Prisoner's Dilemma Research Articles

Supply chain structure, debt financing and product market competition

AbstractThis paper studies the interactions of capital structure and product market competition under two supply chain structures: a distribution structure where two competing retailers source from a common supplier and a parallel structure where each retailer sources from a dedicated supplier. The analyses demonstrate that if the retailers have access to external credits, they will borrow more (less), buy more (less), and incur a higher (lower) default probability under a parallel structure than under a distribution structure if the retailers sell substitutes (complements). The retailers' leverage improves the profit of their upstream suppliers and of the channel but improves their own profits only if they sell complements. If they sell substitutes, borrowing makes them worse off, leading to the prisoner's dilemma phenomenon. If only one retailer has access to external credit, then it will enjoy a leadership premium (loss) if the retailers sell substitutes (complements), and this effect trickles up to the upstream supplier of the leveraged retailer under the parallel structure. Thus, the dedicated suppliers will abet the leveraged retailers to compete more aggressively than unleveraged ones. However, the common supplier is independent of their downstream customer's capital structure. These results reveal that the impacts of external credit on the supply chain profitability depend on the stages the supply chain members are in, the degree of product differentiation, the supply chain structure, the uncertainty of demand, and whether the competitor also has access to external credits.

Nation‐states in a Prisoner's Dilemma with climate change: Applying Edith Stein's theory of the state

AbstractTo get a better picture of the relation between nationalism and global environmental problems within the state‐dominated situation, I present the inherent logic of international environmental politics as a version of the famous Prisoner's Dilemma. I argue that the same contingent bonds that relate the members of nations to their respective nation‐states are part of the contemporary difficulty of actually working together for the common good on the international level by creating exclusive feelings of solidarity—the ‘Prisoners’ of the Dilemma. To reveal the experiential background of nation‐states in this situation, I rephrase and apply Edith Stein's theory of the state as a collective entity. Stein was an inter‐war political philosopher who is now mainly read within religious studies and philosophy of mind. As my argument implies, her work also has relevance for further affect nationalism studies.

Cooperative behavior in adolescents: a contribution of empathy and emotional regulation?

This study aims to identify different levels of empathy and emotional regulation along adolescent years and their relationship with cooperative behavior. Eighty healthy males were divided into four age groups: 20 Early Adolescents, 20 Middle Adolescents, 20 Late Adolescents and 20 Adults. Participants responded to empathic and emotional regulation scales, then were assigned to an unknown partner to perform the prisoner's dilemma paradigm. The statistical analyses allowed to distinguish the groups on the basis of the components making up the two scales: scores on the Perspective Taking component were higher for Adults and Late Adolescents participants than for Middle Adolescents and Early Adolescents groups (p < 0.05); scores on the Personal Distress component were higher for Early Adolescents group than for Late Adolescents and Middle Adolescents groups (p < 0.05); scores on the Difficulties engaging in goal directed behavior component were higher for Middle Adolescents and Early Adolescents groups than for Adults group (p < 0.05). We observed differences between groups (p < 0.001) with higher number of cooperation responses in Adults compared to Middle Adolescents (p < 0.05) and Early Adolescents groups (p < 0.001). These findings suggest that the cooperative behavior changes during the different stages of adolescence seem to be related to the development of empathy and emotional regulation components.

Evolution of cooperation on reinforcement-learning driven-adaptive networks.

