Theory Of Social Situations Research Articles

The stable set of the social conflict game with commitments: existence, uniqueness, and efficiency

We investigate the stable sets of social conflict games by employing the framework of the (abstract) system by Greenberg (Theory of social situations: an alternative game theoretic approach. Cambridge University Press, Cambridge, 1990). The social conflict game is a class of strategic games that includes the prisoners’ dilemma and the chicken game. We first show that the stable set generally fails to exist in a system that is directly derived from the social conflict game. In this system, the stable set exists if and only if the strong equilibrium exists in the underlying game. If the stable set exists, it coincides with the set of the strong equilibria that is equivalent to the core for the system. Then, we turn to a modified system where the players are allowed to make commitments. In the system with commitments, the stable set always exists, and it consists of efficient outcomes with a certain property. We also discuss the relationship between the core and the stable set for the system with commitments.

Game theory: Applications for surgeons and the operating room environment

Game theory is an economic system of strategic behavior, often referred to as the "theory of social situations." Very little has been written in the medical literature about game theory or its applications, yet the practice of surgery and the operating room environment clearly involves multiple social situations with both cooperative and non-cooperative behaviors. A comprehensive review was performed of the medical literature on game theory and its medical applications. Definitive resources on the subject were also examined and applied to surgery and the operating room whenever possible. Applications of game theory and its proposed dilemmas abound in the practicing surgeon's world, especially in the operating room environment. The surgeon with a basic understanding of game theory principles is better prepared for understanding and navigating the complex Operating Room system and optimizing cooperative behaviors for the benefit all stakeholders.

On credible coalitional deviations by prudent players

In this paper we first explore the predictive power of the solution notion called conservative stable standard of behaviour (CSSB), introduced by Greenberg (The theory of social situations, 1990), in environments with farsighted players (as modelled in Xue, Econ Theory 11:603–627, 1998) as intuitively it is quite nice. Unfortunately, we find that CSSB has a number of undesirable properties: most importantly, it makes vacuous predictions for most natural social environments. Therefore, we introduce an intuitive refinement of this solution which we call conservative stable weak predictor. In settings of proper voting games, we explore some existence properties of this new solution and also show that it may not be unique. However, unfortunately, this refinement may also lead to non-intuitive vacuous predictions.

FREE ENTRY, MARKET SIZE, AND THE OPTIMISTIC STABILITY

We examine the long-run outcomes under free entry-exit when each firm not only takes account of the effects of her own entry-exit on the market structure but also takes full account of the effects due to other firms' simultaneous entry-exit. Adopting the framework of the theory of social situations (TOSS), we derive a unique set of stable outcomes, which is based only on two fundamental assumptions of the "firms-as-profit-maximizers" and the "free entry-exit," but not on any specific mode of play (i.e., a specification of how the players make their decisions, take actions within the market, and think of the other players' behavior). We compare the stable outcome with the long-run equilibria under the competitive mode, the Cournot-Nash mode, and the monopolistically competitive mode. We find that (i) each of these equilibria can be compatible with the stable outcome only if the market size is small and (ii) none of them can be compatible with the stable outcome if the market size is sufficiently large; Further, (iii), for almost all market size, the monopolistically competitive equilibrium is compatible with the stable outcome if the elasticity of substitution is sufficiently close to (but, greater than) unity. In a sense, when the market size is sufficiently large, these three modes of play are not consistent with two fundamental assumptions.

Strategic advertising: The fat-cat effect and stability

We use the theory of social situations (TOSS) to examine the stable advertising behavior and pricing. In contrast to the current literature, we show that the incumbent firm need not maintain a hungry-look by under-investing in advertising expenditure in order to deter entry.

Attainability of International Environmental Agreements as a Social Situation

This paper applies the theory of social situations to study whether international environmental agreements (IEAs), mainly those on greenhouse gas emission reductions, can be attained. A game theoretic model is generally a black box for decision makers, where the mechanisms, which lead to solution(s) of the game, are not explicitly pointed out. This paper opens this black box by making the (institutional) move rules explicit. The usual pessimistic outcome with an ineffective and small size of stable coalitions among world regions is countered. Our model challenges conventional wisdom in the sense that large coalitions are possible outcomes of the cartel game, namely by incorporating: (1) farsightedness, and (2) coalitional moves with commitment as an alternative to myopic and individual moves which characterise the cartel game. We show that even if the international negotiations on climate change mitigation are modelled as an n-person prisoner's dilemma, one cannot rule out cooperation among world regions as a solution of the game. Indeed, in most analysed situations the grand coalition is among the solutions of the game. This shows that predictions based on cartel stability may be too pessimistic if it comes to analysing incentives to cooperate in implementing international environmental policy. Moreover, in an empirically calibrated model, we find three out of six instances where Russia (with or without the US) has an incentive to sign the Kyoto protocol.

