Open AccessArticle
Gender Differences in the Response to Decision Power and Responsibility—Framing Effects in a Dictator Game
Games 2018, 9(2), 28; https://doi.org/10.3390/g9020028 (registering DOI) -
Abstract
This paper studies the effects of two different frames on decisions in a dictator game. Before making their allocation decision, dictators read a short text. Depending on the treatment, the text either emphasizes their decision power and freedom of choice or it stresses
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This paper studies the effects of two different frames on decisions in a dictator game. Before making their allocation decision, dictators read a short text. Depending on the treatment, the text either emphasizes their decision power and freedom of choice or it stresses their responsibility for the receiver’s payoff. Including a control treatment without such a text, three treatments are conducted with a total of 207 dictators. Our results show a different reaction to these texts depending on the dictator’s gender. We find that only men react positively to a text that stresses their responsibility for the receiver, while only women seem to react positively to a text that emphasizes their decision power and freedom of choice. Full article
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Open AccessArticle
Achieving Perfect Coordination amongst Agents in the Co-Action Minority Game
Games 2018, 9(2), 27; https://doi.org/10.3390/g9020027 -
Abstract
We discuss the strategy that rational agents can use to maximize their expected long-term payoff in the co-action minority game. We argue that the agents will try to get into a cyclic state, where each of the (2N+1)
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We discuss the strategy that rational agents can use to maximize their expected long-term payoff in the co-action minority game. We argue that the agents will try to get into a cyclic state, where each of the (2N+1) agents wins exactly N times in any continuous stretch of (2N+1) days. We propose and analyse a strategy for reaching such a cyclic state quickly, when any direct communication between agents is not allowed, and only the publicly available common information is the record of total number of people choosing the first restaurant in the past. We determine exactly the average time required to reach the periodic state for this strategy. We show that it varies as (N/ln2)[1+αcos(2πlog2N)] , for large N, where the amplitude α of the leading term in the log-periodic oscillations is found be 8π2(ln2)2exp(2π2/ln2)7×1011 . Full article
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Open AccessArticle
Incentive Systems for Risky Investment Decisions Under Unknown Preferences: Ortner et al. Revisited
Games 2018, 9(2), 26; https://doi.org/10.3390/g9020026 -
Abstract
Ortner et al. (Manage. Account. Res. 36(1):43–50, 2017) propose the State-Contingent Relative Benefit Cost Allocation Scheme as an incentive system for risky investment decisions. The note at hand reveals the information distribution implicitly assumed within the framework of this study. Based on
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Ortner et al. (Manage. Account. Res. 36(1):43–50, 2017) propose the State-Contingent Relative Benefit Cost Allocation Scheme as an incentive system for risky investment decisions. The note at hand reveals the information distribution implicitly assumed within the framework of this study. Based on this information distribution, both simpler and more powerful ways to induce consistency exist. Full article
Open AccessArticle
Sharing Loading Costs for Multi Compartment Vehicles
Games 2018, 9(2), 25; https://doi.org/10.3390/g9020025 -
Abstract
Supply chains for goods that must be kept cool—cold chains—are of increasing importance in world trade. The goods must be kept within well-defined temperature limits to preserve their quality. One technique for reducing logistics costs is to load cold items into multiple compartment
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Supply chains for goods that must be kept cool—cold chains—are of increasing importance in world trade. The goods must be kept within well-defined temperature limits to preserve their quality. One technique for reducing logistics costs is to load cold items into multiple compartment vehicles (MCVs), which have several spaces within that can be set for different temperature ranges. These vehicles allow better consolidation of loads. However, constructing the optimal load is a difficult problem, requiring heuristics for solution. In addition, the cost determined must be allocated to the different items being shipped, most often with different owners who need to pay, and this should be done in a stable manner so that firms will continue to combine loads. We outline the basic structure of the MCV loading problem, and offer the view that the optimization and cost allocation problems must be solved together. Doing so presents the opportunity to solve the problem inductively, reducing the size of the feasible set using constraints generated inductively from the inductive construction of minimal balanced collections of subsets. These limits may help the heuristics find a good result faster than optimizing first and allocating later. Full article