Complex networks are widespread in real-world environments across diverse domains. Real-world networks tend to form spontaneously through interactions between individual agents. Inspired by this, we design an evolutionary game model in which agents participate in a prisoner's dilemma game (PDG) with their neighboring agents. Agents can autonomously modify their connections with neighbors using reinforcement learning to avoid unfavorable environments. Interestingly, our findings reveal some remarkable results. Exploiting reinforcement learning-based adaptive networks improves cooperation when juxtaposed with existing PDGs performed on homogeneous networks. At the same time, the network's topology evolves from homogeneous to heterogeneous states. This change occurs as players gain experience from past games and become more astute in deciding whether to join PDGs with their current neighbors or disconnect from the least profitable neighbors. Instead, they seek out more favorable environments by establishing connections with second-order neighbors with higher rewards. By calculating the degree distribution and modularity of the adaptive network in a steady state, we confirm that the adaptive network follows a power law and has a clear community structure, indicating that the adaptive network is similar to networks in the real world. Our study reports a new phenomenon in evolutionary game theory on networks. It proposes a new perspective to generate scale-free networks, which is generating scale-free networks by the evolution of homogeneous networks rather than typical ways of network growth and preferential connection. Our results provide new aspects to understanding the network structure, the emergence of cooperation, and the behavior of actors in nature and society.

Cooperation emerged and survived in scale-free networks in co-evolution and betrayer-prevailing circumstances

How did cooperation emerge and persist while betrayal was beneficial for individuals? Previous studies suggested that network reciprocity was a promising explanation. However, these studies usually analyzed cooperation performances of different types of networks separately and/or statically, thus failing to fully capture the co-evolution and interaction features in our history. We proposed a mechanism that analyzed the cooperation level of different types of networks under co-evolutionary circumstances of cooperation and heterogeneous networks. The paper adopted the prisoner's dilemma game and analyzed Erdos-Renyi (ER) random networks, Watts Strogatz (WS) small-world networks, and Barabasi-Albert (BA) scale-free networks. In this study, these networks were interconnected and continuously grew after gaming evolutions were stable. And the growth versions of WS and ER respectively were proposed that maintained their topology features. Comprehensive experimental results showed that high-level cooperation emerged and was maintained in scale-free networks. This advantage was strengthened with networks grew from a small scale to a middle scale. Moreover, once most nodes of a scale-free network evolved to be cooperators, the group cooperation they formed were able to survive in betrayer-prevailing and high betrayal temptation environments. These findings may deepen our understanding of the relationship between how cooperation evolved and why many social networks exhibited scale-free properties.

The universal probabilistic reward based on the difference of payoff realizes the evolution of cooperation

Many previous studies regarding the theoretical models of social dilemmas have described that rewarding opponents can help players to cooperate with each other. Those studies deal with reward not for defectors, but for cooperators. However, many prior researches concerning punishment that is also considered to be necessary for the evolution of cooperation discuss punishment on cooperators as well as defectors. Considering the group level, defectors who have too much payoff due to many cooperators around them will lose their superiority over cooperators by rewarding not only cooperators but also defectors surrounding them. As a result, cooperation among players can be realized.Therefore, this study proposes the new universal probabilistic reward based on the difference of payoff, where the greater the payoff of each player is, the higher the probability of giving reward to their opponents becomes regardless of the strategy of their opponents. This paper shows that by introducing the reward of this study into the framework of the spatial prisoner's dilemma game utilized in previous studies, the high-level evolution of cooperation can be achieved especially in both the relatively sparse regular and scale-free topology of connections. In addition, the programming method utilized to construct the simulator for this study will serve as teaching materials for specialized education at Kanagawa Institute of Technology.

The causal effect of cultural identity on cooperation

The impact of culture on non-kin cooperation has been singled out as critical for economic activity. However, causal evidence of culture's influence on cooperation remains scant. In this paper we provide such evidence, focusing on two key components of culture: preferences and beliefs. Adopting the view that culture is one aspect of an individual's multi-faceted self-concept (identity) we conduct a Prisoner's Dilemma experiment with first- and second-generation Chinese immigrants at a large US public university. In a two-by-two design, we exogenously vary: i) the salience of participants' American or Chinese cultural identities; and ii) the capacity for culture to affect beliefs by randomly providing previous-session cooperation-rate information. Comparing behavior across cultures and information conditions, our results suggest a prominent role for both preferences and beliefs.

