence from Germany and China
Games 2017, 8(4), 44; doi:10.3390/g8040044 -
Abstract
Using a unique experimental data set, we investigate how asymmetric legal rights shape bargainers’ aspiration levels through moral entitlements derived from equity norms and number prominence. Aspiration formation is typically hard to observe in real life. Our study involves 15 negotiations from Germany
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Using a unique experimental data set, we investigate how asymmetric legal rights shape bargainers’ aspiration levels through moral entitlements derived from equity norms and number prominence. Aspiration formation is typically hard to observe in real life. Our study involves 15 negotiations from Germany and China. Over the course of the negotiation, bargainers discuss the distribution of an amount of money by alternating offers until they consent or break off. Legal rights are randomly assigned by asymmetric outside options. We videotape and code the in-group discussions. In total, verbal data from 30 groups, 1100 pages of transcripts, and 65 h of discussions are content-analyzed. Our main finding is that strong groups derive and defend moral entitlements from equity concerns with regard to their outside options. They strive for equitable but unequal distributions (e.g., proportional split and split the difference). Moral entitlements materialize in the recorded aspiration levels and final payoffs, which exceed the equal split. By contrast, weak groups aim at equality. Over the course of the negotiation, equity tends to lose, while the prominence of round numbers gains importance. Similarities between the subject pools are found in that equity and prominence are both decisive for the formation of aspiration levels. Chinese negotiations are characterized by long periods of stagnation, only minimal concessions, and the communication of false goals. By contrast, Germans steadily reduce their goals and make concessions. Full article
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Open AccessArticle
Social Preferences and Context Sensitivity
Games 2017, 8(4), 43; doi:10.3390/g8040043 -
Abstract
This paper is a partial review of the literature on ‘social preferences'. There are empirical findings that convincingly demonstrate the existence of social preferences, but there are also studies that indicate their fragility. So how robust are social preferences, and how exactly are
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This paper is a partial review of the literature on ‘social preferences'. There are empirical findings that convincingly demonstrate the existence of social preferences, but there are also studies that indicate their fragility. So how robust are social preferences, and how exactly are they context dependent? One of the most promising insights from the literature, in my view, is an equilibrium explanation of mutually referring conditional social preferences and expectations. I use this concept of equilibrium, summarized by means of a figure, to discuss a range of empirical studies. Where appropriate, I also briefly discuss a couple of insights from the (mostly parallel) evolutionary literature about cooperation. A concrete case of the Orma in Kenya will be used as a motivating example in the beginning. Full article
Open AccessArticle
Instability of Mixed Nash Equilibria in Generalised Hawk-Dove Game: A Project Conflict Management Scenario
Games 2017, 8(4), 42; doi:10.3390/g8040042 -
Abstract
This paper generalises the Hawk-Dove evolutionary game by introducing cost sharing ratios for both players, and applies the generalised Hawk-Dove model to conflict management in projects through investigating the stability of Nash equilibria. A model with clashing interests between a project owner and
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This paper generalises the Hawk-Dove evolutionary game by introducing cost sharing ratios for both players, and applies the generalised Hawk-Dove model to conflict management in projects through investigating the stability of Nash equilibria. A model with clashing interests between a project owner and a contractor is considered to derive their strategy adaptation given the cost sharing ratios. As expected, the pure Nash equilibria are shown to be dominantly stable while the mixed strategy equilibrium is observed to be unstable, across the range of considered cost sharing ratios. In addition, simulations are conducted on the strategy adaptation and stability of the equilibria under noisy and latent conditions. The obtained results can be used by project managers in optimising their strategy in practice. Full article
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Open AccessFeature PaperArticle
Towards a Fair Distribution Mechanism for Asylum
Games 2017, 8(4), 41; doi:10.3390/g8040041 -
Abstract
It has been suggested that the distribution of refugees over host countries can be made more fair or efficient if policy makers take into account not only numbers of refugees to be distributed but also the goodness of the matches between refugees and
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It has been suggested that the distribution of refugees over host countries can be made more fair or efficient if policy makers take into account not only numbers of refugees to be distributed but also the goodness of the matches between refugees and their possible host countries. There are different ways to design distribution mechanisms that incorporate this practice, which opens up a space for normative considerations. In particular, if the mechanism takes countries’ or refugees’ preferences into account, there may be trade-offs between satisfying their preferences and the number of refugees distributed. This article argues that, in such cases, it is not a reasonable policy to satisfy preferences. Moreover, conditions are given which, if satisfied, prevent the trade-off from occurring. Finally, it is argued that countries should not express preferences over refugees, but rather that priorities for refugees should be imposed, and that fairness beats efficiency in the context of distributing asylum. The framework of matching theory is used to make the arguments precise, but the results are general and relevant for other distribution mechanisms such as the relocations currently in effect in the European Union. Full article
