Evolutionary games on graphs

Game theory is one of the key paradigms behind many scientific disciplines from biology to behavioral sciences to economics. In its evolutionary form and especially when the interacting agents are linked in a specific social network the underlying solution concepts and methods are very similar to those applied in non-equilibrium statistical physics. This review gives a tutorial-type overview of the field for physicists. The first three sections introduce the necessary background in classical and evolutionary game theory from the basic definitions to the most important results. The fourth section surveys the topological complications implied by non-mean-field-type social network structures in general. The last three sections discuss in detail the dynamic behavior of three prominent classes of models: the Prisoner's Dilemma, the Rock-Scissors-Paper game, and Competing Associations. The major theme of the review is in what sense and how the graph structure of interactions can modify and enrich the picture of long term behavioral patterns emerging in evolutionary games.Comment: Review, final version, 133 pages, 65 figure

Essays in finance and behavioral economics

This dissertation consists of two chapters on finance and experimental economics. The first chapter studies the dynamic portfolio optimization problem with reinforcement learning. I evaluate several algorithms on simulated data to document their convergence properties and sample efficiencies. I also apply a state-of-the-art algorithm on two empirical problems and show that they outperform other traditional strategies. The second chapter studies alternating bargaining games, by proposing an ultimatum game with uncertainties. I model the two-stage game as a screening game that incorporates the social factor of fairness, and run experiments to analyze how participants behave in response to bargaining power shift

Experimental Investigations on Fairness and Social Norms in Allocation Settings

The research agenda that guides this dissertation is characterized by the three aspects specified in the title. First, all of the projects are experimental investigations. That is, I apply the method of incentivized economic experiments in order to answer research questions through the generation of behavioral data in the "laboratory". Second, all of the experiments involve the elicitation of fairness perceptions or perceptions of social norms. Third, the experimental paradigms used in the projects represent allocation settings, where some active individuals decide about how resources are allocated, while some passive subjects depend on these decisions. Finally, the majority of the projects is connected through a methodological aspect, since most of the experiments contain coordination games, through which I try to draw inferences about the subjects´ traits on the individual level. The combined data of the projects indicate large potential to apply coordination games as an incentivized crowd wisdom device and to use coordination choices on the individual level as a tractable tool to extract private information

Computations in the social brain

This thesis consists of three empirical chapters that investigate elements of human social behavior, adherence to and violations of social norms, and the computational and neurological underpinnings thereof. I focus on three behavioral paradigms in particular – the attacker-defender contest, the trust game, and the ultimatum game – which model asymmetrical conflicts, generosity and reciprocity, and norms of fairness, respectively. Ultimately, each chapter acts as a building block contributing a different perspective to the study of human sociality. Using economic games, computational models based on the principle of utility, and model-based neuroimaging, my research contributes to the scientific endeavor working to crack the “elaborate and secret code that is written nowhere, known by none, and understood by all” (Sapir, 1927, p.137)Social decision makin

Take the money and run: psychopathic behavior in the trust game

We study the association among different sources of individual differences such as personality, cognitive ability and risk attitudes with trust and reciprocate behavior in an incentivized experimental binary trust game in a sample of 220 (138 females) undergraduate students. The game involves two players, player 1 (P1) and player 2 (P2). In the first stage, P1 decides whether to trust and let P2 decide, or to secure an egalitarian payoff for both players. If P1 trusts P2, the latter can choose between a symmetric payoff that is double than the secure alternative discarded by P1, and an asymmetric payoff in which P2 earns more than in any other case but makes P1 worse off. Before the main experiment, we obtained participants’ scores for Abstract Reasoning (AR), risk attitudes, basic personality characteristics, and specific traits such as psychopathy and impulsivity. During the main experiment, we measured Heart Rate (HR) and ElectroDermal Activity (EDA) variation to account for emotional arousal caused by the decision and feedback processes. Our main findings indicate that, on one hand, P1 trust behavior associates to positive emotionality and, specifically, to the extraversion’s warmth facet. In addition, the impulsivity facet of positive urgency also favors trust behavior. No relation to trusting behavior was found for either other major personality aspects or risk attitudes. The physiological results show that participants scoring high in psychopathy exhibit increased EDA and reduced evoked HR deceleration at the moment in which they are asked to decide whether or not to trust. Regarding P2, we find that AR ability and mainly low disagreeable disinhibition favor reciprocal behavior. Specifically, lack of reciprocity significantly relates with a psychopathic, highly disinhibited and impulsive personality. Thus, the present study suggests that personality characteristics would play a significant role in different behaviors underlying cooperation, with extraversion/positive emotionality being more relevant for initiating cooperation, and low disagreeable disinhibition for maintaining it

The neurocognitive development of social decision-making

This thesis describes a series of experiments that investigated the relation between brain development and the development of social behaviorLEI Universiteit LeidenDevelopmental pathways of social-emotional and cognitive functioning - ou

Cost optimisation of hybrid institutional incentives for promoting cooperation in finite populations

In this paper, we rigorously study the problem of cost optimisation of hybrid (mixed) institutional incentives, which are a plan of actions involving the use of reward and punishment by an external decision-maker, for maximising the level (or guaranteeing at least a certain level) of cooperative behaviour in a well-mixed, finite population of self-regarding individuals who interact via cooperation dilemmas (Donation Game or Public Goods Game). We show that a mixed incentive scheme can offer a more cost-efficient approach for providing incentives while ensuring the same level or standard of cooperation in the long-run. We establish the asymptotic behaviour (namely neutral drift, strong selection, and infinite-population limits). We prove the existence of a phase transition, obtaining the critical threshold of the strength of selection at which the monotonicity of the cost function changes and providing an algorithm for finding the optimal value of the individual incentive cost. Our analytical results are illustrated with numerical investigations. Overall, our analysis provides novel theoretical insights into the design of cost-efficient institutional incentive mechanisms for promoting the evolution of cooperation in stochastic systems