A Duopolistic Analysis of CEO Competitive Aggressiveness with R&amp;D Investment

While chief executive officer (CEO) competitive aggressiveness can be frequently observed in competitive industries with heavy R&amp;D (research and development) investment, studies on its impact on R&amp;D strategies and hiring strategies for competing firms are rare. This article builds a Cournot-based game model to examine this issue and obtain many novel findings in a competitive duopolistic market. In particular, compared with two firms hiring noncompetitive CEOs, hiring competitive CEOs may hinder rather than stimulate R&amp;D investment when the aggressiveness of competitive CEOs remains relatively weak. Our analysis reveals that despite conflicting interests, firms may choose to hire competitive CEOs. Specifically, when competitive CEOs’ aggressiveness is rather low, both firms hire competitive CEOs to gain an output advantage; otherwise, they hire different types of CEOs to avoid head-to-head competition. A prisoner dilemma occurs when two firms choose competitive CEOs because they would be better off when hiring noncompetitive CEOs. Then, although the presence of competitive CEOs always improves total industry output, bilateral competition brings about the lowest total industry profit because fierce output competition substantially reduces prices. Interestingly, unilateral competition enhances total industry profit when the aggressiveness of competitive CEOs remains rather strong. Finally, this study shows that the endogenous aggressive nature of competitive CEOs does not qualitatively alter these main results.

Repeated prisoner's dilemma games in multi-player structured populations with crosstalk

Crosstalk represents a ubiquitous phenomenon in which strategic moves made in one game can influence actions in another. Reiter et al. [1] first integrated crosstalk with the repeated prisoner's dilemma model in structured populations. We extend their strategic space from one-step reactive strategies that consider only the actions of the opponent to memory-one strategies that consider the actions of both parties. We explore the cooperation rate of some representative memory-one strategies in repeated prisoner's dilemma games for multi-player structured populations when crosstalk exists, and focus on finding evolutionarily stable strategies that are cooperative in the memory-one strategy space under the impact of crosstalk. Simulation results in the strategic dynamics show that appropriately forgiving defection is conducive to cooperative stability in the population when crosstalk exists. Specifically, for strategies that can promote cooperation, there is a mutual restriction between tolerating the behavior of both defecting (the focused player and his opponent both defecting, DD) and forgiving unilateral defecting (the focused player cooperating while his opponent defecting, CD). That is, a more forgiving behavior of CD requires a lower tolerance for DD, while a higher tolerance of DD requires a less forgiving behavior of CD. Notably, we find two effective strategies, namely, Win-Stay-Lose-Shift (WSLS) and Firm‑but-Fair (FBF) in the facilitation of cooperation in game dynamics with crosstalk. Moreover, we reveal that the structured population can better suppress the negative impact of crosstalk on cooperation. This investigation provides complementary insights into the interplay between strategic decision-making and the influence of crosstalk within the context of memory-one strategies.

THE RELATIONSHIP BETWEEN MONETARY AND FISCAL POLICY AUTHORITIES ON INFLATION STABILITY

This paper attempts to study the collaboration between fiscal and monetary policy in a game-theoretic approach. The significant nature of coordination between these two policymakers is essential to the growth of any economic, holding to the facts that certain decisions taken by one institution may have devastating effects on the other institution, by resulting in loss of social welfare of the citizens of that nation. In this logic, this paper derived optimal monetary and fiscal policies in one context of coordination or form of interaction using the Two-stage game with complete and perfect information in normal-form representation of the prisoners dilemma: when the two institutions minimize their losses by only taking into account their objectives or responsibilities they owed to the society, formulation of solution known as the Nash equilibrium solution; when an institution moves first in pursuance of the objectives in improving the social welfare and the other follows, in a mechanism known as the optimal solution; when institutions behave cooperatively, seeking common goals. Like in the case Brazilian economy, the two institutions simultaneously demonstrated coordination at the level were both the monetary and fiscal authorities choose the (4, 4) as the optimal point in stabilizing inflation and output remains at its maximum level, that a minimal loss is found when there is a Nash equilibrium, particularly when monetary policy is the leader of the economy and fiscal policy follows. KEYWORDS: Fiscal and Monetary Policy, Game Theory, Nash Equilibrium, Stackelberg Equilibrium, Cooperation.

