Subgame Monotonicity in Extensive Form Evolutionary Games

A theory of subgame monotonicity is developed for finite extensive form games to model evolutionary processes that respect the subgame structure of the game. It is shown how these evolutionary processes can be decomposed into their evolution on smaller games and also recombined to simplify the analysis of the original game. When applied to the replicator dynamic, a generalization of the Wright manifold from population genetics is a natural consequence of monotonicity. Subgame monotonicity and the Wright manifold are also shown to arise naturally in imitation models based on the extensive form. Journal of Economic Literature Classification Numbers: C70, C72.     

International Environmental Agreements as Evolutionary Games

This paper applies evolutionary game theory to international environmental agreements (IEAs). Contrary to stage game models (Barrett in J Theor Politics 11:519–541, 1999, Eur Econ Rev 45:1835–1850, 2001), in an evolutionary equilibrium (EE) no signatory prefers to be outside the IEA and the EE is robust to trembles. With two populations, there is a unique interior EE when there is decreasing returns to abatement and small asymmetry in the externality differences across populations. At the interior EE, transfers from the poor to the rich can increase payoffs for all nations, but come at the expense of greater payoff inequality. Transfers can also eliminate the basin of attraction for the payoff inferior EE with decreasing returns to abatement and large asymmetry. Thus IEAs, such as the Kyoto Treaty, predicated on the polluter-pays and ability-to-pay principles may result in Pareto inferior outcomes.     

Evolutionary Stability in the Investment-Opportunism-Retaliation Game

Can economically efficient outcomes be obtained and sustained in the absence of externally enforced property rights? We study the evolutionary properties of a game that exhibits two well-defined Nash equilibria: one generates an inefficient outcome while the other set generates an efficient outcome supported by the potential for retaliation. Although standard forward-looking refinements eliminate the efficient equilibrium, neither equilibrium type satisfies strict evolutionary stability criteria. However, both types of equilibrium define strategies that are neutrally stable, which makes them vulnerable to drift in dynamic environments. We conduct computer simulation experiments in which players learn adaptively via a tournament selection mechanism called sophisticated experimentation. Our simulations demonstrate that while the system spends a disproportionately high proportion of time in the inefficient equilibrium set, the efficient equilibrium is pervasive as the system drifts back and forth between the equilibrium sets, never settling on one or the other.     

Communication in Repeated Games with Private Monitoring

The paper considers repeated games where each player can be observed by only a subset of the other players, and where players can make public announcements about the behavior of the players they observed. We address the following question: What is the minimal level of observability that is required to obtain efficient outcomes? The main result is that the limit set of sequential equilibrium payoffs, when the discount factor tends to one, contains the set of individual rational payoffs whenever each player is observed by at leasttwoother players.Journal of Economic LiteratureClassification Number: C73.     

The Evolutionary Stability of Auctions over Bargaining

This paper considers equilibrium in transaction mechanisms. In an environment with homogeneous buyers and sellers, which eliminates the advantage auctions possess of matching buyers and sellers, both auctions and bargaining are equilibria. However, only auctions are evolutionarily stable. This identifies a new advantage of auctions over bargaining, arising from the division of the gains from trade.Journal of Economic LiteratureClassification Numbers: C78, C73, D44.     

Delegation versus Veto in Organizational Games of Strategic Communication

In organizations, principals use decision rules to govern a more informed agent's behavior. We compare two such rules: delegation and veto. Recent work suggests that delegation dominates veto unless the divergence in preferences between the principal and the agent is so large that informative communication cannot take place. We show that this result does not hold in a reasonable model of veto versus delegation. In this model, veto dominates delegation for any feasible divergence in preferences, if it induces the agent to shut down low quality proposals that he would otherwise implement and if such projects have sufficient likelihood.     

An Experimental Study of Communication and Coordination in Noncooperative Games

This paper reports the results of an experiment designed to test the usefulness of alternative solution concepts to explain players' behavior in noncooperative games with preplay communication. In the experiment subjects communicate byplain conversationprior to playing a simple game. In this setting, we find that the presumption ofindividualisticandindependentbehavior underlying the concept of Nash equilibrium is inappropriate. Instead, we observe behavior to becoordinatedandcorrelated. Statistical tests reject Nash equilibrium as an explanation of observed play. The coalition proof correlated equilibrium of the game, however, explains the data when the possibility of errors by players is introduced.Journal of Economic LiteratureClassification Numbers: C72, C92.     

On the Dynamic Foundation of Evolutionary Stability in Continuous Models

We show in this paper that none of the existing static evolutionary stability concepts (ESS, CSS, uninvadability, NIS) is sufficient to guarantee dynamic stability in the weak topology with respect to standard evolutionary dynamics if the strategy space is continuous. We propose a new concept, evolutionary robustness, which is stronger than the previous concepts. Evolutionary robustness ensures dynamic stability for replicator dynamics in doubly symmetric games. Journal of Economic Literature Classification Numbers: C70, 72.     

On Forward Induction and Evolutionary and Strategic Stability

We analyze which normal form solution concepts capture the notion of forward induction, as defined by E. van Damme (1989, J. Econ. Theory48, 476-496) in the class of generic two player normal form games preceded by an outside option. We find that none of the known strategic stability concepts (including Mertens stable sets and hyperstable sets) capture this form of forward induction. On the other hand, we show that the evolutionary concept of EES set (J. Swinkels, 1992, J. Econ. Theory57, 306-332) is always consistent with forward induction. Journal of Economic Literature Classification Number: C72.     

