Maximum Payoff Research Articles

Help, harm or avoid? On the personal advantage of dispositions to cooperate and punish in multilateral PD games with exit

Simulated round-robin tournaments are used (1) to assess the relative performance of non-defecting, conditionally cooperative programs in a three-person PD setting where exit is possible (PDEs) and (2) to assess the importance of sanctions for the success of joint enterprises. We find that the possibility of exit allows individuals to escape from dysfunctional teams which increases the potential benefits of cooperation while reducing those associated with free-riding. We also find that punishment, especially targeted punishment, is critical to the success of shorter term enterprises. Similar results held in evolutionary settings where successful behavioral programs can be imitated, or propagated by non-rational biological or social processes. Our results suggest that non-defecting programs of conditional cooperation can be rational, average payoff maximizing, strategies for participating in small multilateral settings where individuals can choose to participate in a PD game or not.

Evolution of unplanned coordination in a market selection game

This paper examines the evolution of unplanned coordination among independent agents in a market selection game, which is a noncooperative repeated game with many agents and several markets. Every agent is supposed to simultaneously choose a single market for maximizing its own payoff obtained by selling its product at the selected market. It is assumed that the market price is determined by the total supply of products. For example, if many agents choose a particular market, the market price at that market is low. The point of the market selection is to choose a market that is not chosen by many other agents. In this paper, game strategies are genetically updated by localized selection and mutation. A new strategy of an agent is probabilistically selected from its neighbors' strategies by the selection operation or randomly updated by the mutation operation. It is shown that the maximization of each agent's payoff leads to the unplanned coordination of the market selection where the undesired concentration of agents is avoided. The unplanned coordination is compared with the planned global coordination obtained by the maximization of the total payoff over all agents.

Naive Reinforcement Learning With Endogenous Aspirations

This article considers a simple model of reinforcement learning. All behavior change derives from the reinforcing or deterring effect of instantaneous payoff experiences. Payoff experiences are reinforcing or deterring depending on whether the payoff exceeds an aspiration level or falls short of it. Over time, the aspiration level is adjusted toward the actually experienced payoffs. This article shows that aspiration level adjustments may improve the decision maker's long‐run performance by preventing him or her from feeling dissatisfied with even the best available strategies. However, such movements also lead to persistent deviations from expected payoff maximization by creating ‘probability matching’ effects.

The egalitarian solution for convex games: some characterizations

The egalitarian solution for TU-games as introduced by Dutta and Ray [Dutta, B., Ray, D., 1989. A concept of egalitarianism under participation constraints, Econometrica 57, 615–635] is studied. Five characterizations of the restriction of this solution to the class of convex games are given. They all involve a stability property due to the concept of the equal division core from Selten [Selten, R., 1972. Equal share analysis of characteristic function experiments. In: Sauermann, H. (Ed.), Beiträge zur experimentellen Wirtschaftsforschung, Vol. 3, J.C.B. Mohr, Tübingen, pp. 130–165] and all but the third characterization involve a property restricting maximum payoffs. The first two characterizations use in addition efficiency and the reduced game properties of Hart and Mas-Colell [Hart, S., Mas-Colell, A., 1989. Potential, value and consistency. Econometrica 57, 589–614] and Davis and Maschler [Davis, M., Maschler, M., 1965. The kernel of a cooperative game. Naval Research Logistics Quarterly 12, 223–259], respectively. The fourth and fifth characterization only need in addition weak variants of the reduced game properties mentioned above. The third characterization involves besides the stability condition, efficiency and a new consistency property.

Evolution of Interdependent Preferences in Aggregative Games

We study the evolution of preference interdependence in aggregative games which are symmetric with respect to material payoffs but asymmetric with respect to player objective functions. We identify a class of aggregative games whose equilibria have the property that the players with interdependent preferences (who care not only about their own material payoffs but also about their payoffs relative to others) earn strictly higher material payoffs than do the material payoff maximizers. Implications of this finding for the theory of preference evolution are discussed. Journal of Economic Literature Classification Numbers: C72, D62.

Learning and decision costs in one-person games

This paper reports the results of a two-part data analysis of learning in a repeated costly decision experiment. In the first part we test payoff dominance under the hypothesis of expected payoff maximization. We utilize a dynamic probability distribution over decisions for each player, characterizing what each player has learned about the payoff function by the moments from these distributions. In the second part, we test the hypothesis of expected payoff maximization for players in each treatment group. Expected payoff maximization is supported but payoff dominance is not. Copyright © 1999 John Wiley & Sons, Ltd.

Efficiency and income redistribution in the single-peaked preferences model with several commodities

We consider the problem of allocating m infinitely divisible commodities among agents with single-peaked preferences. We propose a variation on the Mas–Colell’s Walrasian solution with slacks to characterize the efficient allocations. Our solution allows us to associate with each efficient allocation an income redistribution. We prove that the original solution proposed by Mas–Colell is the efficient selection which requires an income redistribution where the maximum payoff and the maximum subsidy are smallest. This generalizes a derivation of the Uniform Rule by Schummer and Thomson.

