Predicting Human Cooperation

The Prisoner's Dilemma has been a subject of extensive research due to its importance in understanding the ever-present tension between individual self-interest and social benefit. A strictly dominant strategy in a Prisoner's Dilemma (defection), when played by both players, is mutually harmful. Repetition of the Prisoner's Dilemma can give rise to cooperation as an equilibrium, but defection is as well, and this ambiguity is difficult to resolve. The numerous behavioral experiments investigating the Prisoner's Dilemma highlight that players often cooperate, but the level of cooperation varies significantly with the specifics of the experimental predicament. We present the first computational model of human behavior in repeated Prisoner's Dilemma games that unifies the diversity of experimental observations in a systematic and quantitatively reliable manner. Our model relies on data we integrated from many experiments, comprising 168,386 individual decisions. The computational model is composed of two pieces: the first predicts the first-period action using solely the structural game parameters, while the second predicts dynamic actions using both game parameters and history of play. Our model is extremely successful not merely at fitting the data, but in predicting behavior at multiple scales in experimental designs not used for calibration, using only information about the game structure. We demonstrate the power of our approach through a simulation analysis revealing how to best promote human cooperation.Comment: Added references. New inline citation style. Added small portions of text. Re-compiled Rmarkdown file with updated ggplot2 so small aesthetic changes to plot

Introducing disappointment dynamics and comparing behaviors in evolutionary games : Some simulation results

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly citedThe paper presents an evolutionary model, based on the assumption that agents may revise their current strategies if they previously failed to attain the maximum level of potential payoffs. We offer three versions of this reflexive mechanism, each one of which describes a distinct type: spontaneous agents, rigid players, and 'satisficers'. We use simulations to examine the performance of these types. Agents who change their strategies relatively easily tend to perform better in coordination games, but antagonistic games generally lead to more favorable outcomes if the individuals only change their strategies when disappointment from previous rounds surpasses some predefined threshold.Peer reviewedFinal Published versio

Imitation - Theory and Experimental Evidence

We introduce a generalized theoretical approach to study imitation and subject it to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are due to different informational assumptions, not to different behavioral rules. It is more important whom one imitates rather than how. In a laboratory experiment we test the different theories by systematically varying information conditions. We find significant effects of seemingly innocent changes in information. Moreover, the generalized imitation model predicts the differences between treatments well. The data provide support for imitation on the individual level, both in terms of choice and in terms of perception. But imitation is not unconditional. Rather individuals' propensity to imitate more successful actions is increasing in payoff differences

Modeling inertia causatives:validating in the password manager adoption context

Cyber criminals are benefiting from the fact that people do not take the required precautions to protect their devices and communications. It is the equivalent of leaving their home’s front door unlocked and unguarded, something no one would do. Many efforts are made by governments and other bodies to raise awareness, but this often seems to fall on deaf ears. People seem to resist changing their existing cyber security practices: they demonstrate inertia. Here, we propose a model and instrument for investigating the factors that contribute towards this phenomenon

Saving Incentives: What May Work, What May Not

[Excerpt] Saving is the portion of national output that is not consumed and represents resources that can be used to increase, replace, or improve the nation’s capital stock. The U.S. net national saving rate reached a post-war peak of 12.4% in 1965 and has then trended downward since to a low of 0.8% in 2005. Many analysts claim that saving is too low. Among the Organization for Economic Cooperation and Development (OECD) countries, the United States has the third lowest saving rate. Survey evidence suggests that people know why they should save, but many don’t save, especially lower-income individuals and families. Several reasons have been offered to explain the declining personal saving rate and the relatively high proportion of individuals and families that do not save. Economic reasons start from the premise that individuals and families are rational and make optimal decisions about consumption and saving throughout the life course. Low saving rates are then explained by economic disincentives induced by government policy or by life cycle changes in the propensity to save. Behavioral reasons start from the premise that individuals and families do not always make optimal decisions regarding consumption and saving

