Deconstruction of Infinite Extensive Games using coinduction

Finite objects and more specifically finite games are formalized using induction, whereas infinite objects are formalized using coinduction. In this article, after an introduction to the concept of coinduction, we revisit on infinite (discrete) extensive games the basic notions of game theory. Among others, we introduce a definition of Nash equilibrium and a notion of subgame perfect equilibrium for infinite games. We use those concepts to analyze well known infinite games, like the dollar auction game and the centipede game and we show that human behaviors that are often considered as illogic are perfectly rational, if one admits that human agents reason coinductively.Comment: 19

On the Rationality of Escalation

Escalation is a typical feature of infinite games. Therefore tools conceived for studying infinite mathematical structures, namely those deriving from coinduction are essential. Here we use coinduction, or backward coinduction (to show its connection with the same concept for finite games) to study carefully and formally the infinite games especially those called dollar auctions, which are considered as the paradigm of escalation. Unlike what is commonly admitted, we show that, provided one assumes that the other agent will always stop, bidding is rational, because it results in a subgame perfect equilibrium. We show that this is not the only rational strategy profile (the only subgame perfect equilibrium). Indeed if an agent stops and will stop at every step, we claim that he is rational as well, if one admits that his opponent will never stop, because this corresponds to a subgame perfect equilibrium. Amazingly, in the infinite dollar auction game, the behavior in which both agents stop at each step is not a Nash equilibrium, hence is not a subgame perfect equilibrium, hence is not rational.Comment: 19 p. This paper is a duplicate of arXiv:1004.525

Intelligent escalation and the principle of relativity

Escalation is the fact that in a game (for instance in an auction), the agents play forever. The $0,1$-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

Rationality and Escalation in Infinite Extensive Games

The aim of this of this paper is to study infinite games and to prove formally some properties in this framework. As a consequence we show that the behavior (the madness) of people which leads to speculative crashes or escalation can be fully rational. Indeed it proceeds from the statement that resources are infinite. The reasoning is based on the concept of coinduction conceived by computer scientists to model infinite computations and used by economic agents unknowingly. When used consciously, this concept is not as simple as induction and we could paraphrase Newton: "Modeling the madness of people is more difficult than modeling the motion of planets".Comment: arXiv admin note: substantial text overlap with arXiv:1004.5257, arXiv:0904.3528, and arXiv:0912.174

Öresauktioner - Seriösa auktioner eller spännande bondfångeri?

This essay deals with a new kind of internet trading and/or gaming, where the interplay between the consumer and the producer is found to be a variation of the Dollar auction. The question is asked how this market should be viewed, which parties are involved as well as whether the market should be regulated or not. In order to gain an overview of the market, the market was compared to different established microeconomic theories with the Bayesian Nash game theory in focus. A statistical analysis of real-life data is made in order to gain an overview of the market. This type of market is found to create a negative consumer surplus compared to microeconomic theories. Also, the gaming theory aspect does not offer the consumer party the same opportunities as it does the producer party. Thus, it is impossible to regard these auctions as fair gaming since the auction outcome show too big a variation. The analysis results show that this market can only be compared to the Bayesian Nash game theory, which makes it difficult to define rules and regulations for this type of market. Furthermore, this essay concludes that it should be made evident to the consumers that this type of market is better defined as gaming or lottery than a real auction. In conclusion, this type of market is not regarded as completely honest since the producers can take advantage of the situation and make a profit on profiteering on non informed consumers

Programming Languages and Systems

This open access book constitutes the proceedings of the 28th European Symposium on Programming, ESOP 2019, which took place in Prague, Czech Republic, in April 2019, held as Part of the European Joint Conferences on Theory and Practice of Software, ETAPS 2019

Foundations of Software Science and Computation Structures

This open access book constitutes the proceedings of the 22nd International Conference on Foundations of Software Science and Computational Structures, FOSSACS 2019, which took place in Prague, Czech Republic, in April 2019, held as part of the European Joint Conference on Theory and Practice of Software, ETAPS 2019. The 29 papers presented in this volume were carefully reviewed and selected from 85 submissions. They deal with foundational research with a clear significance for software science

Programming Languages and Systems

This open access book constitutes the proceedings of the 29th European Symposium on Programming, ESOP 2020, which was planned to take place in Dublin, Ireland, in April 2020, as Part of the European Joint Conferences on Theory and Practice of Software, ETAPS 2020. The actual ETAPS 2020 meeting was postponed due to the Corona pandemic. The papers deal with fundamental issues in the specification, design, analysis, and implementation of programming languages and systems

Foundations of Software Science and Computation Structures

This open access book constitutes the proceedings of the 23rd International Conference on Foundations of Software Science and Computational Structures, FOSSACS 2020, which took place in Dublin, Ireland, in April 2020, and was held as Part of the European Joint Conferences on Theory and Practice of Software, ETAPS 2020. The 31 regular papers presented in this volume were carefully reviewed and selected from 98 submissions. The papers cover topics such as categorical models and logics; language theory, automata, and games; modal, spatial, and temporal logics; type theory and proof theory; concurrency theory and process calculi; rewriting theory; semantics of programming languages; program analysis, correctness, transformation, and verification; logics of programming; software specification and refinement; models of concurrent, reactive, stochastic, distributed, hybrid, and mobile systems; emerging models of computation; logical aspects of computational complexity; models of software security; and logical foundations of data bases.