scholarly journals Learning leads to bounded rationality and the evolution of cognitive bias in public goods games

2019 ◽  
Vol 9 (1) ◽  
Author(s):  
Olof Leimar ◽  
John M. McNamara
Keyword(s):  
Nash Equilibrium ◽  
Social Interactions ◽  
Bounded Rationality ◽  
Cognitive Bias ◽  
Time Horizon ◽  
Costs And Benefits ◽  
Cognitive Limitations ◽  
Public Goods Games ◽  
Social Partners ◽  
The Cost

Abstract In social interactions, including cooperation and conflict, individuals can adjust their behaviour over the shorter term through learning within a generation, and natural selection can change behaviour over the longer term of many generations. Here we investigate the evolution of cognitive bias by individuals investing into a project that delivers joint benefits. For members of a group that learn how much to invest using the costs and benefits they experience in repeated interactions, we show that overestimation of the cost of investing can evolve. The bias causes individuals to invest less into the project. Our explanation is that learning responds to immediate rather than longer-term rewards. There are thus cognitive limitations in learning, which can be seen as bounded rationality. Over a time horizon of several rounds of interaction, individuals respond to each other’s investments, for instance by partially compensating for another’s shortfall. However, learning individuals fail to strategically take into account that social partners respond in this way. Learning instead converges to a one-shot Nash equilibrium of a game with perceived rewards as payoffs. Evolution of bias can then compensate for the cognitive limitations of learning.

Bounded Rationality in the Centipede Game

Episteme ◽  
2011 ◽  
Vol 8 (3) ◽  
pp. 262-280 ◽  
Author(s):  
Ashton T. Sperry-Taylor
Keyword(s):  
Game Theory ◽  
Nash Equilibrium ◽  
Bounded Rationality ◽  
Real Life ◽  
Backward Induction ◽  
Rational Behavior ◽  
Normative Analysis ◽  
Cognitive Limitations ◽  
Real People ◽  
Rational Players

AbstractNormative game theory unsatisfactorily explains rational behavior. Real people do not behave as predicted, and what is prescribed as rational behavior is normally unattainable in real-life. The problem is that current normative analysis does not account for people's cognitive limitations – their bounded rationality. However, this paper develops an account of bounded rationality that explains the rationality of more realistic behavior. I focus on the Centipede Game, in which boundedly rational players explore and test others' immediate behavior, until they can apply limited backward induction. The result is that the game has a solution in the form of a subjective Nash equilibrium, which boundedly rational players can possibly realize.

scholarly journals Cooperation in Threshold Public Projects with Binary Actions

2021 ◽  
Author(s):  
Yiling Chen ◽  
Biaoshuai Tao ◽  
Fang-Yi Yu
Keyword(s):  
Nash Equilibrium ◽  
Decision Problem ◽  
Public Project ◽  
The Public ◽  
Public Projects ◽  
Public Goods Games ◽  
Np Complete ◽  
The Cost ◽  
Participation Decisions ◽  
Public Good Games

When can cooperation arise from self-interested decisions in public goods games? And how can we help agents to act cooperatively? We examine these classical questions in a pivotal participation game, a variant of public good games, where heterogeneous agents make binary participation decisions on contributing their endowments, and the public project succeeds when it has enough contributions. We prove it is NP-complete to decide the existence of a cooperative Nash equilibrium such that the project succeeds. We demonstrate that the decision problem becomes easy if agents are homogeneous enough. We then propose two algorithms to help cooperation in the game. Our first algorithm adds an external investment to the public project, and our second algorithm uses matching funds. We show the cost to induce a cooperative Nash equilibrium is near-optimal for both algorithms. Finally, the cost of matching funds can always be smaller than the cost of adding an external investment. Intuitively, matching funds provide a greater incentive for cooperation than adding an external investment does.

Improving the quality of abstract reporting for economic analyses in oncology.

