Efficiency of competition in insurance markets with adverse selection

There is a general presumption that competition is a good thing. In this paper we show that competition in the insurance markets can be bad when there is adverse selection. Using the dual theory of choice under risk, we are able to fully characterize both the competitive and the monopoly market outcomes. When there are two types of risk, the monopoly dominates competition if and only if competition leads to market unravelling. When there are a continuum of types the efficiency of competition is less trivial. In effect monopoly is shown to provide better insurance but at the cost of driving out some agents from the market. Performing simulation for different distributions of risk, we find that monopoly in general performs (much) better than competition in terms of the realization of the gains from trade across all traders in equilibrium. The reason is that the monopolist can exploit its market power to relax the incentive constraints

Separating Agent-Functioning and Inter-Agent Coordination by Activated Modules: The DECOMAS Architecture

The embedding of self-organizing inter-agent processes in distributed software applications enables the decentralized coordination system elements, solely based on concerted, localized interactions. The separation and encapsulation of the activities that are conceptually related to the coordination, is a crucial concern for systematic development practices in order to prepare the reuse and systematic integration of coordination processes in software systems. Here, we discuss a programming model that is based on the externalization of processes prescriptions and their embedding in Multi-Agent Systems (MAS). One fundamental design concern for a corresponding execution middleware is the minimal-invasive augmentation of the activities that affect coordination. This design challenge is approached by the activation of agent modules. Modules are converted to software elements that reason about and modify their host agent. We discuss and formalize this extension within the context of a generic coordination architecture and exemplify the proposed programming model with the decentralized management of (web) service infrastructures

What Is an Act of Engagement? Between the Social, Collegial and Institutional Protocols

Engagement is not synonymous with commitment, even though both words are used in translations between English, French, and German. However, engagement is also not some supplementary phenomenon or a technical term that the phrase social acts already includes in itself or that the concepts of ‘commitment’ or ‘joint commitment’ somehow necessarily imply. In this article I would like to describe a special kind of social act and determine the function they have in relation between various agents. Most importantly, I would like to define their significance in the transformation of a group into an institution or higher order entity. My premise is that there are acts whose aim is to engage all others, since they refer to all of us together, and in so doing reduce negative (social) “acts” as well as various asocial behaviors within a group or institution. In this sense, engaged acts could alternatively also belong to a kind of institutional act, since they introduce certain adjustments to the institution, changing or modifying its rules, increasing its consistency and efficiency.First book series in Philosophy of the Social Sciences that specifically focuses on Philosophy of Sociality and Social Ontology. Studies in the Philosophy of Sociality Volume 1

Integrating BDI agents with Agent-based simulation platforms

Agent-Based Models (ABMs) is increasingly being used for exploring and supporting decision making about social science scenarios involving modelling of human agents. However existing agent-based simulation platforms (e.g., SWARM, Repast) provide limited support for the simulation of more complex cognitive agents required by such scenarios. We present a framework that allows Belief-Desire Intention (BDI) cognitive agents to be embedded in an ABM system. Architecturally, this means that the "brains" of an agent can be modelled in the BDI system in the usual way, while the "body" exists in the ABM system. The architecture is exible in that the ABM can still have non-BDI agents in the simulation, and the BDI-side can have agents that do not have a physical counterpart (such as an organisation). The framework addresses a key integration challenge of coupling event-based BDI systems, with time-stepped ABM systems. Our framework is modular and supports integration off-the-shelf BDI systems with off-the-shelf ABM systems. The framework is Open Source, and all integrations and applications are available for use by the modelling community