Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision

We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under standard assumptions. Yet, we also find evidence for reciprocal behavior. Our data analysis shows, however, that it does not pay for the employer to solely rely on the reciprocity of employees

Challenges in Complex Systems Science

FuturICT foundations are social science, complex systems science, and ICT. The main concerns and challenges in the science of complex systems in the context of FuturICT are laid out in this paper with special emphasis on the Complex Systems route to Social Sciences. This include complex systems having: many heterogeneous interacting parts; multiple scales; complicated transition laws; unexpected or unpredicted emergence; sensitive dependence on initial conditions; path-dependent dynamics; networked hierarchical connectivities; interaction of autonomous agents; self-organisation; non-equilibrium dynamics; combinatorial explosion; adaptivity to changing environments; co-evolving subsystems; ill-defined boundaries; and multilevel dynamics. In this context, science is seen as the process of abstracting the dynamics of systems from data. This presents many challenges including: data gathering by large-scale experiment, participatory sensing and social computation, managing huge distributed dynamic and heterogeneous databases; moving from data to dynamical models, going beyond correlations to cause-effect relationships, understanding the relationship between simple and comprehensive models with appropriate choices of variables, ensemble modeling and data assimilation, modeling systems of systems of systems with many levels between micro and macro; and formulating new approaches to prediction, forecasting, and risk, especially in systems that can reflect on and change their behaviour in response to predictions, and systems whose apparently predictable behaviour is disrupted by apparently unpredictable rare or extreme events. These challenges are part of the FuturICT agenda

When Europe encounters urban governance: Policy Types, Actor Games and Mechanisms of cites Europeanization

This paper examines European Union (EU) causal mechanisms and policy instruments affecting the urban domain throughout the lenses of the Europeanization approach. Instead of looking at EU instruments that are formally/legally consecrated to cities, we use theoretical public policy analysis to explore the arenas and the causal mechanisms that structure the encounters between the EU and urban systems of governance. Policy instruments are related to policy arenas and in turn to different mechanisms of transmission thus originating a typology of European Policy Modes. The paper focuses on four different EU instruments in the in the macro-area of sustainable development and proposes potential game-theoretical models for each of them. In the conclusions we highlight the differences between this approach and the traditional analysis of EU urban policy, and suggest avenues for future empirical research based on typologies of policy instruments and modes of Europeanization

Public beliefs and corruption in a repeated psychological game

This paper investigates the role of guilt aversion for corruption in public administration. Corruption is modeled as the outcome of a game played between a bureaucrat, a lobby, and the public. There is a moral cost of corruption for the bureaucrat, who is averse to letting the public down. We study how the behavior of the lobby and the bureaucrat depend on perceived public beliefs, when these are constant and when they are allowed to vary over time. With time-varying beliefs, corruption is more likely when the horizon of the game is relatively long and when public beliefs are initially low and are updated fast.psychological games, corruption, bureaucracy, guilt, third party

Subject-specific Performance Information can worsen the Tragedy of the Commons: Experimental Evidence

The main aim of this article is to investigate the behavioral consequences of the provision of subject-specific information in the group effort levels chosen by players in an experimental CPR game. We examine two basic treatments, one with incomplete information and the other with complete information. In the former, subjects are informed only about their own individual payoffs and the aggregate extraction effort level of the group, and in the latter they are also informed about the individual effort levels and payoffs of each subject. Given this setting, the basic question we attempt to answer is: Will the provision of subject-specific performance information (i.e. individual’s effort levels and payoffs) improve or worsen the tragedy of the commons (i.e. an exploitation effort level greater than the socially optimum level)? In order to motivate our hypotheses and explain our experimental results at the individual level, we make use of the theory of learning in games, which goes beyond standard non-cooperative game theory, allowing us to explore the three basic benchmarks in the commons context: Nash equilibrium, Pareto efficient, and open access outcomes. We use several learning and imitation theoretical models that are based on contrasting assumptions about the level of rationality and the information available to subjects, namely: best response, imitate the average, mix of best response and imitate the average, imitate the best and follow the exemplary learning rules. Finally, in order to econometrically test the hypotheses formulated from the theoretical predictions we use a random-effects model to assess the explanatory power of the different selected behavioral learning and imitation rules.Common Property Resources, Information, Learning and Imitation, Experimental Economics.