Game-theoretic Considerations Research Articles

The evolution of authoritarian processes: Fostering cooperation in large-scale groups.

Authoritarianism, comprising conventionalism, authoritarian submission, and authoritarian aggression, is an important factor underlying prejudice and social discrimination and therefore is typically perceived as socially problematic. In contrast, our work examines adaptive features of authoritarianism. Evolutionary game theoretical considerations (e.g., biased social learning) point to authoritarian psychological processes that establish and foster group life (e.g., high levels of ingroup cooperation). First, the evolution of social learning (particularly conformist and prestige biases) leads to the establishment of local and distinct cultural groups (conventionalism). Second, local cultural rules solve coordination dilemmas by transforming these rules into normative standards against which others are evaluated (authoritarian submission). Third, the common rules within a particular culture or group are reinforced by a tendency to reward norm compliance and punish norm deviations (authoritarian aggression). Implications regarding the deduction of novel research questions as well as dealing with authoritarianism as a social problem are discussed.

STRATEGY-PROOF JUDGMENT AGGREGATION

Which rules for aggregating judgments on logically connected propositions are manipulable and which not? In this paper, we introduce a preference-free concept of non-manipulability and contrast it with a preference-theoretic concept of strategy-proofness. We characterize all non-manipulable and all strategy-proof judgment aggregation rules and prove an impossibility theorem similar to the Gibbard--Satterthwaite theorem. We also discuss weaker forms of non-manipulability and strategy-proofness. Comparing two frequently discussed aggregation rules, we show that “conclusion-based voting” is less vulnerable to manipulation than “premise-based voting”, which is strategy-proof only for “reason-oriented” individuals. Surprisingly, for “outcome-oriented” individuals, the two rules are strategically equivalent, generating identical judgments in equilibrium. Our results introduce game-theoretic considerations into judgment aggregation and have implications for debates on deliberative democracy.

Fighting Islamistic Terrorism: Economic Analysis, Future Developments and Strategic Policies

This paper provides a survey on economic research on terrorism, tries to shed some light on future developments. The article starts by contrasting advantages and disadvantages of classical deterrence strategies based on rational choice theory. As 'being tough' might lead to a self-enforcing cycle of violence and since opportunity costs might play a crucial role to rational terrorists, also alternative 'soft' strategies are considered as reasonable anti-terrorism-strategies. Finally, in some game-theoretic considerations the stability of coalition of nations before and after 09/11 is analysed, thereby using strategies of 'being tough' or 'soft', and also employing the concept of 'paid riding'. The paper includes some remarks with respect to limits and possibilities of econometric terrorism research.

Banning banking in EU emissions trading?

Admitting banking in emissions trading systems reduces overall compliance costs by allowing for inter-temporal flexibility: cost savings can be traded over time. However, unless individual EU Member States (MS) decide differently, the transfer of unused allowances from the period of 2005–2007 into the first commitment period under the Kyoto Protocol, i.e. 2008–2012, will be prohibited. In this paper, we first explore the implications of such a ban on banking when initial emission targets are lenient. This analysis is based on a simulation which was recently carried out in Germany with companies and with a student control group. The findings suggest that a EU-wide ban on banking would lead to efficiency losses in addition to those losses which arise from the lack of inter-temporal flexibility. Second, we use simple game-theoretic considerations to argue that, under reasonable assumptions, such a EU-wide ban on banking will be the equilibrium outcome. Thus, to avoid a possible prisoners’ dilemma, MS should have co-ordinated their banking decisions.

On two new social choice correspondences

We introduce two new majoritarian social choice correspondences. We initially assign to every alternative in a preference profile a weight equal to one. Using (cooperative) game theoretic considerations we redistribute these weights, and use these redistributed weights to define a social choice correspondence. Then we apply this procedure iteratively by taking in each step as weights the redistributed weights obtained in the previous step. The resulting limit is used to define a second social choice correspondence. Both social choice correspondences are Pareto optimal and refinements of the Top cycle correspondence. Properties and comparisons with related social choice correspondences are discussed.

Analyzing firms' strategic investment decisions in a real options' framework

Within the context of investment under uncertainty, the real options literature has led to models that capture primarily the time to wait flexibility of monopolistic corporations' investment decision. In this paper, we propose an approach which relies on barrier options to model production and/or sales delocalization flexibility for multinational enterprises making decisions under exchange rate uncertainty. We then extend the model by introducing game theoretic considerations to show how the information set and the competitive structure of the market may lead firms to act strategically and exercise their delocalization options preemptively at an endogenously fixed exchange rate barrier.

