Framework Of Game Theory Research Articles

Costly incentives design from an institutional perspective: cooperation, sustainability and affluence

Incentives are usually introduced by the regulator entity (third-party), to promote cooperation in a market. The implementation of incentives is always costly and thus might fail to be enforced sustainably. This work aims at exploring the effects of incentives from an institutional perspective, while coping with the scenario where the third-party is part of the system but not composed by players. The evolutionary game theory (EGT) framework is applied to identify the incentives that lead to pure cooperation. In contrast to traditional EGT, this paper introduces an elimination mechanism that can reduce the market size. The incentives identified in the EGT analysis are further examined in simulation experiments which measure the market size, affluence and sustainability. The findings show: (1) light punishment leads to a reduction of the market size, yet heavier punishment is beneficial to the market size and wealth; (2) mixed incentives will generally lead to different wealth of the third party and of the participants. While under moderate strength, the wealth of both parties is the same and their overall wealth is maximal; (3) for sustainability, pure punishment (resp. reward) is sustainable (resp. unsustainable), the sustainability of mixed incentives depends on both their strength and agents’ rationality level.

Borrowers Strategic Loan Default in Central Bank Microfinance Facilities and Incentives to Repay

This study examines the incidence of strategic default by borrowers in Central Bank of Nigeria (CBN) microfinance loan facilities and the role of incentives to prevent such opportunistic behaviour. A collective strategic default is a situation where sound borrower feigns inability to repay with an expectation that a large number of other borrowers will not repay their loans, thus reducing the bank’s enforcement capacity, and then the effectiveness of the policy. Such opportunistic behaviour of borrowers happens in a framework in which there is no incentives to compel and encourage borrowers to pay back the borrowed funds. Using an extensive form game in a global game theory framework, the study found that without incentives, there is a room for opportunistic behaviour in central government financial intervention programmes. While such programmes are expected to benefit the economy, but incentives, either positive or negative will reduce incidence of strategic default.

Information disclosure, practical actions and dynamics of employees' health and safety issues in Chinese family businesses-Evidence based on Chinese a-share listed companies.

IntroductionGlobal health emergency as COVID-19 has brought unprecedented concerns to the health and safety of employees, which is important yet long-neglected. This paper studies the mechanism and influencing factors of Chinese family enterprises performance in employees' health and safety from information disclosure, practical action and dynamic change. And based on theoretical framework and empirical model, this paper provides feasible regulatory policies on the behavior of family business.MethodsThis study construct a game theory framework and uses a sample of Chinese A-share listed companies. The database is provided by a third-party corporate social responsibility rating agency, SynTao Green Finance. We use empirical models to test the hypothesis from the theoretical model of game theory.ResultsIn practice, family businesses are less likely to fulfill the health and safety responsibilities of employees compared to non-family businesses. Family businesses are likely to be more motivated than other businesses to send signals that they are performing their responsibilities well. From the view of operation term, family businesses will be gradually inclined to better fulfill the health and safety responsibilities of their employees, while this process will show a “U” shape change over operation time.ConclusionsAs there is inconsistency between the information disclosure and actual practice of family enterprises when it comes to the issue of employee health and safety, more related regulatory policies and stakeholder monitoring are needed. Although the performance of family enterprises in this regard will be better in the long run, it is still necessary to improve employees' legal and rights awareness and enhance the effectiveness of supervision over external stakeholders.

СИНТЕЗ МОДЕЛЕЙ ЛОКАЛЬНИХ ЕЛЕКТРОЕНЕРГЕТИЧНИХ СИСТЕМ З ДЖЕРЕЛАМИ РОЗОСЕРЕДЖЕНОЇ ГЕНЕРАЦІЇ

The problems of integration of Microgrids which include DG sources and RES with centralized electric power systems are investigated in this paper. The main stages and tasks of synthesis of models of these systems are analyzed. Authors propose to create models of the synthesized systems based on game-theoretic approach which allows to take into account the interests (objective functions) of the models of both Microgrids and centralized systems. Such method allows to reflect the diverse interaction of the systems with DG sources and RES and centralized power systems. Based on the proposed method, the problem of multi-criterion optimization for models of such systems in the framework of game theory is formulated by authors. The procedure of optimization of the synthesized system model in a formalized game is proposed/ This procedure is based on the mechanisms of dynamic pricing and allows to find the most optimal solutions for the game task. References 10, figures 5.

