5,619 research outputs found

    The Present and Future of Game Theory

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    A broad nontechnical coverage of many of the developments in game theory since the 1950s is given together with some comments on important open problems and where some of the developments may take place. The nearly 90 references given serve only as a minimal guide to the many thousands of books and articles that have been written. The purpose here is to present a broad brush picture of the many areas of study and application that have come into being. The use of deep techniques flourishes best when it stays in touch with application. There is a vital symbiotic relationship between good theory and practice. The breakneck speed of development of game theory calls for an appreciation of both the many realities of conflict, coordination and cooperation and the abstract investigation of all of them.Game theory, Application and theory, Social sciences, Law, Experimental gaming, conflict, Coordination and cooperation

    Evolutionary Game Theory and Thorstein Veblen’s Evolutionary Economics: Is EGT Veblenian?

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    This essay provides an approach to the analysis of the link between Thorstein Veblen's evolutionary approach and evolutionary game theory (EGT). We shed some light on the potential contribution of Veblen's theory of socioeconomic evolution to the discussion on the application of EGT to social environments. We also investigate to what extent elements of EGT can be used to formalize some of the basic evolutionary principles proposed by Veblen. The methodological imperatives laid down by Veblen, defining an evolutionary approach, are presented. We provide an analytical framework that allows the evaluation of EGT in terms of Veblen's evolutionary approach. To better understand the main principles and rationale behind EGT and how it can be applied as a tool for analyzing issues on the diversity, interaction, and evolution of social systems, we discuss this nontraditional approach and its basic concepts. Finally, the main characteristics of EGT are contrasted with Veblen's principles.Evolution; Evolutionary Economics; Evolutionary; Game Theory; Games

    Beyond foraging: behavioral science and the future of institutional economics

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    Institutions affect economic outcomes, but variation in them cannot be directly linked to environmental factors such as geography, climate, or technological availabilities. Game theoretic approaches, based as they typically are on foraging only assumptions, do not provide an adequate foundation for understanding the intervening role of politics and ideology; nor does the view that culture and institutions are entirely socially constructed. Understanding what institutions are and how they influence behavior requires an approach that is in part biological, focusing on cognitive and behavioral adaptations for social interaction favored in the past by group selection. These adaptations, along with their effects on canalizing social learning, help to explain uniformities in political and social order, and are the bedrock upon which we build cultural and institutional variability

    Dynamics of alliance formation and the egalitarian revolution

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    Arguably the most influential force in human history is the formation of social coalitions and alliances (i.e., long-lasting coalitions) and their impact on individual power. In most great ape species, coalitions occur at individual and group levels and among both kin and non-kin. Nonetheless, ape societies remain essentially hierarchical, and coalitions rarely weaken social inequality. In contrast, human hunter-gatherers show a remarkable tendency to egalitarianism, and human coalitions and alliances occur not only among individuals and groups, but also among groups of groups. Here, we develop a stochastic model describing the emergence of networks of allies resulting from within-group competition for status or mates between individuals utilizing dyadic information. The model shows that alliances often emerge in a phase transition-like fashion if the group size, awareness, aggressiveness, and persuasiveness of individuals are large and the decay rate of individual affinities is small. With cultural inheritance of social networks, a single leveling alliance including all group members can emerge in several generations. Our results suggest that a rapid transition from a hierarchical society of great apes to an egalitarian society of hunter-gatherers (often referred to as "egalitarian revolution") could indeed follow an increase in human cognitive abilities. The establishment of stable group-wide egalitarian alliances creates conditions promoting the origin of cultural norms favoring the group interests over those of individuals.Comment: 37 pages, 15 figure

    Learning in Evolutionary Environments

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    The purpose of this work is to present a sort of short selective guide to an enormous and diverse literature on learning processes in economics. We argue that learning is an ubiquitous characteristic of most economic and social systems but it acquires even greater importance in explicitly evolutionary environments where: a) heterogeneous agents systematically display various forms of "bounded rationality"; b) there is a persistent appearance of novelties, both as exogenous shocks and as the result of technological, behavioural and organisational innovations by the agents themselves; c) markets (and other interaction arrangements) perform as selection mechanisms; d) aggregate regularities are primarily emergent properties stemming from out-of-equilibrium interactions. We present, by means of examples, the most important classes of learning models, trying to show their links and differences, and setting them against a sort of ideal framework of "what one would like to understand about learning...". We put a signifiphasis on learning models in their bare-bone formal structure, but we also refer to the (generally richer) non-formal theorising about the same objects. This allows us to provide an easier mapping of a wide and largely unexplored research agenda.Learning, Evolutionary Environments, Economic Theory, Rationality