Trust out of Distrust

The paper aims to establish the possibility of trust from within a Hobbesian framework. It shows that distrust situations can be structured in two ways, the first referred to as Hard and the second as Soft, both of which are compatible with Hobbes’s stark assumptions about human nature. In Hard distrust situations (which are prisoner’s-dilemma structured) the distrust strategy is dominant; in the Soft variety (which are stag-hunt structured) trust is an equilibrium choice. In order to establish the possibility of trust there is no need to claim that the state of nature is Soft rather than Hard, nor even that Soft is likelier. Game theoretical considerations show that all that is needed to give trust a chance is the ambiguity or uncertainty on the part of the players as to which of the two basic situations of distrust in fact obtains: which game was picked by Nature for them to play.

Algorithm architectures to support large-scale process systems engineering applications involving combinatorics, uncertainty, and risk management

Increased information intensity is greatly expanding the importance of model-based decision-making in a variety of areas. This paper reviews applications that involve large-scale combinatorics, data uncertainty, and game theoretic considerations and describes three related algorithm architectures that address these features. In particular, highly customized mathematical programming architectures are discussed for time-based problems involving significant combinatorial character. These architectures are then embedded into a simulation-based optimization (SIMOPT) architecture to address both combinatorial character and significant data uncertainty. Multiple SIMOPT objects are combined using a coordinating architecture to address game theoretic issues. A key focus of the paper is a discussion of the algorithm engineering principles necessary to mitigate the NP-complete nature of practical problems. The life cycle issues of algorithm delivery, control, support, and extensibility are important to sustained use of advanced decision-making technology. An inductive development methodology provides a means for developing sophisticated algorithms that become increasingly powerful as they are subjected to new constraint combinations. Implicit generation of formulations is crucial to routine large-scale use of mathematical programming based architectures.

The Theoretical Basis of Mediation and Other Forms of ADR: Why They Work

MEDIATION AND other techniques (known generally as Alternative Dispute Resolution – ADR) are highly effective alternatives to litigation. This paper explores the game-theoretical reasons underpinning the effectiveness of these techniques, and the reasons why litigation or arbitration may not be the best methods for resolving certain disputes. There is considerable recent literature on mediation1 and other alternative dispute resolution (ADR) techniques.2 Much of this literature provides anecdotal or statistical evidence3 to support the assertion that these techniques are effective in practice and provide certain advantages when compared to the traditional adversarial process of litigation.4 The purpose of this article is to apply elementary game-theoretical considerations to show that there are fundamental differences between litigation and ADR processes,5 and that these differences explain why ADR can, in some circumstances, be more effective than litigation. ### (a) Interests Versus Rights With respect to dispute resolution methods, it is important to distinguish between interests and rights. Interests are defined by a party in an interaction and are the things that that party is interested in (money, recognition, physical goods, and so on). Rights are given by an external framework, for example national laws or contracts between parties. In litigation, disputes are resolved by reference to the parties' rights, whereas in ADR there is more emphasis on parties'; interests.6 Table 1 shows the classification of some dispute resolution mechanisms with respect to this distinction. View this table: Table 1: Taxonomy of Methods The main difference between evaluative mediation and litigation is the greater formality and higher cost of the latter. In fact, most disputes that go to litigation are resolved through negotiation, so in many cases the litigation process itself can be seen as a way (albeit an expensive way) of obtaining the information required to find a compromise solution, which is the purpose of evaluative mediation. ### (b) Methods Based on Interests Most …

An Investigation into the Evolution of Communication

This article presents a theoretical criticism of current approaches to the study of the evolution of communication. In particular, two very common preconceptions about the subject are analyzed: the role of natural selection in the definition of the phenomenon of communication and the metaphor of communication as information exchange. An alternative characterization is presented in terms of autopoietic theory, which avoids the mentioned preconceptions. In support of this view, the evolution of coordinated activity is studied in a population of artificial agents playing an interactional game. Dynamical modeling of this evolutionary process based on game-theoretical considerations shows the existence of an evolutionarily stable strategy in the total lack of coordinated activity which, however, may be unreachable due to the presence of a periodic attractor. In a computational model of the same game, action coordination evolves even with individual costs against it, due to the presence of spatial structuring processes. A detailed explanation of this phenomenon, which does not require kin selection, is presented. In an extended game, recursive coordination evolves nontrivially when the participants share all the relevant information, demonstrating that the metaphor of information exchange can be misleading. It is shown that agents engaged in this sort of interaction are able to perform beyond their individual capabilities.