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Open AccessArticle
Personal-Data Disclosure in a Field Experiment: Evidence on Explicit Prices, Political Attitudes, and Privacy Preferences
Games 2018, 9(2), 24; https://doi.org/10.3390/g9020024 -
Abstract
Many people implicitly sell or give away their data when using online services and participating in loyalty programmes—despite growing concerns about company’s use of private data. Our paper studies potential reasons and co-variates that contribute to resolving this apparent paradox, which has not
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Many people implicitly sell or give away their data when using online services and participating in loyalty programmes—despite growing concerns about company’s use of private data. Our paper studies potential reasons and co-variates that contribute to resolving this apparent paradox, which has not been studied previously. We ask customers of a bakery delivery service for their consent to disclose their personal data to a third party in exchange for a monetary rebate on their past orders. We study the role of implicitly and explicitly stated prices and add new determinants such as political orientation, income proxies and membership in loyalty programmes to the analysis of privacy decision. We document large heterogeneity in privacy valuations, and that the offered monetary benefits have less predictive power for data-disclosure decisions than expected. However, we find significant predictors of such decisions, such as political orientation towards liberal democrats (FDP) and membership in loyalty programmes. We also find suggestive evidence that loyalty programmes are successful in disguising their “money for data” exchange mechanism. Full article
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Open AccessArticle
Voluntary Disclosure of Private Information and Unraveling in the Market for Lemons: An Experiment
Games 2018, 9(2), 23; https://doi.org/10.3390/g9020023 -
Abstract
We experimentally analyze a lemons market with a labor-market framing. Sellers are referred to as “workers” and have the possibility to provide “employers” with costly but credible information about their “productivity”. Economic theory suggests that in this setup, unraveling takes place and a
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We experimentally analyze a lemons market with a labor-market framing. Sellers are referred to as “workers” and have the possibility to provide “employers” with costly but credible information about their “productivity”. Economic theory suggests that in this setup, unraveling takes place and a number of different types are correctly identified in equilibrium. While we do observe a substantial degree of information disclosure, we also find that unraveling is typically not as complete as predicted by economic theory. The behavior of both workers and employers impedes unraveling in that there is too little disclosure. Workers are generally reluctant to disclose their private information, and employers enforce this behavior by bidding less competitively if workers reveal compared to the case where they conceal information. Full article
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Open AccessArticle
Intention-Based Sharing
Games 2018, 9(2), 22; https://doi.org/10.3390/g9020022 -
Abstract
How are allocation results affected by information that another anonymous participant intends to be more or less generous? We explore this experimentally via two participants facing the same allocation task with only one actually giving after possible adjustment of own generosity based on
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How are allocation results affected by information that another anonymous participant intends to be more or less generous? We explore this experimentally via two participants facing the same allocation task with only one actually giving after possible adjustment of own generosity based on the other’s intended generosity. Participants successively face three game types, the ultimatum, yes-no and impunity game, or (between subjects) in the reverse order. Although only the impunity game appeals to intrinsic generosity, we confirm conditioning even when sanctioning is possible. Based on our data, we distinguish two major types of participants in all three games: one yielding to the weakest social influence and the other immune to it and offering much less. This is particularly interesting in the impunity game where other-regarding concerns are minimal. Full article
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Open AccessArticle
Bifurcation Mechanism Design—From Optimal Flat Taxes to Better Cancer Treatments
Games 2018, 9(2), 21; https://doi.org/10.3390/g9020021 -
Abstract
Small changes to the parameters of a system can lead to abrupt qualitative changes of its behavior, a phenomenon known as bifurcation. Such instabilities are typically considered problematic, however, we show that their power can be leveraged to design novel types of mechanisms.
