Games on graphs: A minor modification of payoff scheme makes a big difference

Various social dilemma games that follow different strategy updating rules have been studied on many networks.The reported results span the entire spectrum, from significantly boosting,to marginally affecting,to seriously decreasing the level of cooperation.Experimental results that are qualitatively different from theoretical prediction have also been reported.It is widely believed that the results are largely determined by three elements,including payoff matrices of the underlying 2*2 games,the way that the strategic states of the players are updated and the structure of the networks.Here we discuss the impact of a seemly non-essential mechanism -- what we refer to as a "payoff scheme". Specifically, in each round after the states of all of the players are determined,the payoff scheme is how each player's payoff is calculated.In addition to the two conventions in which either the accumulated or the averaged payoff is calculated from playing with all of the neighboring players,we here study the effects of calculating the payoff from pairing up with one random player from among the neighboring players. Based on probability theory, in a situation of uncorrelated events, the average payoff that involves all of the neighbors should,in principal,be equivalent to the payoff from pairing up with one neighbor.However,our simulation of games on graphs shows that, in many cases,the two payoff schemes lead to qualitatively different levels of cooperation.This finding appears to provide a possible explanation for a wide spectrum of observed behaviors in the literature.We have also observed that results from the randomly-pairing-one mechanism are more robust than the involving-all-neighbours mechanism because,in the former case, neither the other three main elements nor the initial states of the players have a large impact on the final level of cooperation compared with in the latter case.Comment: 23 pages,171 figure

English Auctions with toeholds: An experimental study

We run experiments on English Auctions where the bidders already own a part (toehold) of the good for sale. The theory predicts a very strong effect of even small toeholds, however we find the effects are not so strong in the lab. We explain this by analyzing the flatness of the payoff functions, which leads to relatively costless deviations from the equilibrium strategies. We find that a levels of reasoning model explains the results better than the Nash equilibrium. Moreover, we find that although big toeholds can be effective, the cost to acquire them might be higher than the strategic benefit they bring. Finally our results show that in general the seller’s revenues fall when the playing field is uneven.Experiments, toehold auction, takeover, payoff, flatness, quantal response, level-k, LeeX

Green Revolving Fund

A 2012 student-led research project suggesting the University establish a green revolving fund is promising a big payoff to the University in cost savings, innovation, learning opportunities and creating a greener campus

Stop Smoking for New Year\u27s and get a Big Payoff

News release announces that if you stop smoking on New Year\u27s Day and invest your cigarette money, your retirement fund could be anywhere from $66,322 to$884,664 richer

The Big Match in Small Space

In this paper we study how to play (stochastic) games optimally using little space. We focus on repeated games with absorbing states, a type of two-player, zero-sum concurrent mean-payoff games. The prototypical example of these games is the well known Big Match of Gillete (1957). These games may not allow optimal strategies but they always have {\epsilon}-optimal strategies. In this paper we design {\epsilon}-optimal strategies for Player 1 in these games that use only O(log log T ) space. Furthermore, we construct strategies for Player 1 that use space s(T), for an arbitrary small unbounded non-decreasing function s, and which guarantee an {\epsilon}-optimal value for Player 1 in the limit superior sense. The previously known strategies use space {\Omega}(logT) and it was known that no strategy can use constant space if it is {\epsilon}-optimal even in the limit superior sense. We also give a complementary lower bound. Furthermore, we also show that no Markov strategy, even extended with finite memory, can ensure value greater than 0 in the Big Match, answering a question posed by Abraham Neyman

The Interrelation between Audit Quality and Managerial Reporting Choices and Its Effects on Financial Reporting Quality

Two distinct lines of research have been dedicated to empirically testing how financial reporting quality (measured as the earnings response coefficient or ERC) is associated with management's choice of reporting bias and with audit quality. However, researchers have yet to consider how ERCs are affected by either the auditor's reaction to changes in the manager's reporting bias or the manager's reaction to changes in audit quality. Our study provides theoretical guidance on these interrelations and how changes in the manager's or the auditor's incentives affect both reporting bias and audit quality. Specifically, when the manager's cost (benefit) of reporting bias increases (decreases), we find that expected bias decreases, inducing the auditor to react by reducing audit quality. Because we also find that the association between expected audit quality and ERCs is always positive, changes in managerial incentives for biased reporting lead to a positive association between ERCs and expected reporting bias. When the cost of auditing decreases or the cost of auditor liability increases, we find that expected audit quality increases, inducing the manager to react by decreasing reporting bias. In this case, changes in the costs of audit quality lead to a negative association between ERCs and expected reporting bias. Finally, we demonstrate the impact of our theoretical findings by focusing on the empirical observations documented in the extant literature on managerial ownership and accounting expertise on the audit committee. In light of our framework, we provide new interpretations of these empirical observations and new predictions for future research

Social Network Reciprocity as a Phase Transition in Evolutionary Cooperation

In Evolutionary Dynamics the understanding of cooperative phenomena in natural and social systems has been the subject of intense research during decades. We focus attention here on the so-called "Lattice Reciprocity" mechanisms that enhance evolutionary survival of the cooperative phenotype in the Prisoner's Dilemma game when the population of darwinian replicators interact through a fixed network of social contacts. Exact results on a "Dipole Model" are presented, along with a mean-field analysis as well as results from extensive numerical Monte Carlo simulations. The theoretical framework used is that of standard Statistical Mechanics of macroscopic systems, but with no energy considerations. We illustrate the power of this perspective on social modeling, by consistently interpreting the onset of lattice reciprocity as a thermodynamical phase transition that, moreover, cannot be captured by a purely mean-field approach.Comment: 10 pages. APS styl