Delivery arrangement in online distribution channels under different power structures

Logistics delivery is a critical but costly operation in e-commerce. The e-retailer who sells products online may ask the supplier to ship products to customers, and the supplier responds by accepting or rejecting such a delivery proposal. Motivated by these observations, we consider an online distribution channel with two competing suppliers and one common e-retailer and analytically characterize the equilibrium delivery arrangement based on the nonlinear delivery cost in the E-retailer-Stackelberg, Supplier-Stackelberg, and Vertical-Nash games. Our analysis reveals that the market follower might be more willing to deliver products than the market leader in each Stackelberg game. Counterintuitively, the e-retailer prefers undertaking the delivery when there is a large delivery diseconomy under each power structure but prefers asking both suppliers to deliver products when there is a delivery economy (a small delivery diseconomy) in the E-retailer-Stackelberg and Vertical-Nash games (Supplier-Stackelberg game). The suppliers agree to ship products only when the delivery economy is apparent in the E-retailer-Stackelberg game but reject to do so in the Vertical-Nash game; in the Supplier-Stackelberg game, they accept the delivery proposal even though there is a significant delivery diseconomy. Although both suppliers can benefit from refusing to undertake the delivery when there is fierce competition in each Stackelberg game, interestingly, they still agree to do so and trap themselves in a prisoner's dilemma. In each Stackelberg game, only shifting the delivery responsibility to the suppliers might achieve a triple-win situation for the channel members, consumers, and society; in the Vertical-Nash game, however, this situation never occurs, and the consumer surplus and social welfare are invariant to the delivery arrangement.

New memory-one strategies of the Iterated Prisoner’s Dilemma: a new framework to programmed human-AI interaction

With the rapid and continuing development of AI, the study of human-AI interaction is increasingly relevant. In this sense, we propose a reference framework to explore a model development in the context of social science to try to extract valuable information to the AI context. The model we choose was the Prisoner Dilemma using the Markov chain approach to study the evolution of memory-one strategies used in the Prisoner’s Dilemma in different agent-based simulation contexts using genetic algorithms programmed on the NetLogo environment. We developed the Multiplayer Prisoner’s Dilemma simulation from deterministic and probabilistic conditions, manipulating not only the probability of communication errors (noise) but also the probability of finding again the same agent. Our results suggest that the best strategies depend on the context of the game, following the rule: the lower the probability of finding the same agent again, the greater the chance of defect. Therefore, in environments with a low probability of interaction, the best strategies were the ‘Always Defect’ ones. But as the number of interactions increases, a different strategy emerges that is able to win Always Defect strategies, such as the Spiteful/grim. In addition, our results also highlight strategies that emerge in situations in which Spiteful/grim and Always Defect were banned. These are memory-one strategies with better performance than both TFT and PAVLOV under all conditions showing behaviors that are particularly deceiving but successful. The previously memory-one strategies for the Prisoner Dilemma represent a set of extensively tested strategies in contexts with different probability of encountering each other again and provide a framework for programming algorithms that interact with humans in PD-like trusted contexts.

Individualistic attitudes in Iterated Prisoner's Dilemma undermine evolutionary fitness and may drive cooperative human players to extinction.

Inarguably, humans perform the richest plethora of prosocial behaviours in the animal kingdom, and these are important for understanding how humans navigate their social environment. The success and failure of strategies human players devise also have implications for determining long-term socio-economic/evolutionary fitness. Following the footsteps of Press and Dyson (2012), I implemented their evolutionary game-theoretic modelling from Iterated Prisoner's Dilemma (a behavioural economic probe of interpersonal cooperation) and re-analysed already published data on human proposer behaviour in the Ultimatum Game (a behavioural economic probe of altruistic punishment) involving 50 human participants versus stochastic computerized opponents with prosocial and individualistic social value orientations. Although the results indicate that it is more likely to break cycles of mutual defection in ecosystems in which humans interact with individualistic opponents, analysis of social-economic fitness at the Markov stationary states suggested that this comes at an evolutionary cost. Overall, human players acted in a significantly more cooperative manner than their opponents, but they failed to overcome extortion from individualistic agents, risking 'extinction' in 70% of the cases. These findings demonstrate human players might be short-sighted, and social interactive decision strategies they devise while adjusting to different types of opponents may not be optimal in the long run.