The propensity function as formal passkey to economic action

The purpose of the present paper is to demonstrate how the interaction of the structural axiomatic core and the behavioral propensity function produces plausible outcomes in the product market. The propensity function is a compact formal expression of random, semi-random, and deterministic behavioral assumptions. Its two components are direction and magnitude of the rate of change of an elementary axiomatic variable. A type-C propensity function is the formal container for a familiar conception that Samuelson identified as qualitative prediction. Two type-C functions are sufficient to produce stochastic stability and optimality in the product market.New framework of concepts; Structure-centric; Axiom set; Qualitative prediction; Tendency laws; Separability; Determinism–indeterminism; Information function; Action function

Effects of user experience on user resistance to change to the voice user interface of an in‑vehicle infotainment system: Implications for platform and standards competition

This study examines the effects of user experience on user resistance to change—particularly, on the relationship between user resistance to change and its antecedents (i.e. switching costs and perceived value) in the context of the voice user interface of an in-vehicle infotainment (IVI) system. This research offers several salient findings. First, it shows that user experience positively moderates the relationship between uncertainty costs (one type of switching cost) and user resistance. It also negatively moderates the association between perceived value and user resistance. Second, the research test results demonstrate that users with a high degree of prior experience with the voice user interface of other smart devices exhibit low user resistance to change to the voice user interface in an IVI system. Third, we show that three types of switching costs (transition costs, in particular) may directly influence users to resist a change to the voice user interface. Fourth, our test results empirically demonstrate that both switching costs and perceived value affect user resistance to change in the context of an IVI system, which differs from the traditional IS research setting (i.e. enterprise systems). These findings may guide not only platform leaders in designing user interfaces, user experiences, and marketing strategies, but also firms that want to defend themselves from platform envelopment while devising defensive strategies in platform and standards competition

Getting By With The Advice Of Their Friends: Ceos' Advice Networks And Firms' Strategic Responses To Poor Performance

This paper theorizes that relatively poor firm performance can prompt chief executive officers (CEOs) to seek more advice from executives of other firms who are their friends or similar to them and less advice from acquaintances or dissimilar others and suggests how and why this pattern of advice seeking could reduce firms' propensity to change corporate strategy in response to poor performance. We test our hypotheses with large-sample survey data on the identities of CEOs' advice contacts and archival data on firm performance and corporate strategy. The results confirm our hypotheses and show that executives' social network ties can influence firms' responses to economic adversity, in particular by inhibiting strategic change in response to relatively poor firm performance. Additional findings indicate that CEOs' advice seeking in response to low performance may ultimately have negative consequences for subsequent performance, suggesting how CEOs' social network ties could play an indirect role in organizational decline and downward spirals in firm performance.Business Administratio

Overcoming inertia: insights from evolutionary economics into improved energy and climate policy

The mainstream view in economics has been a key factor in designing climate policies. Given that the controversy over the “efficiency paradox” has shown that mainstream economics is not neutral in the way it deals with climate change, the purpose of this paper is to investigate what insights could come out of analysing this crucial issue through an alternative economic framework. The choice of an evolutionary line of thought is then quite straightforward. It stems from both its departure from the perfect rationality hypothesis and its shift of focus towards a better understanding of innovation, system change and economic dynamics. All together this renders evolutionary economics a suitable complementary framework for designing climate policies and for managing the needed transition towards a low carbon economy. Most notably, the evolutionary framework allows us to depict the presence of two sources of inertia (i.e at the levels of individuals through “habits” and at the level of socio-technical systems) that mutually reinforce each other in a path-dependent manner. Accordingly, decision-makers should design measures (e.g. commitment strategies, niche management, etc.) that specifically target those change-resisting factors as they tend to reduce the efficiency of traditional instruments.Climate change ; energy consumption ; evolutionary economics ; habits; technological lock in ; transitions ;