Trust and Exchange : Effects of Temporal Embeddedness and Network Embeddedness on Providing and Dividing a Surplus

Dissertation of the University of Utrecht Mutually profitable cooperation is characterized by the fact that the combined efforts of the cooperating parties generate a certain surplus. The first part of the book studies the production of a surplus as a trust problem between two actors. Should an actor provide resources if the other actor can decide on the division of the surplus if it materializes? Under which conditions is trust in a reasonable division of the surplus warranted? We study the effects of `temporal embeddedness'. If both actors interact repeatedly, they can learn something about the other actor's trustworthiness from past interactions. And, they can control their relation by facilitating or hampering future exchange in which both actors should be interested. The first part of the book studies the effects of such `temporal embeddedness' on the provision of a surplus between two actors. Hypotheses are derived on the basis of a simple social capital stock model. These hypotheses are tested using experiments as well as survey data. The second part of the book studies the division of a given surplus. We consider the case where actors are embedded in a network structure and connected actors can engage in dyadic negotiations on the division of a surplus. We show how the actors' network embeddedness determines their success in bargaining. We thus provide predictions on the actors' shares of their surpluses from bilateral negotiations with their partners. Further, we specify conditions for a decay of a negotiation structure into substructures by showing that it is sometimes favorable for an actor not to utilize possible negotiation ties. Predictions on the division of a surplus and on `network breaks' are tested using evidence from laboratory experiments.

A Study on Platform's New Strategy in Media 2.0 Era - Based on “Keystone” concept & Google case

The purpose of this paper is to suggest a new strategy of the platform in Media 2.0 era. This goal is approached by firstly examining conceptual change of the platform strategy from mass media world (Media 1.0) to micro media world (Media 2.0). Then, it will discuss "Keystone" strategy by Iansiti & Levien (2004) who introduced four different types of platform and will give an example, Google. The data shows, how Google's keystone strategy could be successfully accomplished with three sources for value creation, revelation, aggregation and plasticity, and how healthy it is in terms of productivity, robustness, and niche creation. Finally, an applicable framework to Media 2.0 will be constructed on the basis sources for value creation and "Keystone" capabilities of ecosystem management. Three main parts of the keystone strategy are the openness, synchronization, and mass customization focus. --Media platform,Keystone,ecosystem

Public good games with incentives

Public good games dienen als Modell für den Konflikt zwischen Allgemeinwohl und individuellem Vorteil: Während der Erfolg eines gemeinschaftlichen Projekts oft vom Einsatz aller Beteiligten abhängt, kann für den Einzelnen der Anreiz zum Trittbrettfahren bestehen. In dieser Dissertation untersuche ich das Zusammenspiel von Kooperation und Anreizsystemen mit Hilfe der evolutionären Spieltheorie. Es wird gezeigt, dass Belohnungen zwar individuelle Kooperation anstoßen können, dass aber Bestrafungsmöglichkeiten notwendig sind um die Zusammenarbeit aufrechtzuerhalten. Dabei liefert die individuelle Reputation der Spieler einen Anreiz, die Einhaltung von Normen zu überwachen und Abweichungen zu sanktionieren. Im Gegensatz zu früheren Studien werden Bestrafungsmechanismen jedoch nicht zur Stabilisierung von beliebigen Normen und Verhaltensvorschriften verwendet. Stattdessen werden Sanktionen gezielt dazu eingesetzt um die soziale Wohlfahrt zu verbessern. In dieser Dissertation stelle ich auch einige mathematischeWerkzeuge und methodische Konzepte vor, die bei der Untersuchung von Public good games hilfreich sind. Dazu wird die Theorie der Rollenspiele erweitert und eine modifizierte Replikatorgleichung eingeführt. Unter dieser lokalen Replikatordynamik können sich selbst dominierte Strategien durchsetzen, falls diese zu einem relativen Vorteil führen.Public good games reflect the common conflict between group interest and self interest: While collaborative projects depend on joint efforts of all participants, each individual performs best by free-riding on the others’ contributions. In this thesis I use evolutionary game dynamics to study the interplay of cooperation and incentives. I demonstrate that rewards may act as a catalyst for individual contributions, while punishment is needed to maintain mutual cooperation. In this process, reputation plays a key role: It helps to mitigate the second-order free-rider problem and prevents subjects from being spiteful. In contrast to previous studies, I do not find that punishment can promote any behaviour (as long as deviations from that norm are punished). Instead, sanctions are targeted at noncooperators only, and lead to stable cooperation. Furthermore, this thesis provides some mathematical tools for the study of public good games with incentives. It extends the theory of role games and it introduces a modified replicator dynamcis that allows to investigate the consequences of local competition. Under this local replicator dynamics, even dominated strategies may prevail if they lead to a relative payoff advantage – which can be considered as a basic model for the evolution of spite