A GAME THEORY SIMULATION ON THE CREDIT SYSTEM OF BANKS

Oyun teorisi, bir rekabet ortamında bir birey ya da grubun elde ettiği kazancın, bu rekabet ortamına katılan diğer birey ve grupların kararlarına bağlı olduğunu savunan matematiksel yaklaşım olarak tanımlanmaktadır. Bu açıdan değerlendirilince de oyun teorisi rekabetin matematiği olarak da ifade edilen bir stratejik karar alma aracı olarak karşımıza çıkmaktadır. Günümüz şartlarında rekabetin daha da artmasıyla birlikte oyun kuramı olarak da bilinen oyun teorisi öne çıkmaya başlamıştır. Özellikle de son zamanlarda asimetrik bilginin piyasalarda kendini göstermesiyle birlikte oyun teorisinin önemi daha da anlaşılmıştır. Bu açıdan değerlendirilince de oyun teorisi özellikle de asimetrik bilginin yaygınlık kazandığı bankacılık sektöründe, kredi alıp vermede bankaların kredi alan müşterinin yatırımı ve bu yatırımın geleceğiyle ilgili tam bilgiye sahip olmadıklarından dolayı, büyük bir önem arz etmeye başlamıştır. Bu doğrultuda bu çalışmada bankalar tarafında verilen kredilere yönelik genel stratejik yaklaşımlar geliştirilerek oyun teorisi çerçevesinde incelemelerde bulunulmuştur. Sonuçta en doğru stratejinin her iki tarafa da kredi uygulaması ve bunların da aldıkları kredileri geri ödemesi durumunda ortaya çıktığı anlaşılmıştır.

Spatial structure might impede cooperation in evolutionary games with reinforcement learning

Cooperation has attracted considerable attention in recent years. In order to explain altruistic cooperation behaviors that emerged in social dilemmas, a large number of mechanisms have been proposed under the framework of traditional evolutionary game (EG) theory, especially network reciprocity, which has achieved great success. On the other hand, the design of AI algorithm provides a new idea for agents’ decision-making behaviors. The influence of multi-agent reinforcement learning (RL) on cooperation has also received a lot of attention. However, the study of EG with AI algorithm in a population located on spatial structures has not been thoroughly considered. In this paper, we incorporate RL into EGs conducted on spatial structures. By numerical simulations, we find that, in comparison to the well-mixed case, cooperation might be impeded in the population located on spatial structures when the agents update their strategies by adopting Q-learning algorithm instead of pairwise imitation that widely used in traditional EGs. We further reveal the mechanism for the evolution of cooperation in the EGs with Q-learning algorithm, by investigating the distributions of the Q-tables held by agents in the population. Our findings may help understand the different outcomes on spatial structures in EGs with Q-learning algorithm when compared with that in traditional EGs.

Enabling imitation-based cooperation in dynamic social networks

The emergence of cooperation among self-interested agents has been a key concern of the multi-agent systems community for decades. With the increased importance of network-mediated interaction, researchers have shifted the attention to the impact of social networks and their dynamics in promoting or hindering cooperation, drawing various context-dependent conclusions. For example, some lines of research, theoretical and experimental, suggest the existence of a threshold effect in the ratio of timescales of network evolution, after which cooperation will emerge, whereas other lines dispute this, suggesting instead a Goldilocks zone. In this paper we provide an evolutionary game theory framework to understand coevolutionary processes from a bottom up perspective - in particular the emergence of a cooperator-core and defector-periphery - clarifying the impact of partner selection and imitation strategies in promoting cooperative behaviour, without assuming underlying communication or reputation mechanisms. In doing so we provide a unifying framework to study imitation-based cooperation in dynamic social networks and show that disputes in the literature can in fact coexist in so far as the results stem from different equally valid assumptions.

