Leaders should not be conformists in evolutionary social dilemmas

The most common assumption in evolutionary game theory is that players should adopt a strategy that warrants the highest payoff. However, recent studies indicate that the spatial selection for cooperation is enhanced if an appropriate fraction of the population chooses the most common rather than the most profitable strategy within the interaction range. Such conformity might be due to herding instincts or crowd behavior in humans and social animals. In a heterogeneous population where individuals differ in their degree, collective influence, or other traits, an unanswered question remains who should conform. Selecting conformists randomly is the simplest choice, but it is neither a realistic nor the optimal one. We show that, regardless of the source of heterogeneity and game parametrization, socially the most favorable outcomes emerge if the masses conform. On the other hand, forcing leaders to conform significantly hinders the constructive interplay between heterogeneity and coordination, leading to evolutionary outcomes that are worse still than if conformists were chosen randomly. We conclude that leaders must be able to create a following for network reciprocity to be optimally augmented by conformity. In the opposite case, when leaders are castrated and made to follow, the failure of coordination impairs the evolution of cooperation.Comment: 7 two-column pages, 4 figures; accepted for publication in Scientific Reports [related work available at arXiv:1412.4113

An evolutionary game model for behavioral gambit of loyalists: Global awareness and risk-aversion

We study the phase diagram of a minority game where three classes of agents are present. Two types of agents play a risk-loving game that we model by the standard Snowdrift Game. The behaviour of the third type of agents is coded by {\em indifference} w.r.t. the game at all: their dynamics is designed to account for risk-aversion as an innovative behavioral gambit. From this point of view, the choice of this solitary strategy is enhanced when innovation starts, while is depressed when it becomes the majority option. This implies that the payoff matrix of the game becomes dependent on the global awareness of the agents measured by the relevance of the population of the indifferent players. The resulting dynamics is non-trivial with different kinds of phase transition depending on a few model parameters. The phase diagram is studied on regular as well as complex networks

When In Rome: Conformity and the Provision of Public Goods

We ask whether conformity, copying the most observed behavior in a population, can affect free riding in a public goods situation. Our model suggests that, if free riding is sufficiently frequent at the start of a public goods game, conformity will increase the growth rate of free riding. We confirm this prediction in the experimental lab by showing that more free riding occurs when players have information about the distribution of contributions than when players know only the aggregate contribution level. As a stricter test, we econometrically estimate the dynamic on which the model is based and find that, controlling for the payoff incentive to free ride, players react significantly to the number of free riders in their groups. Further, conformity is significantly stronger when players have more information about the choices of others.conformity, public good, social dilemma, experiment, replicator dynamic

Public disclosure of players? conduct and Common Resources Harvesting: Experimental Evidence from a Nairobi Slum

We evaluate the effect of information disclosure on players? behaviour in a multiperiod common pool resource game experiment run in an area of notably scarce social capital such as the Nairobi slum of Kibera. We document divergence of average withdrawal rates across time with an increasingly lower cooperation in the non anonimous setting. We demonstrate that information induced asymmetric conformity contributes to explain what we observe, that is, players who withdraw less than the average of the group in the previous round react more negatively when individual payoffs are disclosed than when they are not, and their reaction is less than compensated by the mean reversion of those who withdrew more. Our results are consistent with the (Ostrom, 2000) hypothesis that, in absence of punishment, disclosure of information about individual (cooperative or non cooperative) behaviour makes common resource management more difficult and tragedy of the commons easier.common pool resource game, conformism, information disclosure field experiments, tragedy of commons

More order with less law: on contract enforcement, trust, and crowding

Most contracts, whether between voters and politicians or between house owners and contractors, are incomplete. “More law,” it typically is assumed, increases the likelihood of contract performance by increasing the probability of enforcement and/or the cost of breach. We examine a contractual relationship in which the first mover has to decide whether she wants to enter a contract without knowing whether the second mover will perform. We analyze how contract enforceability affects individual performance for exogenous preferences. Then we apply a dynamic model of preference adaptation and find that economic incentives have a nonmonotonic effect on behavior. Individuals perform a contract when enforcement is strong or weak but not with medium enforcement probabilities: Trustworthiness is “crowded in” with weak and “crowded out” with medium enforcement. In a laboratory experiment we test our model’s implications and find support for the crowding prediction. Our finding is in line with the recent work on the role of contract enforcement and trust in formerly Communist countries

Games and Phone Numbers: Do Short Term Memory Bounds Affect Strategy Behavior?