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Small changes to the parameters of a system can lead to abrupt qualitative changes of its behavior, a phenomenon known as bifurcation. Such instabilities are typically considered problematic, however, we show that their power can be leveraged to design novel types of mechanisms. Hysteresis mechanisms use transient changes of system parameters to induce a permanent improvement to its performance via optimal equilibrium selection. Optimal control mechanisms induce convergence to states whose performance is better than even the best equilibrium. We apply these mechanisms in two different settings that illustrate the versatility of bifurcation mechanism design. In the first one we explore how introducing flat taxation could improve social welfare, despite decreasing agent “rationality,” by destabilizing inefficient equilibria. From there we move on to consider a well known game of tumor metabolism and use our approach to derive potential new cancer treatment strategies. Full article
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Open AccessFeature PaperEditorial
Ethics, Morality, and Game Theory
Games 2018, 9(2), 20; https://doi.org/10.3390/g9020020 -
Abstract
Ethics is a field in which the gap between words and actions looms large. Game theory and the empirical methods it inspires look at behavior instead of the lip service people sometimes pay to norms. We believe that this special issue comprises several
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Ethics is a field in which the gap between words and actions looms large. Game theory and the empirical methods it inspires look at behavior instead of the lip service people sometimes pay to norms. We believe that this special issue comprises several illustrations of the fruitful application of this approach to ethics. Full article
Open AccessArticle
Fractionated Follow-Up Chemotherapy Delays the Onset of Resistance in Bone Metastatic Prostate Cancer
Games 2018, 9(2), 19; https://doi.org/10.3390/g9020019 -
Abstract
Prostate cancer to bone metastases are almost always lethal. This results from the ability of metastatic prostate cancer cells to co-opt bone remodeling, leading to what is known as the vicious cycle. Understanding how tumor cells can disrupt bone homeostasis through their
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Prostate cancer to bone metastases are almost always lethal. This results from the ability of metastatic prostate cancer cells to co-opt bone remodeling, leading to what is known as the vicious cycle. Understanding how tumor cells can disrupt bone homeostasis through their interactions with the stroma and how metastatic tumors respond to treatment is key to the development of new treatments for what remains an incurable disease. Here we describe an evolutionary game theoretical model of both the homeostatic bone remodeling and its co-option by prostate cancer metastases. This model extends past the evolutionary aspects typically considered in game theoretical models by also including ecological factors such as the physical microenvironment of the bone. Our model recapitulates the current paradigm of the “vicious cycle” driving tumor growth and sheds light on the interactions of heterogeneous tumor cells with the bone microenvironment and treatment response. Our results show that resistant populations naturally become dominant in the metastases under conventional cytotoxic treatment and that novel schedules could be used to better control the tumor and the associated bone disease compared to the current standard of care. Specifically, we introduce fractionated follow up therapy—chemotherapy where dosage is administered initially in one solid block followed by alternating smaller doses and holidays—and argue that it is better than either a continuous application or a periodic one. Furthermore, we also show that different regimens of chemotherapy can lead to different amounts of pathological bone that are known to correlate with poor quality of life for bone metastatic prostate cancer patients. Full article
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Open AccessArticle
Generalized Trust, Need for Cognitive Closure, and the Perceived Acceptability of Personal Data Collection
Games 2018, 9(2), 18; https://doi.org/10.3390/g9020018 -
Abstract
This vignette-based study examines how generalized trust and the need for cognitive closure relate to the perceived acceptability of contemporary business methods of personal data collection. Subjects are exposed to four scenarios that describe a method of personal data collection, involving either brand-name
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This vignette-based study examines how generalized trust and the need for cognitive closure relate to the perceived acceptability of contemporary business methods of personal data collection. Subjects are exposed to four scenarios that describe a method of personal data collection, involving either brand-name companies or generic descriptors of companies. After each scenario, subjects rate how acceptable they find the practice of data collection, along with the frequency and quality of experiences that they have had with the company (for brand names) or type of company (for generic descriptors). Judgments of perceived acceptability are analyzed, both across the portfolio of judgments and within each separate scenario. While analyses of each separate scenario point to the context-dependency of the perceived acceptability of data collection, several results stand out when analyzing the subjects’ portfolios of responses in the aggregate. Higher generalized trust is linked to a higher average acceptability rating, and the effect is stronger when companies are described with brand names rather than generic descriptors. Uniformly, however, no relationship is found between need for cognitive closure and perceived acceptability. Additionally, positive experiences are found to be a stronger predictor of perceived acceptability of data collection than frequency of use. Full article
Open AccessReview
How to Analyze Models of Nonlinear Public Goods
Games 2018, 9(2), 17; https://doi.org/10.3390/g9020017 -
Abstract
