16,764 research outputs found

    Intelligent escalation and the principle of relativity

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    Escalation is the fact that in a game (for instance in an auction), the agents play forever. The 0,10,1-game is an extremely simple infinite game with intelligent agents in which escalation arises. It shows at the light of research on cognitive psychology the difference between intelligence (algorithmic mind) and rationality (algorithmic and reflective mind) in decision processes. It also shows that depending on the point of view (inside or outside) the rationality of the agent may change which is proposed to be called the principle of relativity.Comment: arXiv admin note: substantial text overlap with arXiv:1306.228

    The risk of divergence

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    We present infinite extensive strategy profiles with perfect information and we show that replacing finite by infinite changes the notions and the reasoning tools. The presentation uses a formalism recently developed by logicians and computer science theoreticians, called coinduction. This builds a bridge between economic game theory and the most recent advance in theoretical computer science and logic. The key result is that rational agents may have strategy leading to divergence .Comment: 3rd International Workshop on Strategic Reasoning, Dec 2015, Oxford, United Kingdom. 201

    Abnormal attentions towards the British Royal Family. Factors associated with approach and escalation

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    Abnormal approach and escalation from communication to physical intrusion are central concerns in managing risk to prominent people. This study was a retrospective analysis of police files of those who have shown abnormal attentions toward the British Royal Family. Approach (n = 222), compared with communication only (n = 53), was significantly associated with specific factors, most notably serious mental illness and grandiosity. In a sample of those who engaged in abnormal communication (n = 132), those who approached (n = 79) were significantly more likely to evidence mental illness and grandiosity, to use multiple communications, to employ multiple means of communication, and to be driven by motivations that concerned a personal entitlement to the prominent individual. Logistic regression produced a model comprising grandiosity, multiple communications, and multiple means of communication, for which receiver operating characteristic (ROC) analysis gave an area under the curve (AUC) of 0.82. The implications of these findings are discussed in relation to those for other target groups

    Holding on for too long? An experimental study on inertia in entrepreneurs’ and non-entrepreneurs’ disinvestment choices

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    Disinvestment, in the sense of project termination and liquidation of assets including the cession of a venture, is an important realm of entrepreneurial decision-making. This study presents the results of an experimental investigation modeling the choice to disinvest as a dynamic problem of optimal stopping in which the patterns of decisions are analyzed with entrepreneurs and non-entrepreneurs. Our experimental results reject the standard net present value approach as an account of observed behavior. Instead, most individuals seem to understand the value of waiting. Their choices are weakly related to the disinvestment triggers derived from a formal optimal stopping benchmark consistent with real options reasoning. We also observe a pronounced ‘psychological inertia’, i.e., most individuals hold on to a losing project for even longer than real options reasoning would predict. The study provides evidence for entrepreneurs and non-entrepreneurs being quite similar in their behavior.Real-Options, Disinvestment, Exit Behavior, Experimental Economics, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Institutional and Behavioral Economics,

    Schelling, von Neumann, and the Event that Didn’t Occur

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    Thomas Schelling was recognized by the Nobel Prize committee as a pioneer in the application of game theory and rational choice analysis to problems of politics and international relations. However, although he makes frequent references in his writings to this approach, his main explorations and insights depend upon and require acknowledgment of its limitations. One of his principal concerns was how a country could engage in successful deterrence. If the behavioral assumptions that commonly underpin game theory are taken seriously and applied consistently, however, nuclear adversaries are almost certain to engage in devastating conflict, as John von Neumann forcefully asserted. The history of the last half century falsified von Neumann’s prediction, and the “event that didn’t occur” formed the subject of Schelling’s Nobel lecture. The answer to the question “why?” is the central concern of this paper

    The decision-making entrepreneur; Literature review

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    This study provides a literature overview of the entrepreneurial decision-making process. The literature review is used as background information for a qualitative study, which investigates, by means of case studies, the decision-making process of small business enterpreneurs in The Netherlands (Gibcus and Van Hoesel, 2003). The literature overview is the starting point of a confrontation between the literature on decision-making and the empirical findings of the latter qualitive study. Firstly, this literature review gives an introduction to general decision theory. It discusses the classical rationality, the bounded rationality and the neoclassical rationality. The place of the entrepreneur in the general decision theory is also discussed. Next, an analytic framework of the strategic decision-making in SMEs is presented. The analytic framework consists of three elements: the entrepreneur, the environment and the strategic decision process. Each of these elements is critical. Finally, some earlier empirical findings on entrepreneurial strategic decision-making are discussed.

    Complexity and Endogenous Instability

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    The global financial crisis proved the critical impact of the gap between individual rationality and group rationality. This gap is not supposed to arise in a Neoclassical world, but it frequently arises in a world as complex as ours. The paper explores how endogenous instability might arise due to such a gap, and what behavioral rules might help to mitigate its impact.fallacy of composition, empathy, n-person prisoner’s dilemma games, n-person zero-sum games, symmetry, the golden rule.

    Apprenticeship and Conservation Incentives

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    Apprentice programs offer a method to encourage responsible individual behavior by laying the foundation for successful collective property rights. Apprenticeship has three purposes: to restrict the rate of entry, to affect the quality of the participant, and to create the conditions for collective action for sustainability. Apprenticeship could be an important fishery management tool, particularly in decentralized, adaptive management regimes that require ongoing, multi-party negotiation for success. It is not vocational training; instead it serves a public purpose: to create the conditions for stewardship and participation in management. This perception of collective property right mimics customary practice in some successful traditional fisheries such as the Maine lobster fishery where customary practice has been demonstrated both to have conservation benefits and to lower enforcement costs. Case information from Maine’s new, statutory lobster apprentice program is discussed. Apprenticeship creates conditions for responsible behavior by creating a stable population that can develop long term assurances about expected behavior and can develop credible internal monitoring and sanctions. In addition to requiring a personal investment of time, it provides information about fishing ethics and non-fishing information about basic biology, ecology, and participation in the management system. This, because it changes the frame of reference, should affect individual behavior both fishing and as participants in management. Apprenticeship focuses on the individual fishing as the principal actor in conservation. The apprenticeship approach bolsters both co-management and, for that matter, conventional limited entry programs as well
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