Optimal Control, Expectations and Uncertainty.

The rational expectations revolution and other developments in economics (notably game theory) have fundamentally altered the application of optimal control theory to economic forecasting and planning. In particular, they have shown that economic systems cannot be modelled simplistically on physical systems. However, as the authors of this volume show, these developments have greatly enhanced our understanding of how an economy functions, and now make it possible for optimal control theory to be applied much more effectively to economic modelling and planning. This book is divided into two parts. The first presents the orthodox framework but extends it to allow for multiplicative uncertainty, risk and non-linearities in the econometric model. The second part looks explicitly at the question of expectations. It provides methods by which forward-looking expectations can be treated jointly with the determination of economic policy. It also examines game-theoretic considerations - where, for instance, policy makers may have incentive to renege on their commitments.

Strategies for FH/MFSK Signaling with Diversity in Worst-Case Partial-Band Noise

Optimum diversity and worst-case partial-band noise jamming conditions have been derived for noncoherent energy detection of frequency-hopped (FH) <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">M</tex> -ary frequency-shift keyed (MFSK) signals using a soft-chip decision suboptimum linear combining metric with perfect jamming-state side information. However, the assumption implicit in previous publications is that the error rate is first maximized over the jammer's partial-band duty factor for arbitrary diversity, and the result is then minimized over the amount of diversity. This paper shows that if the order of optimization is reversed, different conditions and performance are produced; that is, the previous solution is not a saddlepoint. This introduces some game-theoretic considerations for the communicator and the jammer, the risks and advantages of which are explored.

An Efficient Use of Deficient Knowledge

The next major step in the development of computer-aided manufacturing systems will be the introduction of the new knowledge engineering techniques developed through artificial intelligence research. The paper outlines some recent work in systems synthesis, production control, process planning, monitoring and diagnostics, utilizing AI techniques. Proceeding from these results, new suggestions - based on situation-recognition, problem-solving and game-theoretic considerations — are put forward regarding the semi-automatic perfection of knowledge-bases and meta-bases in the absence of explicit, deterministic knowledge.

The Efficient Use of Deficient Knowledge

Summary The next major step in the development of computer-aided manufacturing systems will be the introduction of the new knowledge engineering techniques developed through artificial intelligence research. The paper outlines some recent work in systems synthesis, production control, process planning, monitoring and diagnostics, utilizing AI techniques. Proceeding from these results, new suggestions - based on situation-recognition, problem-solving and game-theoretic considerations are put forward regarding the semi-automatic perfection of knowledge-bases and meta-bases in the absence of explicit, deterministic knowledge.

An Investigation of Competitive Preference Structures and Posterior Performance Through a Bayesian Decision-Theoretic Approach

In this paper we analyze competitive decision-making situations in terms of their preference structures and posterior performance, through a Bayesian decision-theoretic framework. The setting is that of a two-by-two, two-person, non-zero-sum and noncooperative game which is repeated over time. The dynamic behavior of the competitors for different classes of games, as identified by their preference structures, is examined and a classification scheme is proposed for the purpose of unification. The competitors' dynamic behavior and posterior performance for some general classes of games is then derived, and the relationship to the results implied from game-theoretic considerations is discussed. Illustrative examples are given, too.

Local properties of maps of the ball

Letfbe an essential map ofSn−1into itself (i.e.,fis not homotopic to a constant mapping) admitting an extension mapping the closed unit ballB¯nintoℝn. Then, for every interior pointyofBn, there exists a pointxinf−1(y)such that the image of no neighborhood ofxis contained in a coordinate half space withyon its boundary. Under additional conditions, the image of a neighborhood ofxcovers a neighborhood ofy. Differential versions are valid for quasianalytic functions. These results are motivated by game-theoretic considerations.

Merger Agreements: Some Game-Theoretic Considerations

Merger Agreements: Some Game-Theoretic Considerations

Predicting the decision behavior of a knowledgeable opponent.

24 subjects were required to make Anticipation type decisions in a simulated tactical situation. On each trial, the tactical situation required a choice between two targets which could be of the same or different value. The targets also varied from trial to trial with regard to their vulnerability to attack. The subjects participated in pairs—one as an attacker, the other as defender. Despite sizable discrepancies in the mix of strategies employed in particular cases, the patterns of the subjects' responses were similar to those dictated by game theoretic considerations. In general the attackers were better able to predict their opponents' behavior. However, neither group was able to capitalize on the non-optimum behavior of their opponents.