Public goods games often assume that the effect of the public good is a linear function of the number of contributions. In many cases, however, especially in biology, public goods have nonlinear effects, and nonlinear games are known to have dynamics and equilibria
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Public goods games often assume that the effect of the public good is a linear function of the number of contributions. In many cases, however, especially in biology, public goods have nonlinear effects, and nonlinear games are known to have dynamics and equilibria that can differ dramatically from linear games. Here I explain how to analyze nonlinear public goods games using the properties of Bernstein polynomials, and how to approximate the equilibria. I use mainly examples from the evolutionary game theory of cancer, but the approach can be used for a wide range of nonlinear public goods games. Full article
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Open AccessArticle
Theory of Mind and General Intelligence in Dictator and Ultimatum Games
Games 2018, 9(2), 16; https://doi.org/10.3390/g9020016 -
Abstract
Decreasing social sensitivity (i.e., the ability of a person to perceive, understand, and respect the feelings and viewpoints of others), has been shown to facilitate selfish behavior. This is not only true for exogenous changes in social sensitivity, but also for social sensitivity
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Decreasing social sensitivity (i.e., the ability of a person to perceive, understand, and respect the feelings and viewpoints of others), has been shown to facilitate selfish behavior. This is not only true for exogenous changes in social sensitivity, but also for social sensitivity influenced by someone’s social cognition. In this analysis, we examined one measure of social cognition, namely a person’s Theory of Mind (ToM), to examine differences in decision-making in standard non-strategic and strategic environments (dictator and ultimatum games). We found that participants with higher ToM gave a greater share in the non-strategic environment. In the ultimatum game, however, ToM showed no correlation with the offers of the ultimators. Instead, we found that general intelligence scores—measured by the Wonderlic test—shared a negative, albeit weak, correlation with the amount offered in the ultimatum game. Thus, we find that lower social cognition is an important explanatory variable for selfish behavior in a non-strategic environment, while general intelligence shares some correlation in a strategic environment. Similar to the change in social sensitivity created by a specific game design, social sensitivity influenced by individual personality traits can influence behavior in non-strategic environments. Full article
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Open AccessArticle
Sequential Auctions with Capacity Constraints: An Experimental Investigation
Games 2018, 9(1), 15; https://doi.org/10.3390/g9010015 -
Abstract
We conduct a laboratory experiment where groups of 4 subjects constrained to obtain at most one good each, sequentially bid for three goods in first and second price auctions. Subjects learn at the beginning of each auction their valuation for the good and
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We conduct a laboratory experiment where groups of 4 subjects constrained to obtain at most one good each, sequentially bid for three goods in first and second price auctions. Subjects learn at the beginning of each auction their valuation for the good and exit the auction once they have obtained one good. We show that, contrary to equilibrium predictions, subjects’ bidding behavior is excessively similar across units and across mechanisms at the aggregate level. We provide two (complementary) explanations for these departures. One is bounded rationality. Subjects do not fully comprehend subtle differences between mechanisms. The other is self-selection. Subjects are very heterogeneous and some of them deviate more from equilibrium than others. Since deviations take mostly the form of overbidding, these subjects win the first or second good and exit the auction, leaving those who play closer to theoretical predictions to bid for the third good. Support for this hypothesis comes from the documented higher bidding, lower efficiency and lower profits associated with the first and second unit compared to the third one. Full article
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Open AccessArticle
Does Imperfect Data Privacy Stop People from Collecting Personal Data?
Games 2018, 9(1), 14; https://doi.org/10.3390/g9010014 -
Abstract
Many companies try to access personal information to discriminate among consumers. We analyse how privacy regulations affect the acquisition and disclosure of information in a simple game of persuasion. Theory predicts that no data will be acquired with Disclosure Duty of collected data
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Many companies try to access personal information to discriminate among consumers. We analyse how privacy regulations affect the acquisition and disclosure of information in a simple game of persuasion. Theory predicts that no data will be acquired with Disclosure Duty of collected data whereas Consent Law with perfect privacy results in complete information acquisition. Imperfect privacy, i.e., an environment in which leaks of collected data are possible, gives rise to multiple equilibria. Results from a laboratory experiment confirm the qualitative differences between Consent Law and Disclosure Duty and show that imperfect privacydoes not stop people from collecting personal information. Full article
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Open AccessArticle
Creating a Domain of Losses in the Laboratory: Effects of Endowment Size
Games 2018, 9(1), 13; https://doi.org/10.3390/g9010013 -
Abstract
This study examines the effects of initial endowment size on individual behavior in a binary choice game with no dominant strategy. Subjects make decisions in two, theoretically identical sequences, differing in initial endowment levels only. Each decision involves a choice between an option