Extending communication-proof equilibrium to infinite games

The concept of Communication-proof equilibrium is extended to infinite games. To that end we make use of abstract stable sets as defined by Greenberg in his Theory of Social Situations.

Individual and Collective Time-Consistency

This paper reconsiders the Strotz-Pollak problem of consistent planning and argues that a solution to this problem requires a refinement of subgame-perfectness. Such a refinement is offered through an analysis based on Greenberg's theory of social situations. The properties of this refinement are investigated and illustrated. A unifying framework is presented whereby consistent one-person planning as a problem of individual time-consistency and renegotiation-proofness as a problem of collective time-consistency are captured through the same general concept.

Insurance monopoly and renegotiation

The mechanism design problem of a monopoly insurer — faced with privately informed insurees — is considered. It is assumed that the insurer cannot commit not to renegotiate (by using the information that customer separation reveals) before contracts are put into force. A solution is offered by modeling renegotiation-proofness in a framework inspired by Greenberg's theory of social situations. Maximizing profit within the set of renegotiation-proof outcomes always leads to a semi-separating outcome (i.e. neither full pooling nor full separation can occur) and may leave all low-risks as well as some of the high-risks self-insured.

SOCIAL NORMS, INFLATION AND STABILIZATION

This study presents a socio-economic game of inflation and distributive conflict where inflation is derived from, and stabilization is implemented via, social norms. We apply the `Theory of Social Situations' (Greenberg 1990) to contrast rational choice outcomes predicted by Nash equilibrium vs those derived as social norms under our normative criteria (von Neumann-Morgenstern stability). We then analyze `heterodox' stabilization policies, which seek to address both the economic and sociological criteria for stabilization. Our conclusion is that social pacts constitute a viable normative approach to stabilization because they address the social conflict underlying chronic inflation in order to derive stabilizing norms.

Reexamination of the International Export Quota Game through the Theory of Social Situations

Reexamination of the International Export Quota Game through the Theory of Social Situations

Optimistic stability in games of perfect information

Abstract I apply the ‘Theory of Social Situations’ (Greenberg, 1990) to a special class of extensive form games of perfect information and without chance moves. I prove the existence of an ‘Optimistic Stable Standard of Behavior’ (OSSB) which is associated with such games. This class includes all n -person discounted sequential bargaining games where a finite set of strictly positive offers can be made at each stage. The derived OSSB yields an appealing selection from among the subgame perfect paths. As is always the case, OSSB is strongly related to the von Neumann and Morgenstern abstract stable sets.

Stability Criteria for Social Norms with Applications to the Prisoner's Dilemma

This article introduces four criteria for characterizing social norms in both cooperative and noncooperative games. The criteria are hybrids of von Neumann and Morgenstern's notion of stability and Greenberg's theory of social situations. When applied to the three-player prisoner's dilemma, these criteria illustrate that Nash and strong Nash equilibrium behavior do not rule out the possibility of unilateral defection as a social norm. We conclude with a new type of equilibrium behavior that induces coalition building and leads to social norms that rule out unilateral defection and allow for cooperation.

Farsighted Coalitional Stability

I define the largest consistent set, a solution concept which applies to situations in which coalitions freely form but cannot make binding contracts, act publicly, and are fully "farsighted" in that a coalition considers the possibility that, once it acts, another coalition might react, a third coalition might in turn react, and so on, without limit. I establish weak nonemptiness conditions and apply it to strategic and coalitional form games and majority rule voting. I argue that it improves on the von Neumann-Morgenstern stable set as it is usually defined but is consistent with a generalization of the stable set as in the theory of social situations. Journal of Economic Literature Classification Numbers: C70, C71.

A strategic aspect of the strong positive association condition

Abstract The purpose of this communication is to provide an explanation for the fact that the ‘monotonicity’, or ‘strong positive association’ condition has played a central role in the theory of implementation. (See definitions below.) The observation presented here is, at least mathematically, straightforward, but I know of no other intuitive reason that was suggested to account for the prominence of this condition. The observation below was noted when I applied my general ‘theory of social situations’ to the implementation problem.