Explicit mathematical models for behavioral science theories

Physical science theories are often expressed as precise mathematical relationships from which researchers can derive empirically testable consequences. Mathematical modeling takes on additional tasks in the conduct of behavioral science research because behavioral science theories are typically expressed verbally, permitting a variety of mathematical representations for their conceptual relationships. This paper contains three different applications that (1) specify explicit mathematical models for various behavioral science theories, (2) verify the logical consistency of the formalized set of assumptions, and (3) examine the deductive content of the theories' models.The first application, "Stability in the Prisoners' Dilemma," corrects some theorems by Robert Axelrod and others asserting the existence of "evolutionarily stable strategies" and extends this work. This is accomplished by: (1) formalizing the concept of strategy for iterated games and showing that the original proofs only establish "pair-distinct" stability, (2) showing that all strategies for playing the Iterated Prisoners' Dilemma (IPD) are dynamically unstable, (3) deriving a measure of the degree of instability of IPD Strategies, and (4) demonstrating that mutual cooperation can reduce instability, even though it does not eliminate it.The second application, "Models for Long Cycles in War and Production," produces (1) a differential equation model consistent with Joshua Goldstein's long cycle theory that produces simple harmonic motion with fixed cycle times in contrast to his observation that the duration of individual cycles varies from 30 to 70 years, and (2) a second model that corroborates three primary features of long cycles observed by Goldstein including variable cycle times.The third application, "Measuring the Rate of War Outbreak," (1) develops a variable intensity Poisson process model, (2) uses this model to explicitly derive statistically precise predictive estimates of the rate of war outbreak, and (3) derives descriptive estimates of the rate of war outbreak that provide strong, unanticipated corroboration of Goldstein's long cycle dating scheme and of the "resource interpretation" of his long cycle theory developed in the second application

Cognitive Skills Explain Economic Preferences, Strategic Behavior, and Job Attachment

Economic analysis has said little about how an individual’s cognitive skills (CS's) are related to the individual’s preferences in different choice domains, such as risk-taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings. First, we show a strong and significant relationship between an individual’s cognitive skills and preferences, and between the preferences in different choice domains. The latter relationship may be counterintuitive: a patient individual, more inclined to save, is also more willing to take calculated risks. A second finding is that measures of cognitive skill predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with higher CS's more accurately forecast others' behavior, and differentiate their behavior depending on the first mover’s choice, returning higher amount for a higher transfer, and lower for a lower one. After controlling for investment motives, subjects with higher CS’s also cooperate more as first movers. A third finding concerns on-the-job choices. Our subjects incur a significant financial debt for their training that is forgiven only after twelve months of service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early, stronger than any other social, economic and personality measure in our data. These results suggest that cognitive skills affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the economic success of individuals with higher cognitive skills.field experiment, risk aversion, ambiguity aversion, loss aversion, time preference, Prisoners Dilemma, social dilemma, IQ, MPQ, numeracy, U.S. trucking industry, for-hire carriage, truckload (TL), driver turnover, employment duration, survival model