    A game theory of organizational ecology : a model of managerial inertia and market selection

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    This paper merges two theoretical perspectives in a mathematical game model: industrial organization on the one hand, which basically is the economic theory of market competition and firm strategies, and organizational ecology on the other, which is a major sociological tradition that studies the evolution of organizational populations. The merger is instrumental in analyzing a key question in organization studies: what is the role of flexibility, inertia and efficiency in facilitating firm performance in a selection environment, in terms of both profitability and survival? Particularly, we argue that game theory can offer a mathematical model of organizational ecology. Such a game-theoretic model reveals that an inert firm may push a flexible rival from the market, even if the inert market leader faces a cost disadvantage. Moreover, this may happen in a munificent environment. That is, cut-throat rivalry can be the result of strategic competition only - being facilitated by organizational inertia. This paper operationalizes relative inertia by modeling managerial resistance against downsizing. The model clearly supports the key claim of organizational ecology that relative inertia facilitates rather than impedes survival chances.industrial organization ;

    The naturalistic turn in economics: implications for the theory of finance

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    Economics is increasingly adopting the methodological standards and procedures of the natural sciences. The paper analyzes this 'naturalistic turn' from the philosophical perspective on naturalism, and I discuss the implications for the field of finance. The theory of finance is an interesting case in point for the methodological issues, as it manifests a paradigmatic tension between the pure theory of finance and Behavioral Finance. I distinguish between three kinds of naturalism: mark I, the reduction of behavior on psychoneural phenomena, mark II, the transfer of patterns of causal explanations from the natural sciences to the social sciences, mark III, the enrichment of the ontology from observer-independent to observer-relative facts. Building an integrated naturalistic paradigm from these three ingredients, I show that naturalism in economics will only be completed by a simultaneous linguistic turn, with language being analyzed from the naturalistic viewpoint. I relate this proposition with recent results of research into finance, especially connecting Behavioral Finance with the sociology of finance. --Naturalism,causation in economics,neuroeconomics,behavioral finance,social ontology,sociology of finance

    EVOLUTIONARY GAME THEORETIC MODELING OF DECISION MAKING AND CULTURE

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    Evolutionary Game Theory (EGT) has become an attractive framework for modeling human behavior because it provides tools to explicitly model the dynamics of behaviors in populations over time and does not require the strong rationality assumptions of classical game theory. Since the application of EGT to human behavior is still relatively new, many questions about human behavior and culture of interest to social scientists have yet to be examined through an EGT perspective to determine whether explanatory and predictive rather than merely descriptive insights can be gained. In this thesis, informed by social science data and under close collaboration with social scientists, I use EGT-based approaches to model and gain a qualitative understanding of various aspects of the evolution of human decision-making and culture. The specific phenomena I explore are i) risk preferences and their implications on the evolution of cooperation and ii) the relationship between societal threat and the propensity with which agents of societies punish norm-violating behavior. First, inspired by much empirical research that shows human risk-preferences to be state-dependent rather than expected-value-maximizing, I propose a simple sequential lottery game framework to study the evolution of human risk preferences. Using this game model in conjunction with known population dynamics provides the novel insight that for a large range of population dynamics, the interplay between risk-taking and sequentiality of choices allows state-dependent risk behavior to have an evolutionary advantage over expected-value maximization.I then demonstrate how this principle can facilitate the evolution of cooperation in classic game-theoretic games where cooperation entails risk. Next, inspired by striking differences across cultural groups in their willingness to punish norm violators, I develop evolutionary game models based on the Public Goods Game to study punishment behavior. Operationalizing various forms of societal threat and determining the relationship between these threats and evolved punishment propensities, these models show how cross-cultural differences in punishment behavior are at least partially determined by cultures' exposure to societal threats, providing support for social science theories hypothesizing that higher threat is a causal factor for higher punishment propensities. This work advances the state of the art of EGT and its applications to the social sciences by i) creating novel EGT models to study different phenomena of interest in human decision-making and culture, and ii) using these models to provide insights about the relationships between variables in these models and their impact on evolutionary outcomes. By developing and analyzing these models under close consideration of relevant social science data, this work not only advances our understanding of how to use evolutionary game and multi-agent system models to study social phenomena, but also lays the foundation for more complex explanatory and predictive tools applicable to behaviors in human populations
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