Diagnostic accuracy of salivary scintigraphic indices in xerostomic populations.

Three decades of work to enhance the diagnostic accuracy of salivary scintigraphy have generated various plausible decision criteria. This study evaluates four commonly cited numeric indices in studies of xerostomic populations and how accurately they identify Sjögren's syndrome, chronic sialadenitis, radiation sialadenitis, and drug effects and distinguish each from the other. Stimulated dynamic salivary scintigraphy was performed on 295 xerostomic patients and on 31 controls. The nonparametric area under the receiver operating characteristic curves expressed the diagnostic accuracy of the following scintigraphic indices: the parotid:submandibular ratio of unstimulated glandular activity, the peak:baseline uptake ratio, its time of occurrence, and the stimulated excretion fraction. The stimulated excretion fraction distinguished Sjögren's syndrome and radiation sialadenitis from healthy states with respective accuracies of 0.78 and 0.90. The maximum diagnostic payoff in Sjögren's syndrome occurred at a cutoff of 73%, yielding a 73% rate of test sensitivity and a 73% rate of specificity. The other three indices were not useful. Even the stimulated excretion fraction performed indifferently or poorly in most other diagnostic tasks. In the scintigraphic examination of xerostomic and healthy populations, an acceptable diagnostic utility of the stimulated excretion fraction was evident only in Sjögren's syndrome and radiation sialadenitis. When presented with differential diagnostic alternatives not involving radiation sialadenitis, none of the four numeric indices performed acceptably.

Stackelberg reasoning in mixed-motive games: An experimental investigation

The Stackelberg heuristic is a simulation heuristic in which a player optimizes against best-reply counterstrategies, and a game is Stackelberg-soluble if the resulting Stackelberg strategies are in equilibrium. To test the hypothesis that players use this heuristic in Stackelberg-soluble games, 100 subjects played all 12 ordinally non-equivalent 2 × 2 games, nine of which (including Prisoner's Dilemma and Stag Hunt) were Stackelberg-soluble and three (including Battle of the Sexes and Chicken) of which were non-Stackelberg-soluble. Subjects significantly preferred Stackelberg strategies in Stackelberg-soluble games, and a protocol analysis of stated reasons for choice showed that joint payoff maximization and strategic dominance were given as reasons significantly more frequently in Stackelberg-soluble than in non-Stackelberg-soluble games. PsycINFO classification: 2340

Noncooperative foundations for the kalai-smorodinsky and equal sacrifice solutions via prominence structures

In bargaining, players may adopt different prominence structures when making demands: (i) each player might use (1/N)th of his maximum monetary payoff as the prominence level or (ii) players might use a common prominence level. This paper considers a scheme in which players alternate making demands. It turns out that if the prominence levels described by (i) are used and if players have utilities linear in money, the outcome of this scheme converges to that of the Kalai-Smorodinsky solution as players' prominence levels get smaller. If the common prominence level of (ii) is used and if players have identical constant marginal utilities of money, the outcome of this scheme converges to that of the equal sacrifice solution as that prominence level gets smaller.

A New Keynesian Model of Policy Irrelevance

Of the developments in macro theory of the last thirty years, few have been as far-reaching as the introduction of rational expectations, in particular to the study of how discretionary use of monetary policy by central bankers affects output and employment. By ascribing rational expectations to private agents, Lucas [11], Kydland and Prescott [10], Barro and Gordon [6], Alesina and Tabellini [1], Rogoff [16], and a host of others have demonstrated examples in which agents who understand the motives of the monetary authority will correctly anticipate the monetary authority's actions and render them ineffective in affecting any real variables. In these models, it is only the innovations in monetary policy which private agents could not forecast that had any real effects systematic use of the tools of monetary policy to achieve an end were ineffective. Typically, these models represented the economy as a reduced form game, in which the payoffs to private agents depended on the realizations of actions of the monetary authority, agents' forecasts of those actions, and random shocks imposed by nature. It was understood, if not always explicitly stated, that some general equilibrium model existed whose equilibrium outcomes generated the payoff functions of the game. The goal of the monetary authority was to alter the outcome of the game away from the non-cooperative equilibrium towards some other outcome which was not consistent with autarkic payoff maximization but superior to the non-cooperative outcome. Each individual agent would maximize his payoff by correctly anticipating the monetary authority's move. In the aggregate, the result would be that the monetary authority's action would be rendered ineffective.

Optimal battery energy storage system (BESS) charge scheduling with dynamic programming

A dynamic programming algorithm for the optimal charge/discharge scheduling of BESS energy storage is presented. It ensures the minimisation of the electricity bill for a given battery capacity, while reducing stress on the battery and prolonging battery life. Optimal scheduling of the battery charge state is in itself unique; the methods of multipass dynamic programming are used to accomplish this. Maximum payoff for load redistribution and peak load shaving is determined while accounting for charging rate, battery voltage fluctuation and internal losses as a function of charge state. The optimal charging curve is significantly different from the curve conventionally published for BESS.

