The conditional altruist and the Samaritan’s dilemma

The Samaritan’s dilemma refers to any situation in which an actual or expected altruistic behavior of one actor generates an incentive for exploitation on the recipient, such that the altruist suffers a welfare loss beyond the cost of the originally intended transfer. This study hypothesized that the Samaritan’s dilemma condition does (not) apply when the help given is a substitute for (complement to) the effort of the beneficiary to help herself. Using static and sequential game analyses, it is proven that either substitution or complementary condition could arise in the act of giving and receiving help. It is in the substitution condition only that the Samaritan dilemma arises. The players in a sequential game, with the first-mover advantage, can transform the game’s payoffs by setting assistance or work effort at the outset that forces the other player to adjust. Thus, Buchanan’s Samaritan’s dilemma is not a universally strategic outcome in the altruistic acts of giving. The empirical part tested if the Samaritan’s dilemma pervades or not in Philippine households by investigating the effects of expenditures of gifts on work hours. Household total transfers (consumption gifts plus remittances) and household members’ work effort are found substitutes. Thus, the Samaritan’s dilemma equilibrium is implied. However, there is also an implied equilibrium outside that of the Samaritan’s dilemma among high-effort workers: for these theoretically "altruist" workers, the gifts and income transfers are complementary to work hours.

Groundwater Extraction in the South Korea’s Jeju Island: A Real Options Game Approach under Price Uncertainty

This paper uses a standard non-cooperative sequential game with two homogeneous players to analyze investment options of groundwater development project in South Korea’s Jeju island. The model is constructed as an option game taking the uncertainty of water price and the irreversibility of investment into account. The results show that the threshold water price of follower increases with the investment scale of both the leader and the follower while the threshold water price for the leader decreases as the investment scale of the leader increases. This makes the leader choose strategies to maximize the amount of groundwater extraction regardless of the follower’s strategy. Based on the results, it is recommended for policymakers to manage sustainable use of groundwater based on the policy measures such as the groundwater extraction quota system.

Owner-Intruder contests with information asymmetry

We consider kleptoparasitic interactions between two individuals - the Owner and the Intruder - and model the situation as a sequential game in an extensive form. The Owner is in possession of a resource when another individual, the Intruder, comes along and may try to steal it. If the Intruder makes such a stealing attempt, the Owner has to decide whether to defend the resource; if the Owner defends, the Intruder can withdraw or continue with the stealing attempt. The individuals may value the resource differently and we distinguish three information cases: (a) both individuals know resource values to both of them, (b) individuals know only their own valuation, (c) individuals do not know the value at all. We solve the game in all three cases. We identify scenarios when it is beneficial for the individuals to know as much information as possible. We also identify several scenarios where knowing less seems better as well as show that an individual may not benefit from their opponent knowing less. Finally, we consider the same kind of interactions but without the option for the Intruder to withdraw. We find that, surprisingly, the Intruder typically fares better in that case.

Owner–Intruder contests with correlated resource values

We study a conflict of two individuals over a valuable resource. We construct a sequential game where the first individual, the Owner, decides whether to defend the resource and the other individual, the Intruder, decides whether to attack and try to steal the resource. Individuals know the value of the resource to themselves. This provides the individuals an estimate of the value of the resource to the opponent. We build a mathematical model that allows us to quantify and vary the accuracy of this estimate. We study how the outcomes of the game depend on the accuracy. We show that, in our setting, the accuracy does not matter to the Intruder but it does to the Owner. For resources of a large value, the Owner benefits from a smaller accuracy. However, for resources of a small value, the Owner benefits from a bigger accuracy.

Analysis of Strategic Interactions in the Armenia-Azerbaijan Nagorno-Karabakh Conflict Through the Prism of the Game Theory

Introduction. The paper attempts to analyze possible and probable strategic moves of the primary and secondary actors in the Armenia-Azerbaijan Nagorno-Karabakh conflict. Methods. To analyze this conflict the author uses the mathematical theory of games and some mathematical models and methods. The main methods and models include the following: Nash equilibrium, sequential game, Zermelos theorem, Zermelo-Kuno algorithm, and games with commitments. As the publication is an analytical and computational work, it mainly includes literature related to methodology and theory. Analysis. The publication not only contains the analysis of the strategic interactions between Armenia and Azerbaijan as primary actors, but also includes Russia as a secondary participant. Results. As a result, the author has drawn several conclusions. Firstly, the strategic interactions between two actors differ from strategic interactions among three actors in terms of possible payments and preferences. Secondly, in the strategic interactions between Armenia and Azerbaijan, the most likely interaction profile will be “A2 , B1 -C2 ” (not recognizing the independence of Nagorno Karabakh and not declaring war on Armenia) with a payment of “0:0”. The third conclusion is on the qualitative difference between the sequential game and the game with commitments among Armenia, Azerbaijan and Russia. In the second case, the Nash equilibrium consists of not recognizing the separatist regime by Armenia, not supporting Russia’s desire for Armenia to recognize and not declaring war on Armenia: SPNE = {E2, R4, A8}. However, unlike the first option, the equilibrium obtained in the game with commitments takes on a more stable structure in relation to different political processes.