Collaboration in Social Networks

The very notion of social network implies that linked individuals interact repeatedly with each other. This allows them not only to learn successful strategies and adapt to them, but also to condition their own behavior on the behavior of others, in a strategic forward looking manner. Game theory of repeated games shows that these circumstances are conducive to the emergence of collaboration in simple games of two players. We investigate the extension of this concept to the case where players are engaged in a local contribution game and show that rationality and credibility of threats identify a class of Nash equilibria -- that we call "collaborative equilibria" -- that have a precise interpretation in terms of sub-graphs of the social network. For large network games, the number of such equilibria is exponentially large in the number of players. When incentives to defect are small, equilibria are supported by local structures whereas when incentives exceed a threshold they acquire a non-local nature, which requires a "critical mass" of more than a given fraction of the players to collaborate. Therefore, when incentives are high, an individual deviation typically causes the collapse of collaboration across the whole system. At the same time, higher incentives to defect typically support equilibria with a higher density of collaborators. The resulting picture conforms with several results in sociology and in the experimental literature on game theory, such as the prevalence of collaboration in denser groups and in the structural hubs of sparse networks

Modeling Cognitive Social Capital and Corporate Social Responsibility (CSR) as Preconditions for Sustainable Networks of Relations

The paper studies the relationship between social capital (SC) and Corporate Social Responsibility (CSR) by investigating the idea of a virtuous circle between the level of SC and the implementation of CSR practices that favours the creation of cooperative networks between the firm and all its stakeholders by promoting the spread of social norms of trust, trustworthiness and cooperation. Following the literature on SC that stresses its multidimensional character (e.g. Paldam 2000), we consider two dimensions of this notion. Starting from the distinction introduced by Uphoff (1999), we take into account a cognitive and a structural idea of SC. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents.With regard to the concept of CSR, we adopt a contractarian approach and consider CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Among stakeholders, we distinguish between strong and weak stakeholders. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. They are, for example, skilled workers or institutional investors. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. They are, for example, unskilled workers. By using the tools of psychological game theory, the paper shows the role of cognitive social capital and the adoption of CSR practices in promoting the emergence of social norms of trust, trustworthiness and cooperation which favour the creation of cooperative networks between the firm and all its stakeholders (structural social capital). In particular, we show that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.

A survey on the nature, reasons for compliance and emergence of social norms

The aim of the paper is to offer a critical review of some of the most important contributions on the subject of social norms. The analysis will hinge upon a fundamental distinction between self-regarding and other-regarding reasons to action, which are supposed to represent two basic types of motivations making up the individual system of rational deliberation. Such a dichotomy will make it possible to divide the account of rules of behaviour in three categories, depending on the weight accorded to one rather than the other reason to action. The narrower concept is given by what will be called strictly-conceived convention, which coincides with Lewis's classical account of a convention. In this case, it is the self-regarding motive that actually provides an underpinning of such a regularity of behaviour, making it possible to build a system of convergent mutual expectations. The next category, that of broadly-conceived conventions are based on Sugden's earliest works on the subject; in this case, the self-regarding motive is still the crucial one, but conventions are not necessarily mutually beneficial, thus coming down to a standard Nash equilibrium, or evolutionary stable strategy, notion. Finally, with the final category of norms a decisive shift out of the self-interested justification is accomplished. In fact, these regularities are grounded on some forms of other-regarding behaviour, as Sudgen's model of normative expectations sets out clearly. The cognitive structure needed in order to generate such type of expectations leading to norms is then critically examined, reaching the conclusion that the account of norms provided in the received theory does not prove thoroughly satisfactory. Particularly, the notion of "empirical" expectation, as opposed to that of "causal" expectation, is deemed as the relevant one in order to build a system of mutual expectation in the case of norms; however, this concept does not help to explain how a norm comes out as an equilibrium of the social interaction, thus making the whole explanation arguably circular. We finally argue for the importance to ground the concept of norm on the dynamic evolution of expectations.