Research in experimental and behavioral game theory has revealed a substantial and persistent degree of heterogeneity in the strategic behavior of real individuals. While the prevailing theoretical explanations of the observed heterogeneity typically invoke underlying differences in beliefs among the population of players, we argue that a further source of heterogeneity may consist in the individuals' different ability to process information, of which short term memory capacity provides a measurable proxy. Research in cognitive psychology has shown that individuals typically differ in their short term memory capacity; furthermore, short term memory capacity provides a fundamental cognitive bottleneck to our ability to process information efficiently and hence seems correlated with performance in a variety of problem solving and reasoning tasks. In this paper we conduct experiments on a set of well-known games whose solution concepts require the application of some paradigmatic forms of strategic reasoning, such as iterated dominance, reasoning about common knowledge and backward induction. We separately conduct standard short term memory tests on our subjects to detect the presence of a correlation between individuals' behavior in the games - here defined in terms of degrees of conformity to the standard game-theoretic prescriptions - and their short term memory score. Our results show the presence of a significant and positive correlation between subjects' short term memory score and conformity to standard game-theoretic prescriptions in the games, thus confirming our hypothesis. While the robustness of our conjecture awaits to be confirmed by further data gathering in more interactive experimental settings, our preliminary results suggest a promising line of inquiry on the interconnections between information processing capacity and strategic behavior

In Honor of Matthew Rabin: Winner of the John Bates Clark Medal

Although there is some evidence that Matthew Rabin existed before 1990, we had the pleasure of discovering him for ourselves when, in the early 1990s, he sent each of us a copy of his manuscript "Incorporating Fairness into Game Theory and Economics" [2]. Matthew was, at this time, an assistant professor in Berkeley's economics department, having recently finished his graduate training at MIT. The paper was remarkable in many ways, and it induced us both to call around and ask: "Who is this guy Rabin?" Now, just a decade later, we find ourselves writing an article in honor of his winning the John Bates Clark award. So, who is this guy

Cooperation, Norms, and Revolutions: A Unified Game-Theoretical Approach

Cooperation is of utmost importance to society as a whole, but is often challenged by individual self-interests. While game theory has studied this problem extensively, there is little work on interactions within and across groups with different preferences or beliefs. Yet, people from different social or cultural backgrounds often meet and interact. This can yield conflict, since behavior that is considered cooperative by one population might be perceived as non-cooperative from the viewpoint of another. To understand the dynamics and outcome of the competitive interactions within and between groups, we study game-dynamical replicator equations for multiple populations with incompatible interests and different power (be this due to different population sizes, material resources, social capital, or other factors). These equations allow us to address various important questions: For example, can cooperation in the prisoner's dilemma be promoted, when two interacting groups have different preferences? Under what conditions can costly punishment, or other mechanisms, foster the evolution of norms? When does cooperation fail, leading to antagonistic behavior, conflict, or even revolutions? And what incentives are needed to reach peaceful agreements between groups with conflicting interests? Our detailed quantitative analysis reveals a large variety of interesting results, which are relevant for society, law and economics, and have implications for the evolution of language and culture as well

Conformity Hinders the Evolution of Cooperation on Scale-Free Networks

We study the effects of conformity, the tendency of humans to imitate locally common behaviors, in the evolution of cooperation when individuals occupy the vertices of a graph and engage in the one-shot Prisoner's Dilemma or the Snowdrift game with their neighbors. Two different graphs are studied: rings (one-dimensional lattices with cyclic boundary conditions) and scale-free networks of the Barabasi-Albert type. The proposed evolutionary-graph model is studied both by means of Monte Carlo simulations and an extended pair-approximation technique. We find improved levels of cooperation when evolution is carried on rings and individuals imitate according to both the traditional pay-off bias and a conformist bias. More important, we show that scale-free networks are no longer powerful amplifiers of cooperation when fair amounts of conformity are introduced in the imitation rules of the players. Such weakening of the cooperation-promoting abilities of scale-free networks is the result of a less biased flow of information in scale-free topologies, making hubs more susceptible of being influenced by less-connected neighbors.Comment: 14 pages, 11 figure