2012 ◽  
Vol 30 (34_suppl) ◽  
pp. 109-109
Author(s):  
Maria Yi Ho ◽  
Kelvin Chan ◽  
Stuart Peacock ◽  
Winson Y. Cheung
Keyword(s):  
Health Economic ◽  
Time Horizon ◽  
Quality Score ◽  
Costs And Benefits ◽  
Expert Rating ◽  
Economic Analyses ◽  
The Cost ◽  
Abstract Reporting ◽  
Over Time

109 Background: Increasing costs of cancer drugs underscore the importance of EA, which convey key information about the relative costs and benefits of new interventions. Although guidelines for abstracts exist for phase I, II, and III oncology trials, similar recommendations for EA are lacking. Our objectives were to 1) identify items considered to be essential for EA abstracts; 2) evaluate the quality of EA abstracts submitted to ASCO, ASH, and ISPOR meetings; and 3) propose guidelines for future reporting. Methods: Health economic experts were surveyed and asked to rate each of 24 possible EA elements on a 5-point Likert scale. A scoring system for abstract quality (0=poor and 100=excellent) was devised based on EA elements with an average expert rating ≥ 3.5. All EA abstracts from ASCO (‘97–‘09), ASH (‘04–‘09) and ISPOR (‘97–‘09) were reviewed and assigned a quality score. Results: Of 99 experts surveyed, 50 (51%) responded. Characteristics of respondents: average age = 53; male = 78%; US / Europe / Canada = 54% / 28% / 18%. A total of 216 abstracts were reviewed: ASCO 53%, ASH 14% and ISPOR 33%. Median quality score was 75 (range 48 to 93), but notable deficiencies were observed. For instance, the cost perspective of the EA was reported in only 61% of abstracts, while the time horizon was described in only 47%. An association was seen between year of presentation and overall quality of abstracts (p=0.001), with those from recent years demonstrating better quality scores. There were also disparities in quality scores among EA of different cancer sites (p=0.005). Conclusions: Quality of EA abstracts for oncology has improved over time, but there is room for improvement. Abstracts may be enhanced using guidelines derived from our survey of experts (see table). [Table: see text]

Hostile Takeovers and Anti-takeover Defenses in the Russian Corporate Market

2007 ◽  
pp. 70-84 ◽  
Author(s):  
E. Demidova
Keyword(s):  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Hostile Takeovers ◽  
Russian Market ◽  
Takeover Defenses ◽  
The Cost ◽  
European Markets

This article analyzes definitions and the role of hostile takeovers at the Russian and European markets for corporate control. It develops the methodology of assessing the efficiency of anti-takeover defenses adapted to the conditions of the Russian market. The paper uses the cost-benefit analysis, where the costs and benefits of the pre-bid and post-bid defenses are compared.

scholarly journals Costs and Benefits of Autonomous Shipping—A Literature Review

2021 ◽  
Vol 11 (10) ◽  
pp. 4553
Author(s):  
Ewelina Ziajka-Poznańska ◽  
Jakub Montewka
Keyword(s):  
Literature Review ◽  
Business Models ◽  
Financial Models ◽  
State Of The Art ◽  
Costs And Benefits ◽  
Capital Costs ◽  
Research Activities ◽  
Benefit Estimation ◽  
Autonomous Ship ◽  
The Cost

The development of autonomous ship technology is currently in focus worldwide and the literature on this topic is growing. However, an in-depth cost and benefit estimation of such endeavours is in its infancy. With this systematic literature review, we present the state-of-the-art system regarding costs and benefits of the operation of prospective autonomous merchant ships with an objective for identifying contemporary research activities concerning an estimation of operating, voyage, and capital costs in prospective, autonomous shipping and vessel platooning. Additionally, the paper outlines research gaps and the need for more detailed business models for operating autonomous ships. Results reveal that valid financial models of autonomous shipping are lacking and there is significant uncertainty affecting the cost estimates, rendering only a reliable evaluation of specific case studies. The findings of this paper may be found relevant not only by academia, but also organisations considering to undertake a challenge of implementing Maritime Autonomous Surface Ships in their operations.

scholarly journals A Constrained Markovian Diffusion Model for Controlling the Pollution Accumulation

Mathematics ◽  
2021 ◽  
Vol 9 (13) ◽  
pp. 1466
Author(s):  
Beatris Adriana Escobedo-Trujillo ◽  
José Daniel López-Barrientos ◽  
Javier Garrido-Meléndez
Keyword(s):  
Dynamic Programming ◽  
Dirichlet Problem ◽  
Stochastic Control ◽  
Finite Time ◽  
Time Horizon ◽  
Closed Loop ◽  
Programming Techniques ◽  
Pollution Accumulation ◽  
Finite Time Horizon ◽  
The Cost

This work presents a study of a finite-time horizon stochastic control problem with restrictions on both the reward and the cost functions. To this end, it uses standard dynamic programming techniques, and an extension of the classic Lagrange multipliers approach. The coefficients considered here are supposed to be unbounded, and the obtained strategies are of non-stationary closed-loop type. The driving thread of the paper is a sequence of examples on a pollution accumulation model, which is used for the purpose of showing three algorithms for the purpose of replicating the results. There, the reader can find a result on the interchangeability of limits in a Dirichlet problem.

