Refining the imprecise meaning of non-determinism in the Web by strategic games

Nowadays interactions with the World Wide Web are ubiquitous. Users interact through a number of steps consisting of site calls and handling results that can be automatized as orchestrations. Orchestration results have an inherent degree of uncertainty due to incomplete Web knowledge and orchestration semantics are characterized in terms of imprecise probabilistic choices. We consider two aspects in this imprecise semantic characterization. First, when local knowledge (even imprecise) of some part of the Web increases, this knowledge goes smoothly through the whole orchestration. We deal formally with this aspect introducing orchestration refinements. Second, we analyze refinement under uncertainty in the case of parallel composition. Uncertain knowledge is modeled by an uncertainty profile. Such profiles allow us to look at the uncertainty through a zero-sum game, called angel/daemon-game. We propose to use the structure of the Nash equilibria to refine uncertainty. In this case the information improves not through cooperation but through the angel and daemon competition.Peer ReviewedPostprint (author's final draft

Network Investment Games with Wardrop Followers

We study a two-sided network investment game consisting of two sets of players, called providers and users. The game is set in two stages. In the first stage, providers aim to maximize their profit by investing in bandwidth of cloud computing services. The investments of the providers yield a set of usable services for the users. In the second stage, each user wants to process a task and therefore selects a bundle of services so as to minimize the total processing time. We assume the total processing time to be separable over the chosen services and the processing time of each service to depend on the utilization of the service and the installed bandwidth. We provide insights on how competition between providers affects the total costs of the users and show that every game on a series-parallel graph can be reduced to an equivalent single edge game when analyzing the set of subgame perfect Nash equilibria

Selfish Misbehavior in 802.11 Wireless Networks

Media access protocols in wireless networks require each contending node to wait for a backoff time chosen randomly from a given range, before attempting to transmit on a shared channel. However, selfish stations might try to acquire an unfair portion of the channel resources, at the expense of the cooperating nodes, by not following the protocol specifications. For example, they might choose smaller backoff values more often than would be dictated by pure chance. In this thesis, we study how to detect such misbehavior as well as how nodes might be induced to adhere to the protocol. We first introduce a game-theoretic framework that models an abstracted version of the medium access protocol as a strategic static game. We are interested in designing a game which exhibits a unique Nash equilibrium corresponding to a pre-specified full-support distribution profile. In the cooperation inducement context, the Nash equilibrium for the game would correspond to protocol compliance on behalf of the participating nodes. We identify an exact condition on the number of players and the number of their strategies that must be met to guarantee the existence of such a game. Further, we propose a new protocol called XVBEB in order to determine based on the stations' backoff values choices whether they are behaving accordingly or selfishly. We describe how to deduce the backoff values in XVBEB based on observations of transmissions by nodes in the network and the collision timeline, which is rarely feasible with the IEEE 802.11 backoff procedure. Given a set of backoff values used by an XVBEB node, we describe how to conclude with a specified level of certainty whether the node is indeed adhering to the protocol. Finally, we evaluate the performance of a network of XVBEB nodes and compare it against a standard IEEE 802.11 network. Simulation results show that the throughput of XVBEB is better than that of 802.11 for saturated CBR traffic. Furthermore, XVBEB also exhibits lower packet loss, delay and delay variation than 802.11 for both VBR and VoIP traffic for a variety of load conditions

Sentiments

This paper develops a new theory of fluctuations—one that helps accommodate the notions of “animal spirits” and “market sentiment” in unique-equilibrium, rational-expectations, macroeconomic models. To this goal, we limit the communication that is embedded in a neoclassical economy by allowing trading to be random and decentralized. We then show that the business cycle may be driven by a certain type of extrinsic shocks which we call sentiments. These shocks formalize shifts in expectations of economic activity without shifts in the underlying preferences and technologies; they are akin to sunspots, but operate in unique-equilibrium models. We further show how communication may help propagate these shocks in a way that resembles the spread of fads and rumors and that gives rise to boom-and-bust phenomena. We finally illustrate the quantitative potential of our insights within a variant of the RBC model

Numerical Simulation of Nonoptimal Dynamic Equilibrium Models

In this paper we present a recursive method for the computation of dynamic competitive equilibria in models with heterogeneous agents and market frictions. This method is based upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study approximation properties of the operator as well as the convergence of the moments of simulated sample paths. We apply our numerical algorithm to two growth models, an overlapping generations economy with money, and an asset pricing model with financial frictions.Heterogeneous agents, taxes, externalities, financial frictions, competitive equilibrium, computation, simulation

Semiparametric Estimation of Signaling Games

This paper studies an econometric modeling of a signaling game with two players where one player has one of two types. In particular, we develop an estimation strategy that identifies the payoffs structure and the distribution of types from data of observed actions. We can achieve uniqueness of equilibrium using a refinement, which enables us to identify the parameters of interest. In the game, we consider non-strategic public signals about the types. Because the mixing distribution of these signals is nonparametrically specified, we propose to estimate the model using a sieve conditional MLE. We achieve the consistency and the asymptotic normality of the structural parameters estimates. As an alternative, we allow for the possibility of multiple equilibria, without using an equilibrium selection rule. As a consequence, we adopt a set inference allowing for multiplicity of equilibria.Semiparametric Estimation, Signaling Game, Set Inference, Infinite Dimensional Parame- ters, Sieve Simultaneous Conditional MLE

Lab Labor: What Can Labor Economists Learn from the Lab?

This paper surveys the contributions of laboratory experiments to labor economics. We begin with a discussion of methodological issues: why (and when) is a lab experiment the best approach; how do laboratory experiments compare to field experiments; and what are the main design issues? We then summarize the substantive contributions of laboratory experiments to our understanding of principal-agent interactions, social preferences, union-firm bargaining, arbitration, gender differentials, discrimination, job search, and labor markets more generally.personnel economics, principal-agent theory, laboratory experiments, labor economics

Nash equilibria, gale strings, and perfect matchings

This thesis concerns the problem 2-NASH of finding a Nash equilibrium of a bimatrix game, for the special class of so-called “hard-to-solve” bimatrix games. The term “hardto-solve” relates to the exponential running time of the famous and often used Lemke– Howson algorithm for this class of games. The games are constructed with the help of dual cyclic polytopes, where the algorithm can be expressed combinatorially via labeled bitstrings defined by the “Gale evenness condition” that characterise the vertices of these polytopes. We define the combinatorial problem “Another completely labeled Gale string” whose solutions define the Nash equilibria of any game defined by cyclic polytopes, including the games where the Lemke–Howson algorithm takes exponential time. We show that “Another completely labeled Gale string” is solvable in polynomial time by a reduction to the “Perfect matching” problem in Euler graphs. We adapt the Lemke–Howson algorithm to pivot from one perfect matching to another and show that again for a certain class of graphs this leads to exponential behaviour. Furthermore, we prove that completely labeled Gale strings and perfect matchings in Euler graphs come in pairs and that the Lemke–Howson algorithm connects two strings or matchings of opposite signs. The equivalence between Nash Equilibria of bimatrix games derived from cyclic polytopes, completely labeled Gale strings, and perfect matchings in Euler Graphs implies that counting Nash equilibria is #P-complete. Although one Nash equilibrium can be computed in polynomial time, we have not succeeded in finding an algorithm that computes a Nash equilibrium of opposite sign. However, we solve this problem for certain special cases, for example planar graphs. We illustrate the difficulties concerning a general polynomial-time algorithm for this problem by means of negative results that demonstrate why a number of approaches towards such an algorithm are unlikely to be successful