Analyzing the relation between anchoring and dark triad personality traits in the prisoner’s and traveler’s dilemmas

Anchoring bias has been extensively studied in behavioral economics, but the influence of individual differences on this bias has rarely received attention. However, research suggests that personality traits may affect susceptibility to bias. The present study addresses how dark triad traits may affect decisions within the framework of behavioral game theory, how decisions are justified, whether anchors are generated, and how personality traits affect anchors. A total of 379 participants played the prisoner’s dilemma and traveler’s dilemma games. In both games, three groups were configured, two with anchors and one control group without anchors. The games were conducted through an online questionnaire in which participants also completed the short dark triad test. The Machiavellianism and psychopathy traits yielded relationships with the decisions made in the games but did not affect the anchors. In the traveler’s dilemma, there was a clear anchoring, and in the prisoner’s dilemma, there was no anchoring. In addition, the players rationalized the decisions made against anchoring.

Abilities and the structure of the firm

In this paper, we enhance the production games approach introduced by Hiller (Manag Decis Econ 40(5):520–525, 2019) with aspects from a recent article by Morelli and Park (Games Econ Behav 96(1):90–96, 2016), to analyze how abilities of employees influence the structure and the wage scheme of the firm. The analysis is done within the framework of cooperative game theory. Concretely, we apply the coalition structure approach and the chi value (Casajus in Games Econ Behav 65(1):49–61, 2009).

A Review of Game Theory and Multi-Criteria Decision-Making Methods with 10 Application to the Oil Production and Price

The oil production and price issues have been discovered a long time ago, and always be a continuous problem to the globe especially during the current global threats of the coronavirus pandemic. This paper provides a literature review that involves game theory and multi-criteria decision-making (MCDM) methods with its applications to oil production and price problems. This paper identifies and analyses the use of the game theory and MCDM methods on oil production and price to compare the situation studied, to determine the model that has been used, the trend of past literature and also the details of the basic elements for the game theory framework. Therefore, the oil production and price problem using the game theory and MCDM methods are reviewed and numerous applications studied from the past works of literature are highlighted. The trend of oil production and price which used the game theory and MCDM methods based on the year 2001 till 2021 is still lacking sources from the Web of Science and Scopus databases. The main contribution of the recent study is the employment of the game theory and MCDM methods to the oil production and price problem.
 Keywords: Game theory; MCDM; oil production; oil price

Academic excellence and community relevance: Can we have it all?

Academic excellence, in its original meaning (areté), combines intellectual and moral merit, grounded in one's relevance to and impact on one's world. However, in the current era of limited time and high-stake competition, social relevance is pre-assumed to trade-off against scientific distinction. This paper is one long argument against such excellence-relevance trade-off. We first briefly describe the history of academic 'excellence' and argue it does not support the current use of the term nor vindicate a necessary community-academia trade-off. Second, we review the current game theory framework for addressing community-academia interactions. We argue that due to its pre-assumed trade-off, it often entrenches an unjust hierarchy between science and society, even when motivated by honest goodwill and ending with reciprocal "win-win" benefits. Given these difficulties, in the third section we present a practical alternative, a case study of "Town Square Academia", which operates in peripheral and heterogenic communities. We review its success and failures in the attempt to combine excellence with relevance, and argue for expanding such attempts. To conclude, given the importance of bridging the gap between science and society, even if scientific excellence only sometimes manages to unite with social and environmental relevance, it should all ways be attempted before rolled out.

Cost and emission allocation for joint replenishment systems subject to carbon constraints

We consider joint replenishment among multiple retailers subject to various types of carbon constraints. In particular, we consider four types of carbon constraints: carbon tax, strict carbon cap, carbon cap-and-offset, and carbon cap-and-price. Under each carbon policy, we first identify the optimal joint ordering policy. Then, we study the cost allocation problem in the framework of cooperative game theory. For the joint replenishment game with carbon tax, we show that a simple proportional rule belongs to the core of the corresponding game. For the joint replenishment games with strict carbon cap, carbon cap-and-offset, and cap-and-price wherein the penalty rate is larger than the reward rate, we show that the cost allocation rules based on the Lagrangian multipliers belong to the core of the corresponding games. Interestingly, for the joint replenishment game with cap-and-price wherein the penalty rate is less than the reward rate, we show that the corresponding joint replenishment game may not satisfy subadditivity and may have an empty core. This implies that joint replenishment is not feasible in this situation. In addition, we further discuss carbon emission allocation game under the strict carbon cap policy. We show that the carbon emission game does not necessarily satisfy subadditivity, and therefore, we propose an algorithm to generate an optimal coalition structure.