Cooperation among cancer cells as public goods games on Voronoi networks

Cancer cells produce growth factors that diffuse and sustain tumor proliferation, a form of cooperation among cancer cells that can be studied using mathematical models of public goods in the framework of evolutionary game theory. Cell populations, however, form heterogeneous networks that cannot be described by regular lattices or scale-free networks, the types of graphs generally used in the study of cooperation. To describe the dynamics of growth factor production in populations of cancer cells, I study public goods games on Voronoi networks, using a range of non-linear benefits that account for the known properties of growth factors, and different types of diffusion gradients. e results are surprisingly similar to those obtained on regular graphs and different from results on scale-free networks, revealing that network heterogeneity per se does not promote cooperation when public goods diffuse beyond one-step neighbours. e exact shape of the diffusion gradient is not crucial, however, whereas the type of non-linear benefit is an essential determinant of the dynamics. Public goods games on Voronoi networks can shed light on intra-tumor heterogeneity, the evolution of resistance to therapies that target growth factors, and new types of cell therapy

Evolution of cooperation in multilayer networks

Dissertation presented as the partial requirement for obtaining a Master's degree in Information Management, specialization in Information Systems and Technologies ManagementIndividuals take part in multiple layers of networks of interactions simultaneously. These interdependent networks account for the different sort of social ties individuals maintain per layer. In each layer individuals participate in N-Player Public Goods Games where benefits collected increase with amounts invested. It is, however, tempting to be a free-rider, i.e., to take advantage of the common pool without contributing to it, a situation from which a social dilemma results. This thesis offers new insights on how cooperation dynamics is shaped by multiple layers of social interactions and diversity of contributions invested per game. To this end, we resort to Evolutionary Game Theory and Network Science to provide a convenient framework to address the most important prototypical social conflicts and/or dilemmas in large networked populations. In particular, we propose a novel mean-field approach capable of tracking the self-organization of Cooperators when co-evolving with Defectors in a multilayer environment. We show that the emerging collective dynamics, which depends (i) on the underlying layer networks of interactions and (ii) on the criteria to share a finite investment across all games, often does not bear any resemblance with the local processes supporting them. Our findings suggest that, whenever individual investments are distributed among games or layers, resilience of cooperation against free-riders increases with the number of layers, and that cooperation emerges from a non-trivial organization of cooperation across the layers. In opposition, under constant, non-distributed investments, the level of cooperation shows little sensibility to variations in the number of layers. These findings put in evidence the importance of asymmetric contributions across games and social contexts in the emergence of human cooperation

Neighborhoods, social capital and economic success.

This study examines the relationship between neighborhoods, social capital and economic success. In the model developed in this research, social capital mediates the relationship between neighborhoods and economic success. Social capital represents social networks with their associated norms and resources and increases economic success by facilitating cooperation and by lowering transaction costs. Neighborhoods affect social capital through local interactions, network exclusion, social learning and social identity processes. An understudied part of these relationships is the existence of endogeneity among the key variables. Using data from the Project on Human Development in Chicago Neighborhoods, this study uses structural equation modeling to test the model empirically and find that social capital and economic success are endogenous, but while social capital increases economic success, economic success decreases social capital, ceteris paribus. I also find that social capital is highly dependent on neighborhood levels of social capital. These results suggest that place-based policies may be an effective method for increasing economic success

Public Policy and Enterprise Development in Kenya

This book is a collection of studies about the Kenyan economy undertaken by Kenyan researchers with funding from the Investment Climate and Business Environment (ICBE) Research Fund. The ICBE Research Fund is a partnership between TrustAfrica and IDRC of Canada, initiated in 2006. The overall goal of the Fund is to promote reform of the business and investment climate in African so as to enhance the performance of private enterprises and their impact on livelihoods. The ICBE uses competitive research grant mechanisms, capacity strengthening and policy dialogues to enhance evidence- informed policy making on the African continent