The Evolution of Social Contracts

Influential thinkers such as Young, Sugden, Binmore, and Skyrms have developed game-theoretic accounts of the emergence, persistence and evolution of social contracts. Social contracts are sets of commonly understood rules that govern cooperative social interaction within societies. These naturalistic accounts provide us with valuable and important insights into the foundations of human societies. However, current naturalistic theories focus mainly on how social contracts solve coordination problems in which the interests of the individual participants are aligned, not competition problems in which individual interests compete with group interests. In response, I set out to build on those theories and provide a comprehensive naturalistic account of the emergence, persistence and evolution of social contracts. My central claim is that social contracts have culturally evolved to solve cooperation problems, which include both coordination and competition problems. I argue that solutions to coordination problems emerge from “within-group” dynamics, while solutions to competition problems result largely from “between-group” dynamics

Dynamics of Internal Models in Game Players

A new approach for the study of social games and communications is proposed. Games are simulated between cognitive players who build the opponent's internal model and decide their next strategy from predictions based on the model. In this paper, internal models are constructed by the recurrent neural network (RNN), and the iterated prisoner's dilemma game is performed. The RNN allows us to express the internal model in a geometrical shape. The complicated transients of actions are observed before the stable mutually defecting equilibrium is reached. During the transients, the model shape also becomes complicated and often experiences chaotic changes. These new chaotic dynamics of internal models reflect the dynamical and high-dimensional rugged landscape of the internal model space.Comment: 19 pages, 6 figure

A Multi-Level Choice Theory

The Great Recession has called into question many tenets of Neo-classical Microeconomics. Neo-classical theory allows each agent only one fixed type, homo economicus, while not denying other possible types as in adverse selection. We propose that economic agents not only choose their market basket but also their types. Agents are members of groups and each group has social norms to which the agent more or less conforms. His/her market behavior trades off private well being which responds to prices but also social well being which responds to norms. We show how deviation from norms are determined. We also discuss other anomalies in the light of this model.

Law without the State: The theory of high engagement and the emergence of spontaneous legal order within commercial systems

Copyright @ 2010 Druzin B.H.This paper examines the idea that commercial law has the capacity to evolve spontaneously in the absence of a clear state authority because of its unique nature. I argue that the manner of interaction implied by commerce plays a crucial role in this ability as it involves a high degree of overall engagement. This I term “high engagement,” which I divide into two elements: repetition and the creation of clear cycles of interaction. Together they produce identifiable legal norms and subsequent compliance. Game theorists have long recognized the importance of repeated interaction in inducing cooperation; however, how the manner of commercial interaction itself facilitates this process has been left largely unexamined. Part I presents a brief overview of the concept of reciprocity and spontaneous law theory. In Part II, a more detailed explanation of the notion of high engagement is offered. Here I set out exactly how high engagement is instrumental in the emergence of legal norms. Finally, the paper concludes that the element of high engagement indeed plays a decisive role in commercial law’s ability to evolve and function in a decentralized, spontaneous fashion—an important insight in terms of the future international development of the modern law merchant as it emerges in the absence of a single legislative authority

Bargaining and Influence in Conflict Situations

[Excerpt] This chapter examines bargaining as an influence process through which actors attempt to resolve a social conflict. Conflict occurs when two or more interdependent actors have incompatible preferences and perceive or anticipate resistance from each other (Blalock 1989; Kriesberg 1982). Bargaining is a basic form of goal-directed action that involves both intentions to influence and efforts by each actor to carry out these intentions. Tactics are verbal and/or nonverbal actions designed to maneuver oneself into a favorable position vis-a-vis another or to reach some accommodation. Our treatment of bargaining subsumes the concept of negotiation (see Morley and Stephenson 1977). This chapter is organized around a conceptual framework that distinguishes basic types of bargaining contexts. We begin by introducing the framework and then present an overview of and analyze theoretical and empirical work on each type of bargaining context

Does virtuous circle between social capital and CSR exist? A “network of games” model and some empirical evidence

Social capital and corporate social responsibility (CSR) have received increasing attention in research on the role that elements such as trust, trustworthiness and social norms of reciprocity and cooperation may have in promoting socio-economic development. Although social capital and CSR seem to have features in common, their relationship has not yet been analysed in depth. This paper investigates the idea of a virtuous circle between the level of social capital and the implementation of CSR practices that fosters the creation of cooperative networks between the firm and all its stakeholders. By using both a theoretical approach developed by considering tools of network analysis and psychological game theory and an empirical approach based on original evidence from three case studies, this study shows the role that cognitive social capital (understood as a disposition to conform with ethical principles of cooperation) and the adoption of CSR practices may have in promoting the emergence of sustainable networks of relations between the firm and all its stakeholders (structural social capital).Social capital, Corporate Social Responsibility, Social norms, Network, Cooperation, Trust