Равновесие Нэша при выделении площадей для организации платных и бесплатных парковок с учетом интересов автомобилистов, городских властей и владельцев парковок

The problem of optimizаtion the distribution of urban territory near a center of gravity (airport, railway station, mall, etc.) between two types of parking lots: paid and free is considered. Obviously, under otherwise equal conditions the car user will choose free parking, but this will lead to an increase in the time to find a parking space. Therefore, paying for parking is beneficial for people who have a higher their value of time. Paid parking operator determine the size of the parking fee - if the price is low enough, all parking spaces will be occupied and there will be problems with parking, in addition, there will be lost profits. Lost profits will also occur if the price is high enough, because if the price goes up, fewer car users will be ready to use paid parking services. The city authorities' task is to determine part of the land which should be allocated for paid parking on the understanding that the rest of the land goes to free parking. The paid parking owners' task is to determine the optimal price in order to maximize the profit. Car users choose parking based on their value of time. A mathematical model was built with three types of participants: car users, municipal authorities and parking operators. The strategy of the passenger is the choice of parking, the goal is to minimize the cost and time. The strategy of the municipality is the allocation of territory for parking, the goal is similar to the goals of passengers. Parking operator with the strategy "parking price" achieves to maximize profit. The interaction of the participants is described within the framework of game theory, the objective functions of the players are considered, and the existence of the Nash equilibrium is proved. Numerical examples are considered, options for the development of the presented model are described. The dependence of characteristics on the total allocated number of parking spaces in two types of parking lots, the price of parking and the intensity of the car flow to the center of gravity is presented.

How disease risk awareness modulates transmission: coupling infectious disease models with behavioural dynamics.

Epidemiological models often assume that individuals do not change their behaviour or that those aspects are implicitly incorporated in parameters in the models. Typically, these assumptions are included in the contact rate between infectious and susceptible individuals. However, adaptive behaviours are expected to emerge and play an important role in the transmission dynamics across populations. Here, we propose a theoretical framework to couple transmission dynamics with behavioural dynamics due to infection awareness. We modelled the dynamics of social behaviour using a game theory framework, which is then coupled with an epidemiological model that captures the disease dynamics by assuming that individuals are aware of the actual epidemiological state to reduce their contacts. Results from the mechanistic model show that as individuals increase their awareness, the steady-state value of the final fraction of infected individuals in a susceptible-infected-susceptible (SIS) model decreases. We also incorporate theoretical contact networks, having the awareness parameter dependent on global or local contacts. Results show that even when individuals increase their awareness of the disease, the spatial structure itself defines the steady state.

Strategic robustness in bi-level system-of-systems design

Abstract Robust designs protect system utility in the presence of uncertainty in technical and operational outcomes. Systems-of-systems, which lack centralized managerial control, are vulnerable to strategic uncertainty from coordination failures between partially or completely independent system actors. This work assesses the suitability of a game-theoretic equilibrium selection criterion to measure system robustness to strategic uncertainty and investigates the effect of strategically robust designs on collaborative behavior. The work models interactions between agents in a thematic representation of a mobile computing technology transition using an evolutionary game theory framework. Strategic robustness and collaborative solutions are assessed over a range of conditions by varying agent payoffs. Models are constructed on small world, preferential attachment and random graph topologies and executed in batch simulations. Results demonstrate that systems designed to reduce the impacts of coordination failure stemming from strategic uncertainty also increase the stability of the collaborative strategy by increasing the probability of collaboration by partners; a form of robustness by environment shaping that has not been previously investigated in design literature. The work also demonstrates that strategy selection follows the risk dominance equilibrium selection criterion and that changes in robustness to coordination failure can be measured with this criterion.