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This study examines the effects of initial endowment size on individual behavior in a binary choice game with no dominant strategy. Subjects make decisions in two, theoretically identical sequences, differing in initial endowment levels only. Each decision involves a choice between an option with a certain loss and an option with a loss that is increasing in the number of individuals who choose it. For the higher endowment level, all subjects are guaranteed a positive payoff. For the lower endowment level, subjects who choose the uncertain loss option could receive a negative payoff. The results indicate that in the first round of play, subjects with the higher endowment level choose the certain loss option significantly more often than subjects with the lower endowment level. There are, however, no significant differences in behavior beyond the first few rounds of play. Full article
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Open AccessArticle
The Optimal Contract under Adverse Selection in a Moral-Hazard Model with a Risk-Averse Agent
Games 2018, 9(1), 12; https://doi.org/10.3390/g9010012 -
Abstract
This paper studies the optimal contract offered by a risk-neutral principal to a risk-averse agent when the agent’s hidden ability and action both improve the probability of the project being successful. We show that if the agent is sufficiently prudent and able, the
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This paper studies the optimal contract offered by a risk-neutral principal to a risk-averse agent when the agent’s hidden ability and action both improve the probability of the project being successful. We show that if the agent is sufficiently prudent and able, the principal induces a higher probability of success than under moral hazard, despite the costly informational rent given up. Moreover, there is distortion at the top. Finally, the conditions to avoid pooling are difficult to satisfy because of the different kinds of incentives to be managed and the overall trade-off between rent extraction, insurance, and efficiency involved. Full article
Open AccessArticle
Imitation of Peers in Children and Adults
Games 2018, 9(1), 11; https://doi.org/10.3390/g9010011 -
Abstract
Imitation of the successful choices of others is a simple and superficially attractive learning rule. It has been shown to be an important driving force for the strategic behavior of (young) adults. In this study we examine whether imitation is prevalent in the
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Imitation of the successful choices of others is a simple and superficially attractive learning rule. It has been shown to be an important driving force for the strategic behavior of (young) adults. In this study we examine whether imitation is prevalent in the behavior of children aged between 8 and 10. Surprisingly, we find that imitation seems to be cognitively demanding. Most children in this age group ignore information about others, foregoing substantial learning opportunities. While this seems to contradict much of the literature in the field of psychology, we argue that success-based imitation of peers may be harder for children to perform than non-success-based imitation of adults. Full article
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Open AccessFeature PaperArticle
Dynamic Pricing Decisions and Seller-Buyer Interactions under Capacity Constraints
Games 2018, 9(1), 10; https://doi.org/10.3390/g9010010 -
Abstract
Focusing on sellers’ pricing decisions and the ensuing seller-buyer interactions, we report an experiment on dynamic pricing with scarcity in the form of capacity constraints. Rational expectations equilibrium solutions are constructed and then tested experimentally with subjects assigned the roles of sellers and
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Focusing on sellers’ pricing decisions and the ensuing seller-buyer interactions, we report an experiment on dynamic pricing with scarcity in the form of capacity constraints. Rational expectations equilibrium solutions are constructed and then tested experimentally with subjects assigned the roles of sellers and buyers. We investigate behavior in two between-subject conditions with high and moderate levels of capacity. Our laboratory market exhibits strategic sophistication: the price offers of sellers and the buyers’ aggregate responses largely approximate equilibrium predictions. We also observe systematic deviations from equilibrium benchmarks on both sides of the market. Specifically, in our experiment the sellers are boundedly strategic: their prices often exhibit strategic adjustments to profit from buyers with limited strategic sophistication, but they are also often biased towards equilibrium pricing even when that would not be ex-post optimal. Full article
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Open AccessArticle
Game of Thrones: Accommodating Monetary Policies in a Monetary Union
Games 2018, 9(1), 9; https://doi.org/10.3390/g9010009 -
Abstract
In this paper, we present an application of the dynamic tracking games framework to a monetary union. We use a small stylized nonlinear three-country macroeconomic model of a monetary union to analyze the interactions between fiscal (governments) and monetary (common central bank) policy
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In this paper, we present an application of the dynamic tracking games framework to a monetary union. We use a small stylized nonlinear three-country macroeconomic model of a monetary union to analyze the interactions between fiscal (governments) and monetary (common central bank) policy makers, assuming different objective functions of these decision makers. Using the OPTGAME algorithm, we calculate solutions for several games: a noncooperative solution where each government and the central bank play against each other (a feedback Nash equilibrium solution), a fully-cooperative solution with all players following a joint course of action (a Pareto optimal solution) and three solutions where various coalitions (subsets of the players) play against coalitions of the other players in a noncooperative way. It turns out that the fully-cooperative solution yields the best results, the noncooperative solution fares worst and the coalition games lie in between, with a broad coalition of the fiscally more responsible countries and the central bank against the less thrifty countries coming closest to the Pareto optimum. Full article
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