Game Analysis on Line Self-Reliance Pricing in Foreign Trade

At present, a prominent phenomenon in China's economic life is the coexistence of price war and line self-reliance pricing. The price cartel formed by the homogeneous enterprises participating in export from China shows that the result of the behavior of pursuing profit maximization of export enterprises is bound to fall into the "prisoner's dilemma" . In the absence of external coercion enterprises can depend on each other still can not get out of the dilemma; If the promised action of the penalty clause can be trusted then there will be a cooperative equilibrium; Advantageous firms can also promote the emergence of cooperative equilibrium.

Package-type strategies and packaging's carbon reduction decisions in the take-out industry

Using environmentally friendly packaging (E-packaging) instead of non-environmentally friendly packaging (N-packaging) can mitigate pollution and reduce carbon emissions. However, the market penetration rate of E-packaging is low, and the packaging carbon reduction level is uneven. This study uses game theory models to examine the factors affecting packaging carbon reduction levels and fees as well as firms' package-type decisions. First, we obtain the optimal solutions for packaging manufacturers and firms when they use different types of packaging under monopoly and competition, respectively. We find that green competition reduces the carbon reduction level of E-packaging, whereas price competition can increase it under certain conditions. The unit manufacturing cost of N-packaging and cost coefficient of carbon reduction are critical considerations for package-type decisions. When the unit manufacturing cost of N-packaging is low and the cost coefficient is large, no firm uses E-packaging. We also demonstrate that firms in a competitive market may become trapped in a prisoner's dilemma after making package-type decisions. Interestingly, we show that the firms' package-type decisions can hurt consumers and welfare under certain conditions, depending on the N-packaging's unit manufacturing cost and pollution damage factor. Our findings provide insights for packaging manufacturers, firms, and environmental regulatory agencies, and can help promote E-packaging.

COMMUNICATION STRATEGIES IN THE MANAGEMENT OF SOCIO-CULTURAL ACTIVITIES: ANALYSIS AND OPTIMIZATION OF THE IMPACT OF GLOBALIZATION ON REGIONAL DEVELOPMENT IN UKRAINE

This study investigates into the complex interplay among communication strategies, globalization, and socio-economic factors within the context of regional development, with a specific focus on Ukraine. Employing a mixed-methods approach, it seeks to investigate the profound impact of effective communication strategies on socio-cultural management and their contribution to regional growth in the era of globalization. The study combines quantitative data from regional development reports with stakeholders across various Ukrainian regions. A theoretical model, based on game theory and the Prisoner's Dilemma, is employed to examine strategic choices in communication, globalization integration, socioeconomic focus, infrastructure development, and cultural initiatives.Through an extensive analysis combining quantitative data derived from regional development reports with insights from stakeholders representing diverse Ukrainian regions, this research reveals that cooperative communication strategies, characterized by robust engagement, a balanced approach to globalization, equitable socio-economic development, strategic infrastructure investment, and active promotion of cultural initiatives, yield the most favourable outcomes for regional development.The key takeaway from this study is the paramount significance of inclusive and participatory approaches, effective communication strategies, and harmonious integration of globalization to foster sustainable regional development. Notably, tailored communication strategies exhibit a significant correlation with the success of socio-cultural initiatives, consequently exerting a positive influence on regional development. These encompass community engagement, cultural sensitivity, and adaptive information dissemination. In conclusion, comprehending and optimizing communication strategies emerge as critical imperatives for harnessing the benefits of globalization in the realm of regional development in Ukraine and analogous contexts.