Linear or Non-Linear? Cooperative Game Theory Framework for Weapon Equipment System Contribution Rate Evaluation

Linear or Non-Linear? Cooperative Game Theory Framework for Weapon Equipment System Contribution Rate Evaluation

A Hydroeconomic Simulation-Optimization Framework to Assess the Cooperative Game Theory in Coastal Groundwater Management

AbstractIn this study, a cooperative game theory framework is proposed to investigate how the cooperation of groundwater consumers influences the reduction in environmental damages and benefit the ...

FROM INTERVENTION TO EXIT: AN ANALYSIS OF POST-9/11 US STRATEGIES IN AFGHANISTAN

Following the US exit from Afghanistan, the debate revolves around why US intervention in Afghanistan, the longest and one of the most expensive in its history, has failed in defeating the Taliban and realising a durable state-building. The debate considers endogenous factors that explore US and Taliban strategies and exogenous factors that underline the role of regional and extra-regional actors in determining the outcome of the Afghan conflict. This paper, therefore, focuses on faults and inconsistencies within and across US strategies in Afghanistan, i.e., the use of military force, political settlement, and state-building. It also examines US strategies vis-à-vis conflict in Afghanistan under four US administrations – from Bush to Biden – to ascertain why these strategies proved ineffective. These strategies have been analysed by following the conceptual framework of Game Theory. The paper argues that US strategies for entering Afghanistan were detached from the ground realities, which was the critical factor for its failure to achieve the desired outcome of the conflict. Bibliography Entry Shad, Muhammad Riaz, Sajid Iqbal. 2021. "From Intervention to Exit: An Analysis of Post-9/11 US Strategies in Afghanistan." Margalla Papers 25 (2): 23-34.

Green lemons: overcoming adverse selection in the green bond market

As the green bond market continues to develop and assume a critical role as a post-pandemic vehicle for supporting a balanced economic rebuild and credible transition efforts, policymakers must reassess the current disclosure regime. This paper derives findings from Bayesian games to demonstrate that the prevailing labelling regime for green bonds is susceptible to the adverse selection problem; due to informational asymmetries, allocative inefficiencies arising from capital misallocation to inherently “non-green” bonds may ensue. To prevent the erosion of confidence in the market segment and support the potential of impact finance instruments to affect positive social and environmental change, this paper draws on established game theory frameworks to inform recommendations for policyled solutions to uphold the market’s credibility. These recommendations concern the integration of a regulatory infrastructure, a centralized ongoing audit under an “exogenously costly” regime and the introduction of a clearer course for legal recourse against issuers that mislabel bonds.

A priority-based approach for peer-to-peer energy trading using cooperative game theory in local energy community

The energy sector is undergoing a paradigm shift to integrate the increasing volume of embedded renewable energy generation and create Local Energy Communities (LEC). Peer-to-Peer (P2P) energy trading is an encouraging paradigm used to increase usage of renewable energy, decrease consumers' electricity bills, and provide revenue to prosumers. It also improves the usage of Distributed Energy Resources (DERs) in the smart grid and reduces transmission and distribution losses. However, challenges such as unpredictability and intermittency of DER's may result in instability of P2P energy trading. In our work, we propose a cooperative game theory framework to expedite stable trading algorithms and incentivize individual users. This trading algorithm offers various priorities at each time interval depending on parameters such as geographic location, maximum energy demand, maximum energy generated, and pricing mechanism. We have considered a grand coalition whose objective is to maximize the coalition's social welfare and ensure a win-win approach for both consumers and prosumers. Hence the grand coalition made by the cooperative game is in Nash equilibrium as no peer wants to perform the merge and split from its current location. In the proposed algorithm, LEC includes 100 players (50 prosumers and 50 consumers), a community energy storage system (CES), and 15 Electric Vehicle charging points. The best operational output priority was also evaluated in this work for each time interval with associated distributed solar PV and CES. Results strongly support that using the best suitable priority for each time interval is beneficial rather than having one priority for an entire day. An economic analysis to distribute the revenue generated from the grand coalition in a fair manner is analyzed in this work. From the economic evaluation, it is apparent that prosumers have high revenue, and consumers save electricity bills when using the proposed algorithm.