Open AccessArticle
Vector Games with Potential Function
Games 2017, 8(4), 40; doi:10.3390/g8040040 -
Abstract
The theory of non cooperative games with potential function was introduced by Monderer and Shapley in 1996. Such games have interesting properties, among which is the existence of equilibria in pure strategies. The paper by Monderer and Shapley has inspired many game theory
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The theory of non cooperative games with potential function was introduced by Monderer and Shapley in 1996. Such games have interesting properties, among which is the existence of equilibria in pure strategies. The paper by Monderer and Shapley has inspired many game theory researchers. In the present paper, many classes of multiobjective games with potential functions are studied. The notions of generalized, best-reply and Pareto potential games are introduced in a multicriteria setting. Some properties and Pareto equilibria are investigated. Full article
Open AccessCommunication
On Adverse Effects of Consumers’ Attaching Greater Importance to Firms’ Ethical Conduct
Games 2017, 8(3), 39; doi:10.3390/g8030039 -
Abstract
Consumers increasingly care about firms’ ethical conduct (e.g., labor and environmental practices) when making their consumption choices. This note presents a simple framework to highlight the possibility that this development may induce a less desirable production technology choice and bring about lower market
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Consumers increasingly care about firms’ ethical conduct (e.g., labor and environmental practices) when making their consumption choices. This note presents a simple framework to highlight the possibility that this development may induce a less desirable production technology choice and bring about lower market transparency. When faced with consumers’ greater moral concerns, more firms may choose an undesirable mode of production and shroud information about it. Full article
Open AccessFeature PaperArticle
Strategic Behavior of Moralists and Altruists
Games 2017, 8(3), 38; doi:10.3390/g8030038 -
Abstract
Does altruism and morality lead to socially better outcomes in strategic interactions than selfishness? We shed some light on this complex and non-trivial issue by examining a few canonical strategic interactions played by egoists, altruists and moralists. By altruists, we mean people who
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Does altruism and morality lead to socially better outcomes in strategic interactions than selfishness? We shed some light on this complex and non-trivial issue by examining a few canonical strategic interactions played by egoists, altruists and moralists. By altruists, we mean people who do not only care about their own material payoffs but also about those to others, and, by a moralist, we mean someone who cares about own material payoff and also about what would be his or her material payoff if others were to act like himself or herself. It turns out that both altruism and morality may improve or worsen equilibrium outcomes, depending on the nature of the game. Not surprisingly, both altruism and morality improve the outcomes in standard public goods games. In infinitely repeated games, however, both altruism and morality may diminish the prospects of cooperation, and to different degrees. In coordination games, morality can eliminate socially inefficient equilibria while altruism cannot. Full article
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Open AccessFeature PaperArticle
Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?
Games 2017, 8(3), 37; doi:10.3390/g8030037 -
Abstract
This paper studies incentives provision when agents are characterized either by homo moralis preferences, i.e., their utility is represented by a convex combination of selfish preferences and Kantian morality, or by altruism. In a moral hazard in a team setting with two agents
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This paper studies incentives provision when agents are characterized either by homo moralis preferences, i.e., their utility is represented by a convex combination of selfish preferences and Kantian morality, or by altruism. In a moral hazard in a team setting with two agents whose efforts affect output stochastically, I demonstrate that the power of extrinsic incentives decreases with the degrees of morality and altruism displayed by the agents, thus leading to increased profits for the principal. I also show that a team of moral agents will only be preferred if the production technology exhibits decreasing returns to efforts; the probability of a high realization of output conditional on both agents exerting effort is sufficiently high; and either the outside option for the agents is zero or the degree of morality is sufficiently low. Full article
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Open AccessArticle
Dual-Process Reasoning in Charitable Giving: Learning from Non-Results
Games 2017, 8(3), 36; doi:10.3390/g8030036 -
Abstract
To identify dual-process reasoning in giving, we exposed experimental participants making a charitable donation to vivid images of the charity’s beneficiaries in order to stimulate affect. We hypothesized that the effect of an affective manipulation on giving would be larger when we simultaneously
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To identify dual-process reasoning in giving, we exposed experimental participants making a charitable donation to vivid images of the charity’s beneficiaries in order to stimulate affect. We hypothesized that the effect of an affective manipulation on giving would be larger when we simultaneously put the subjects under cognitive load using a numerical recall task. Independent treatment checks reveal opposite responses in men and women and cast some doubt on the reliability of our mainstream treatment manipulations and assessment tools. We find no evidence for dual-process decision-making, even among women, whose responses to the manipulations conformed most to our expectations. These results highlight the need for caution in the use of these common manipulations, the importance of independent manipulation checks, and the limitations of dual-process models for understanding altruistic behavior. Full article