Desire for Attention

1977 ◽  
Vol 11 (3) ◽  
pp. 157-161 ◽  
Author(s):  
A. T. Welford
Keyword(s):  
Social Skills ◽  
Personal Relationships ◽  
Costs And Benefits ◽  
Community Attitudes ◽  
Inhibit Action ◽  
The World ◽  
Inhibitory Feedback ◽  
The Cost ◽  
The Relationship

Seeking of attention appears to be intimately bound up with certain principles of motivation, especially the seeking of observable results of action and of optimum levels of stimulation, variety and challenge, and the relationship between results and the cost of achieving them—a high cost will tend to inhibit action but enhance the value subsequently placed upon what is achieved. These principles can be applied to personal relationships: thus friendship can be regarded as a situation involving facilitative feedback between persons, hostility as involving inhibitory feedback and loneliness as occurring when there is no feedback. Which of these situations occurs appears to depend upon the relationships between the costs and benefits of interaction between the persons concerned. The care of psychiatric or senile patients in the community appears likely to impose demands for attention which are unreasonably severe (“costly”). Any attempt to change community attitudes in the hope of securing greater acceptance of such demands appears to be unrealistic. Substantial benefits could probably be attained in many cases from training in skills, especially social skills, which would enable patients to cope more effectively with the world as it is.

scholarly journals The self as a prior for the other: social learning under paranoia

2021 ◽  
Author(s):  
Joseph M Barnby ◽  
Nichola Raihani ◽  
Peter Dayan
Keyword(s):  
Bayesian Inference ◽  
Social Interactions ◽  
Social Preferences ◽  
Value Orientation ◽  
Social Value ◽  
The Self ◽  
The Other ◽  
Social Value Orientation ◽  
Inference Process ◽  
Social Partners

To benefit from social interactions, people need to predict how their social partners will behave. Such predictions arise through integrating prior expectations with evidence from observations, but where the priors come from and whether they influence the integration is not clear. Furthermore, this process can be affected by factors such as paranoia, in which the tendency to form biased impressions of others is common. Using a modified social value orientation (SVO) task in a large online sample (n=697), we showed that participants used a Bayesian inference process to learn about partners, with priors that were based on their own preferences. Paranoia was associated with preferences for earning more than a partner and less flexible beliefs regarding a partner’s social preferences. Alignment between the preferences of participants and their partners was associated with better predictions and with reduced attributions of harmful intent to partners.

scholarly journals Cheater-altruist synergy in immunopathogenic ecological public goods games

2017 ◽  
Author(s):  
Bryce Morsky ◽  
Dervis Can Vural
Keyword(s):  
Immune System ◽  
Public Goods ◽  
Free Riding ◽  
Average Growth ◽  
Public Goods Games ◽  
Cheating Behavior ◽  
Long Run ◽  
Population Dynamics Models ◽  
The Cost ◽  
Dynamics Models

AbstractMuch research has focused on the deleterious effects of free-riding in public goods games, and a variety of mechanisms that suppresses cheating behavior. Here we argue that under certain conditions cheating behavior can be beneficial to the population. In a public goods game, cheaters do not pay for the cost of the public goods, yet they receive the benefit. Although this free-riding harms the entire population in the long run, the success of cheaters may aid the population when there is a common enemy that antagonizes both cooperators and cheaters. Here we study models in which an immune system antagonizes a cooperating pathogen. We investigate three population dynamics models, and determine under what conditions the presence of cheaters help defeat the immune system. The mechanism of action is that a polymorphism of cheaters and altruists optimizes the average growth rate. Our results give support for a possible synergy between cooperators and cheaters in ecological public goods games.

scholarly journals THE COST-BENEFIT ANALYSIS OF THE ROMANIAN NATIONAL GAMBLING OFFICE

2020 ◽  
Vol 13(62) (2) ◽  
pp. 157-166
Author(s):  
Ștefan Bulboacă ◽  
Ovidiu Mircea Țierean
Keyword(s):  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Economic Effects ◽  
Public Institution ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Societal Costs ◽  
Gambling Industry ◽  
The Cost ◽  
The Way

"This paper aims to evaluate the economic effects that the Romanian National Gambling Office has over the gambling industry and to determine whether this public institution brings enough benefits to cover the costs. The aim of the research was to gather information about the Romanian gambling industry, the way that this industry is managed and to make a comparison between its societal costs and benefits. "

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