Personalized pricing versus showrooming: competition between online and offline retailers

AbstractThis study examines how personalized pricing affects customers’ showrooming behavior in the duopoly competition with horizontal product differentiation between traditional and online retailers. For the available personalized pricing strategies, we obtained the optimal decisions for both retailers in the scenarios with and without showrooming. Our results indicate that adopting personalized pricing under particular conditions enables each retailer to be more profitable, even in the presence of showrooming purchases. This finding explains why an increasing number of online and offline retailers have implemented personalized pricing based on technical means and consumer purchase records. It is also demonstrated that personalized pricing can counter showrooming behavior of consumers amidst the competition between both retailers, which provides a novel theoretical basis for dealing with cross‐channel shopping in multichannel retail competition. We further clarify how retailers can avoid being trapped in a prisoner's dilemma when both sides have access to personalized pricing. Also, the adoption of personalized pricing can improve consumer surplus and social welfare.

Evolution of cooperation in deme-structured populations on graphs.

Understanding how cooperation can evolve in populations despite its cost to individual cooperators is an important challenge. Models of spatially structured populations with one individual per node of a graph have shown that cooperation, modeled via the prisoner's dilemma, can be favored by natural selection. These results depend on microscopic update rules, which determine how birth, death, and migration on the graph are coupled. Recently, we developed coarse-grained models of spatially structured populations on graphs, where each node comprises a well-mixed deme, and where migration is independent from division and death, thus bypassing the need for update rules. Here, we study the evolution of cooperation in these models in the rare-migration regime, within the prisoner's dilemma. We find that cooperation is not favored by natural selection in these coarse-grained models on graphs where overall deme fitness does not directly impact migration from a deme. This is due to a separation of scales, whereby cooperation occurs at a local level within demes, while spatial structure matters between demes.

Cooperation transitions in social games induced by aspiration-driven players.

Cooperation and defection are social traits whose evolutionary origin is still unresolved. Recent behavioral experiments with humans suggested that strategy changes are driven mainly by the individuals' expectations and not by imitation. This work theoretically analyzes and numerically explores an aspiration-driven strategy updating in a well-mixed population playing games. The payoffs of the game matrix and the aspiration are condensed into just two parameters that allow a comprehensive description of the dynamics. We find continuous and abrupt transitions in the cooperation density with excellent agreement between theory and the Gillespie simulations. Under strong selection, the system can display several levels of steady cooperation or get trapped into absorbing states. These states are still relevant for experiments even when irrational choices are made due to their prolonged relaxation times. Finally, we show that for the particular case of the prisoner dilemma, where defection is the dominant strategy under imitation mechanisms, the self-evaluation update instead favors cooperation nonlinearly with the level of aspiration. Thus, our work provides insights into the distinct role between imitation and self-evaluation with no learning dynamics.

Bilateral negotiation facilitates stable coexistence of cooperation with defection in Prisoner's Dilemma game

We explore the effect of bilateral negotiation, a common means to resolve conflicts, on the stable coexistence of cooperation with defection, a phenomenon that occurs frequently in nature and human society but lacks a scientific explanation so far. To model how individuals negotiate, we define two negotiable strategies: the negotiable cooperation strategy and the negotiable defection strategy. By investigating the replicator dynamics of the Prisoner's Dilemma game with these negotiable strategies in infinite populations, cooperators and defectors may coexist stably only in a bilaterally-negotiating Prisoner's Dilemma game that includes all negotiable strategies. Moreover, we define the defection temptation as individuals' willingness to gamble for higher payoffs in a game and show that bilateral negotiation can diminish the defection temptation. Importantly, the bilaterally-negotiating Prisoner's Dilemma game's defection temptation being positive is the necessary and sufficient condition for stable coexistence, implying that bilateral negotiation can help cooperators coexist with defectors even when defection is tempting in the current game. In the stable coexistence equilibrium, the frequency of negotiable cooperators increases with their relative negotiation ability.