Strategic Capacity Planning Problems in Revenue‐Sharing Joint Ventures

Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/154244/1/poms13128_am.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/154244/2/poms13128.pd

Coordination and transfer

We study the ability of subjects to transfer principles between related coordination games. Subjects play a class of order statistic coordination games closely related to the well-known minimum (or weak-link) and median games (Van Huyck et al. in Am Econ Rev 80:234–248, 1990, Q J Econ 106(3):885–910, 1991). When subjects play a random sequence of games with differing order statistics, play is less sensitive to the order statistic than when a fixed order statistic is used throughout. This is consistent with the prediction of a simple learning model with transfer. If subjects play a series of similar stag hunt games, play converges to the payoff dominant equilibrium when a convention emerges, replicating the main result of Rankin et al. (Games Econ Behav 32:315–337, 2000). When these subjects subsequently play a random sequence of order statistic games, play is shifted towards the payoff dominant equilibrium relative to subjects without previous experience. The data is consistent with subjects absorbing a general principle, play of the payoff dominant equilibrium, and applying it in a new related setting

Volatile Decision Dynamics: Experiments, Stochastic Description, Intermittency Control, and Traffic Optimization

The coordinated and efficient distribution of limited resources by individual decisions is a fundamental, unsolved problem. When individuals compete for road capacities, time, space, money, goods, etc., they normally make decisions based on aggregate rather than complete information, such as TV news or stock market indices. In related experiments, we have observed a volatile decision dynamics and far-from-optimal payoff distributions. We have also identified ways of information presentation that can considerably improve the overall performance of the system. In order to determine optimal strategies of decision guidance by means of user-specific recommendations, a stochastic behavioural description is developed. These strategies manage to increase the adaptibility to changing conditions and to reduce the deviation from the time-dependent user equilibrium, thereby enhancing the average and individual payoffs. Hence, our guidance strategies can increase the performance of all users by reducing overreaction and stabilizing the decision dynamics. These results are highly significant for predicting decision behaviour, for reaching optimal behavioural distributions by decision support systems, and for information service providers. One of the promising fields of application is traffic optimization.Comment: For related work see http://www.helbing.or

It is Hobbes, not Rousseau:an experiment on voting and redistribution

We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothingWe thank Iris Bohnet, Tim Cason, David Cooper, John Duffy, Maia Guell, John Van Huyck and Robin Mason for helpful conversations and encouragement. The comments of the Editor and two referees helped improve the paper. We gratefully acknowledge the financial support from Spain’s Ministry of Science and Innovation under grants CONSOLIDER INGENIO 2010 CSD2006-0016 (all authors), ECO2009-10531 (Cabrales), ECO2008-01768 (Nagel) and the Comunidad de Madrid under grant Excelecon (Cabrales), the Generalitat de Catalunya and the CREA program (Nagel), and project SEJ2007-64340 of Spain’s Ministerio de Educación y Ciencia (Rodríguez Mora).Publicad

The limit to behavioral inertia and the power of default in voluntary contribution games

It is well documented that people are reluctant to switch from a default option. We experimentally test the robustness of this behavioral inertia in a collective decision-making setting by varying the default option type and the decision-making environment. We examine the impacts of automatic-participation and no-participation default options on subjects’ participation in a public goods provision and their contributions. Two variants of public goods game are employed: the linear and the threshold public goods games. The study shows the evidence of partial stickiness rather than complete stickiness of default options as indicated in empirical studies. Our experimental results square with the evidence of behavioral inertia only when the automatic-participation default is used. This default boosts contributions in the linear public goods game but not in the threshold public goods game. The evidence of partial stickiness is robust to the variation of the game employed, but the effect on contribution is sensitive to it

Geometric representations for minimalist grammars

We reformulate minimalist grammars as partial functions on term algebras for strings and trees. Using filler/role bindings and tensor product representations, we construct homomorphisms for these data structures into geometric vector spaces. We prove that the structure-building functions as well as simple processors for minimalist languages can be realized by piecewise linear operators in representation space. We also propose harmony, i.e. the distance of an intermediate processing step from the final well-formed state in representation space, as a measure of processing complexity. Finally, we illustrate our findings by means of two particular arithmetic and fractal representations.Comment: 43 pages, 4 figure