Learning backward induction: a neural network agent approach

This paper addresses the question of whether neural networks (NNs), a realistic cognitive model of human information processing, can learn to backward induce in a two-stage game with a unique subgame-perfect Nash equilibrium. The NNs were found to predict the Nash equilibrium approximately 70% of the time in new games. Similarly to humans, the neural network agents are also found to suffer from subgame and truncation inconsistency, supporting the contention that they are appropriate models of general learning in humans. The agents were found to behave in a bounded rational manner as a result of the endogenous emergence of decision heuristics. In particular a very simple heuristic socialmax, that chooses the cell with the highest social payoff explains their behavior approximately 60% of the time, whereas the ownmax heuristic that simply chooses the cell with the maximum payoff for that agent fares worse explaining behavior roughly 38%, albeit still significantly better than chance. These two heuristics were found to be ecologically valid for the backward induction problem as they predicted the Nash equilibrium in 67% and 50% of the games respectively. Compared to various standard classification algorithms, the NNs were found to be only slightly more accurate than standard discriminant analyses. However, the latter do not model the dynamic learning process and have an ad hoc postulated functional form. In contrast, a NN agent’s behavior evolves with experience and is capable of taking on any functional form according to the universal approximation theorem.

Scientific Polarization

Contemporary societies are often "polarized", in the sense that sub-groups within these societies hold stably opposing beliefs, even when there is a fact of the matter. Extant models of polarization do not capture the idea that some beliefs are true and others false. Here we present a model, based on the network epistemology framework of Bala and Goyal ["Learning from neighbors", \textit{Rev. Econ. Stud.} \textbf{65}(3), 784-811 (1998)], in which polarization emerges even though agents gather evidence about their beliefs, and true belief yields a pay-off advantage. The key mechanism that generates polarization involves treating evidence generated by other agents as uncertain when their beliefs are relatively different from one's own.Comment: 22 pages, 5 figures, author final versio

Opinion Exchange Dynamics

We survey a range of models of opinion exchange. From the introduction: "The exchange of opinions between individuals is a fundamental social interaction... Moreover, many models in this field are an excellent playground for mathematicians, especially those working in probability, algorithms and combinatorics. The goal of this survey is to introduce such models to mathematicians, and especially to those working in discrete mathematics, information theory, optimization, probability and statistics."Comment: 62 pages. arXiv admin note: substantial text overlap with arXiv:1207.589

Behavioral Communities and the Atomic Structure of Networks

We develop a theory of `behavioral communities' and the `atomic structure' of networks. We define atoms to be groups of agents whose behaviors always match each other in a set of coordination games played on the network. This provides a microfoundation for a method of detecting communities in social and economic networks. We provide theoretical results characterizing such behavior-based communities and atomic structures and discussing their properties in large random networks. We also provide an algorithm for identifying behavioral communities. We discuss applications including: a method of estimating underlying preferences by observing behavioral conventions in data, and optimally seeding diffusion processes when there are peer interactions and homophily. We illustrate the techniques with applications to high school friendship networks and rural village networks

A heuristic model of bounded route choice in urban areas

There is substantial evidence to indicate that route choice in urban areas is complex cognitive process, conducted under uncertainty and formed on partial perspectives. Yet, conventional route choice models continue make simplistic assumptions around the nature of human cognitive ability, memory and preference. In this paper, a novel framework for route choice in urban areas is introduced, aiming to more accurately reflect the uncertain, bounded nature of route choice decision making. Two main advances are introduced. The first involves the definition of a hierarchical model of space representing the relationship between urban features and human cognition, combining findings from both the extensive previous literature on spatial cognition and a large route choice dataset. The second advance involves the development of heuristic rules for route choice decisions, building upon the hierarchical model of urban space. The heuristics describe the process by which quick, 'good enough' decisions are made when individuals are faced with uncertainty. This element of the model is once more constructed and parameterised according to findings from prior research and the trends identified within a large routing dataset. The paper outlines the implementation of the framework within a real-world context, validating the results against observed behaviours. Conclusions are offered as to the extension and improvement of this approach, outlining its potential as an alternative to other route choice modelling frameworks

Modeling Option and Strategy Choices with Connectionist Networks: Towards an Integrative Model of Automatic and Deliberate Decision Making

We claim that understanding human decisions requires that both automatic and deliberate processes be considered. First, we sketch the qualitative differences between two hypothetical processing systems, an automatic and a deliberate system. Second, we show the potential that connectionism offers for modeling processes of decision making and discuss some empirical evidence. Specifically, we posit that the integration of information and the application of a selection rule are governed by the automatic system. The deliberate system is assumed to be responsible for information search, inferences and the modification of the network that the automatic processes act on. Third, we critically evaluate the multiple-strategy approach to decision making. We introduce the basic assumption of an integrative approach stating that individuals apply an all-purpose rule for decisions but use different strategies for information search. Fourth, we develop a connectionist framework that explains the interaction between automatic and deliberate processes and is able to account for choices both at the option and at the strategy level.System 1, Intuition, Reasoning, Control, Routines, Connectionist Model, Parallel Constraint Satisfaction