The Evolutionary Stability of Moral Objections to Free Riding

In this study we explore the endogenous determination of moral objections to free riding. We first derive the individually rational behavior for given preferences. The motivational structure is allowed to evolve evolutionarily based on the comparison of the relative reproductive success of all possible preference types. The tastes that emerge are not necessarily those assumed in models resorting to altruism or moral obligations. In general, an effective social conscience preventing free riding need not be evolutionarily stable. In the first model that we explore, moral objections to free riding and, in turn, voluntary contributions to the provision of public goods are not to be expected with one notable exception, namely unanimity games. In the second model that we explore, the evolutionarily stable probability that an individual develops social conscience is positive.     

An Example of Dynamic (In)Consistency in Symmetric Extensive Form Evolutionary Games

An example is developed to show that equilibrium selection via dynamic stability, when applied to the normal form of extensive form games, is inconsistent with the subgame structure. Alternative dynamic approaches are proposed and discussed to circumvent this inconsistency. Journal of Economic Literature Classification Numbers: C70, C72.     

基于信息交流技术的组织权威演化机制

沿袭巴纳德组织理论关于信息交流技术对组织权威影响的思路,对组织权威的本质进行了讨论,在此基础上,进一步讨论了信息交流技术对组织权威演化进程的影响。     

Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games

In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our hot treatment the second player responds to the first player's observed action while in our cold treatment we follow the strategy method and have the second player decide on a contingent action for each and every possible first player move, without first observing this move. Our analysis centers on the degree to which subjects deviate from the maximization of their pecuniary rewards, as a response to others' actions. Our results show no difference in behavior between the two treatments. We also find evidence of the stability of subjects' preferences with respect to their behavior over time and to the consistency of their choices as first and second mover.     

Evolutionary Analyses of Tacit Communication in Van Huyck, Battalio, and Beil's Game Experiments

This paper provides evolutionary interpretations of Van Huyck, Battalio, and Beil's experimental results on coordination game with auction. A set-valued solution concept is defined for a finite population model under a best response evolutionary dynamic and applied to their games. It is shown that our solution concept captures the role of auction as a tacit communication device and predicts the equilibria chosen by players in the real experiments. We also discuss the possibility of constructing a more realistic evolutionary learning model to explain the experimental results.Journal of Economic LiteratureClassification Numbers: C72, C92.     

The Rate of Change in Evolutionary Systems and Evolutionary Economic Modeling

Evolutionary economics seeks to model socio-economic reality as an evolutionary system. This powerful approach entails the implication of the continuous loss of information through the evolutionary process. The implication corresponds to evolutionary biology, although the systems in evolutionary economics are different from those in evolutionary biology. The issue of the loss of information has not been extensively studied in economics. Many open questions remain: Which knowledge is lost under what circumstances? Can loss of information be harmful to the socio-economic system as a whole in the presence of runaway dynamics caused by, for example, network externalities? How can the development of knowledge in economic systems be studied? The present article examines these questions and more.     

Common Pool Games are Convex Games

For the class of cooperative common pool games the paper focuses on the question of how, during the preplay negotiation process, the ability of coalitions to enforce their claims imposes externalities on the opposition by having an impact on the jointly produced resource. One of our main results is that common pool games are clear games. Based on this result we are able to derive sufficient conditions for the convexity of the characteristic function, which establishes the second main result in the paper, namely that cooperative common pool games are characterized by increasing returns with respect to the coalition size.     

博弈论的新发展:行为博弈论

标准博弈论在经济理性假设下分析博弈参与者如何在追求各自最优目标的同时实现均衡。但是,由于现实行为人是有限理性的,标准博弈论对实践的解释和指导受到限制。为了延伸博弈论对现实活动的解释,行为博弈论将实验经济学与标准博弈论相融合,在博弈实验的基础上,考察和解释标准理论推断与实验结果之间的差异,引入行为因素改进标准博弈论的基本假定,重构博弈分析模型,以求达到准确解读有限理性的行为人在现实约束中如何行动的目的。     

Games of Status

A status game is a cooperative game in which the outcomes are rank orderings of the players. They are a good model for certain situations in which players care about how their "status" compares with that of other players.
We present several formal models within this class. Included are authoritarian status games (where coalitions may assign positions in the rank ordering to nonmembers) and oligarchic status games (where they are unableto do so). We consider the issues of a value concept for authoritarian games and that of core existence for oligarchic games. We then add a transferable resource to the models, obtaining "games of wealth and status."
Finally, we consider an interesting variant, called a "secession game," where coalitions have the right to secede from the grand coalition and form their own smaller "subsocieties," each with its own hierarchy.     

Action-Graph Games

Representing and reasoning with games becomes difficult once they involve large numbers of actions and players, because the space requirement for utility functions can grow unmanageably. Action-Graph Games (AGGs) are a fully-expressive game representation that can compactly express utility functions with structure such as context-specific independence, anonymity, and additivity. We show that AGGs can be used to compactly represent all games that are compact when represented as graphical games, symmetric games, anonymous games, congestion games, and polymatrix games, as well as games that require exponential space under all of these existing representations. We give a polynomial-time algorithm for computing a player's expected utility under an arbitrary mixed-strategy profile, and show how to use this algorithm to achieve exponential speedups of existing methods for computing sample Nash equilibria. We present results of experiments showing that using AGGs leads to a dramatic increase in the size of games accessible to computational analysis.²