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Open AccessArticle
Cooperation in Public Goods Games: Stay, But Not for Too Long
Games 2017, 8(3), 35; doi:10.3390/g8030035 -
Abstract
Cooperation in repeated public goods game is hardly achieved, unless contingent behavior is present. Surely, if mechanisms promoting positive assortment between cooperators are present, then cooperators may beat defectors, because cooperators would collect greater payoffs. In the context of evolutionary game theory, individuals
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Cooperation in repeated public goods game is hardly achieved, unless contingent behavior is present. Surely, if mechanisms promoting positive assortment between cooperators are present, then cooperators may beat defectors, because cooperators would collect greater payoffs. In the context of evolutionary game theory, individuals that always cooperate cannot win the competition against defectors in well-mixed populations. Here, we study the evolution of a population where fitness is obtained in repeated public goods games and players have a fixed probability of playing the next round. As a result, the group size decreases during the game. The population is well-mixed and there are only two available strategies: always cooperate (ALLC) or always defect (ALLD). Through numerical calculation and analytical approximations we show that cooperation can emerge if the players stay playing the game, but not for too long. The essential mechanism is the interaction between the transition from strong to weak altruism, as the group size decreases, and the existence of an upper limit to the number of rounds representing limited time availability. Full article
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Open AccessArticle
The Impact of Previous Action on Bargaining—An Experiment on the Emergence of Preferences for Fairness Norms
Games 2017, 8(3), 34; doi:10.3390/g8030034 -
Abstract
The communication of participants to identify an acceptable bargaining outcome in the Nash bargaining game is all about fairness norms. Participants introduce fairness norms which yield a better outcome for themselves in order to convince the other participant of their bargaining proposal. Typically,
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The communication of participants to identify an acceptable bargaining outcome in the Nash bargaining game is all about fairness norms. Participants introduce fairness norms which yield a better outcome for themselves in order to convince the other participant of their bargaining proposal. Typically, these fairness norms are in line with theoretical predictions, which support a wide variety of different but fair outcomes the participants can choose from. In this experiment, we play two treatments of the Nash bargaining game: in one treatment, the participants play a dictator game prior to bargaining, and in the other treatment they do not. We find that participants who have not played the dictator game intensively discuss the outcome of the game and come to solutions closer to the equal split of the pie the longer they chat. This effect vanishes as soon as the participants have previous experience from a dictator game: instead of chatting, they establish the fairness norm introduced in the dictator game. Remarkably, if the dictator is unfair in the dictator game, he also gets a higher share of the pie in the Nash bargaining game. Full article
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Open AccessCommunication
A Note on Disbelief in Others regarding Backward Induction
Games 2017, 8(3), 33; doi:10.3390/g8030033 -
Abstract
We present experimental results on the role of beliefs in the cognitive ability of others in a problem involving backward induction. Using a modified version of the so-called race game, our design allows the effects of a player’s own inability to perform backward
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We present experimental results on the role of beliefs in the cognitive ability of others in a problem involving backward induction. Using a modified version of the so-called race game, our design allows the effects of a player’s own inability to perform backward induction to be separated from the effects of her disbelief in the ability of others to do so. We find that behavior is responsive to the dependence on others who might fail in backward induction as well as information regarding their backward induction skills. Full article
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Open AccessArticle
Structural Holes in Social Networks with Exogenous Cliques
Games 2017, 8(3), 32; doi:10.3390/g8030032 -
Abstract
It has been empirically shown that structural holes in social networks enable potential large benefits to those individuals who bridge them (Burt, 2004). The work in Goyal and Vega-Redondo (2007) shows that the large payoff differentials caused by structural holes can persist even
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It has been empirically shown that structural holes in social networks enable potential large benefits to those individuals who bridge them (Burt, 2004). The work in Goyal and Vega-Redondo (2007) shows that the large payoff differentials caused by structural holes can persist even when agents strategically add and remove ties to smooth those differentials, thereby providing a game-theoretic rationale for the existence of bridge-agents. The present paper ties back to the initial empirical literature by explicitly assuming that agents are exogenously linked forming cliques, as in a firm environment. In this setting, bridge-agents cannot be sustained under the same conditions of Goyal and Vega-Redondo (2007). Instead, they can be sustained when the deviation possibilities are restricted and only when they connect small groups of agents to the rest. Full article