Integration of Magnetic Bearings in the Design of Advanced Gas Turbine Engines

Active magnetic bearings provide revolutionary advantages for gas turbine engine rotor support. These advantages include tremendously improved vibration and stability characteristics, reduced power loss, improved reliability, fault tolerance, and greatly extended bearing service life. The marriage of these advantages with innovative structural network design and advanced materials utilization will permit major increases in thrust-to-weight performance and structural efficiency for future gas turbine engines. However, obtaining the maximum payoff requires two key ingredients. The first is the use of modern magnetic bearing technologies such as innovative digital control techniques, high-density power electronics, high-density magnetic actuators, fault-tolerant system architecture, and electronic (sensorless) position estimation. This paper describes these technologies and the test hardware currently in place for verifying the performance of advanced magnetic actuators, power electronics, and digital controls. The second key ingredient is to go beyond the simple replacement of rolling element bearings with magnetic bearings by incorporating magnetic bearings as an integral part of the overall engine design. This is analogous to the proper approach to designing with composites, whereby the designer tailors the geometry and load-carrying function of the structural system or component for the composite instead of simply substituting composites in a design originally intended for metal material. This paper describes methodologies for the design integration of magnetic bearings in gas turbine engines.

The “Spite” Dilemma in Voluntary Contribution Mechanism Experiments

This article explains deviations from formal expectations regarding choice behavior in settings where economic rationality (i.e., own payoff maximization) dictates either cooperating (full contribution) or free riding (no contribution) in the provision of public goods via the voluntary contribution mechanism. The authors find that the difference between full contribution and the observed level of contribution is greater than or equal to the corresponding difference when free riding is the best strategy. This surprising result is interpreted as the “spiteful” behavior of subjects whose first priority is not the total amount of payoff they receive but the ranking among them.

On the game-theoretic modeling of hierarchical decision-making

An interaction between the superior and the subordinate is interpreted as a two-person hierarchic game where the superior structures the game using his authority in the hierarchy. Within this framework it is shown that the superior achieves socially optimal levels of output. However, the introduction of uncertainty into the hierarchic framework generally reduces the maximum guaranteed payoff of the superior as compared to the case of hierarchical games with complete information.

TO WAIT OR TO RESPOND?

Emitting a certain response and waiting for a specified time without making that response had the same consequence. In Experiment 1, food-deprived pigeons were as likely to wait as to respond only if waiting provided food at a much higher frequency than did pecking. In Experiment 2, the consequence for humans was a brief light flash and tone. People were not biased for responding over waiting. Instead, their choices suggested crude payoff maximization. In Experiment 3, pigeons again obtained food, but they were not food deprived and could eat freely at each opportunity. Their behavior was more like that of the humans of Experiment 2 than that of food-deprived pigeons given small quantities of food at each feeding opportunity. The three experiments together showed that biases for responding over waiting were neither inherent characteristics of species nor inevitable outcomes of particular schedules. Choice between active search and waiting depended on ecological-motivational factors even when species and schedules were held constant.

Optimal Learning by Experimentation

This paper considers a problem of optimal learning by experimentation by a single decision maker. Most of the analysis is concerned with the characterisation of limit beliefs and actions. We take a two-stage approach to this problem: first, understand the case where the agent's payoff function is deterministic; then, address the additional issues arising when noise is present. Our analysis indicates that local properties of the payoff function (such as smoothness) are crucial in determining whether the agent eventually attains the true maximum payoff or not. The paper also makes a limited attempt at characterising optimal experimentation strategies.

Computation of the maximum guaranteed payoff in dynamic models of conflict situations

The conflict situations in question are described by repeated two-person bimatrix games. The problem is to determine the maximum guaranteed payoff to the first player. A numerical algorithm computing the solution is constructed and implemented as a program.

Flight service evaluation of thermal barrier coatings by physical vapor deposition at 5200 H

Thermal barrier coatings (TBC) have the potential to improve the performance of jet engines and have been used in combustors for over 15 years. However, it is only recently that they have been actively used in the harsh turbine environment on nozzle guide vane platforms. It is now intended to use TBCs on turbine vane airfoils and rotating blades where the maximum payoff will be realized. Much work has been done in the last six years towards this goal. This report will review one such Rolls-Royce program; flight service evaluation of TBCs. It will demonstrate that some TBC systems can survive in the turbine environment for over 16 000 h, but that particulate erosion could be a problem. It will review the service condition of vanes with TBCs applied by physical vapor deposition, and will demonstrate some of the advantages over plasma sprayed coatings such as: (1) longer thermal cycle lives, (2) smoother surface finishes, (3) better surface finish retention, (4) superior erosion resistance.

Incentive compatible strategies for general stackelberg games with incomplete information

We study Stackelberg games with incomplete information in a general setting. In particular, we deduce the follower's reaction function, a set-valued function of the leader's action choice and a parameter specifying the follower's payoff type (a parameter about which the leader has only incomplete information), and using a generalized version of Komlos' Theorem due to Balder (1987), we show the existence of an expected payoff maximizing, incentive compatible strategy for the leader given the follower's reaction function.