A social procedural approach to the Pareto optimization problematique: Part II. Institutionalized procedures and their limitations

In the previous article (Part I) we briefly introduced the Pareto problematique, selective criticism of it, and Generalized Game Theory’s (GGT) approach to the Pareto optimization problematique. GGT stresses the embeddedness and multilevel character of social games; its application to optimization problems leads to a conceptualization of two-phase societal procedures to achieve agreements for change—or, conversely, maintaining—states of the world. In this part two general types of games are distinguished analytically in the 2-phase process: on the one hand, elementary strategic games take place among agents in the first phase in diverse social settings, and, on the other hand, regulative conflict resolution or collective improvement games are organized as procedures in the second phase. Many elementary strategic games end in stalemates, difficult-to-resolve conflicts, and non-optimal outcomes such as occur in collective action or prisoner dilemma type games. This type of situation is the point of departure for the activation of a meta-game regulatory procedure for resolving stalemates, conflicts, and non-optimal states in order to accomplish societal improvements and efficiencies. In a word, the paper identifies and models institutionalized regulatory mechanisms that resolve conflicts, inefficient or non-optimal states, and disequilibria; and lead thereby to solution or resolution of Pareto optimization problems in the face of general non-unanimity or conflict about the outcomes. In addition, the article present more detailed models of the adjudication, negotiation, and democratic procedures introduced in the previous article and discusses their legitimacy bases, the limits of such societal procedures, and the accomplishment of societal efficiencies through the procedures.     

The Theory of Socially Embedded Games: Applications and Extensions to Open and Closed Games

An earlier article, drawing on the mathematical theory of rules and rule complexes, extends and generalizes game theory (GGT). The theory has been used to conceptualize and analyze diverse social relationships, roles, and games as particular types of rule complexes.For instance, a social role, as a major basis of a parent's action in a game, consists of at least four key components – which are mathematical objects – in the determination of action: value complex, model of reality (including beliefs and knowledge bases), a repertoire of acts, routines, programs, and strategies, and modality, a role-specific algorithm for determining or generating action in game settings. This article applies and extends GGT in analyses of a market bargaining game (a type of open game) and of the classical game of prisoners' dilemma (a type of closed game). The applications show the concrete effects of social embeddedness on game structuring, game interaction patterns and outcomes, and social equilibria.     

Strategic behavior in non-atomic games

In order to remedy the possible loss of strategic interaction in non-atomic games with a societal choice, this study proposes a refinement of Nash equilibrium, strategic equilibrium. Given a non-atomic game, its perturbed game is one in which every player believes that he alone has a small, but positive, impact on the societal choice; and a distribution is a strategic equilibrium if it is a limit point of a sequence of Nash equilibrium distributions of games in which each player’s belief about his impact on the societal choice goes to zero. After proving the existence of strategic equilibria, we show that all of them must be Nash. We also show that all regular equilibria of smooth non-atomic games are strategic. Moreover, it is displayed that in many economic applications, the set of strategic equilibria coincides with that of Nash equilibria of large finite games.     

Efficient equilibria in a differential game of capitalism

One considers a differential game of capitalism ‘à la Lancaster’. Feedback Nash equilibria and Pareto optimal solutions are characterized under the assumption that the planning horizon is infinite. It is then shown that, by combining a Pareto optimal solution with the Nash feedback equilibrium strategy pair, which plays the role of a threat, one can obtain an efficient equilibrium which is also subgame perfect in the sense of Selten. This result modifies sensibly the previous interpretation of the inherent inefficiency of capitalism.     

Endogenous codetermination

This research introduces endogenous codetermination in a Cournot duopoly. Unlike the received literature (Kraft, 1998), this work assumes that firms bargain with their own union bargaining units under codetermination if and only if they can choose an ad hoc bargaining effort by maximising profits (three-stage non-cooperative game). There are remarkable differences compared with the main findings of the exogenous codetermination literature. Indeed, there may exist asymmetric multiple (Pareto efficient) Nash equilibria in pure strategies. Mandatory codetermination, therefore, is Pareto worsening. Each firm can then use the union bargaining power as a strategic device in a Cournot setting.     

Ethnic homophily perceptions as an emergent IHRM challenge: evidence from firms operating in Sri Lanka during the ethnic conflict

Ethnic conflict is a defining characteristic of the post-Cold War era and is prevalent particularly in emerging economies, areas of increasing interest to multinational enterprises. Yet little is known about the international human resource management challenges arising from such societal context. Utilizing social identity theory, we propose that ethnic homophily perceptions in the workplace – an employee's assessment that colleagues prefer working with ethnically similar others – is a reflection of the societal context and can be detrimental to the organization if not managed appropriately. We investigate whether contact theory offers insights to manage such perceptions. Drawing on a sample of 550 managers in Sri Lanka during a period of protracted ethnic conflict, we found that employee sensitivity to ethnic conflict in the societal context is positively related to ethnic homophily perceptions in the workplace, and that both ethnic diversity in workgroups and quality of work relationships serve to reduce perceptions of ethnic homophily.     

The impact of culture on national prevalence rates of social and commercial entrepreneurship

This cross-cultural study empirically investigates the cultural determinants of macro-level social and commercial entrepreneurship from a new institutional theory perspective. This study investigates if cultural shifts in cultural values, operationalized through the World Values Survey (WVS), impact the prevalence rates of social and commercial entrepreneurship at the national level. Social and commercial entrepreneurship rates are drawn from the 2009 Global Entrepreneurship Monitor (GEM) and aggregated for 53 countries in this cross-sectional analysis using multivariate regression. Findings indicate that traditional societal values positively impact commercial entrepreneurship prevalence rates, but negatively impact social entrepreneurship rates. Furthermore, self-expression societal values positively impact social entrepreneurship prevalence rates.     

Entrepreneurial action and the Euro-American social science tradition: pragmatism,realism and looking beyond ‘the entrepreneur’

Entrepreneurship studies are dominated by the disciplines of economics and psychology and work within a limiting methodological frame of reference; a ‘scientistic’ and individualistic framework that dominates the US-led mainstream of research. To achieve a more balanced scholarship, it is helpful to look at an alternative style of research and analysis which has deep and intertwined European and American roots. This looks to other social sciences such as sociology, as well as to history and the philosophy of science. Its adoption would encourage to shift the focus away from ‘entrepreneurs’ and onto the much broader phenomenon of entrepreneurial action or ‘entrepreneuring’ in its societal and institutional contexts. Such a shift would open up a greatly expanded range of research questions and enable a better balance to be achieved between attention to individual entrepreneurial actors and their organizational, societal and institutional contexts. A pragmatist and realist frame of reference, which recognizes both the importance of processes of social construction and the existence of a ‘real world’, has considerable potential to enrich and expand the scope of entrepreneurship scholarship.     

Societal institutions and HRM practices: an analysis of four European multinational subsidiaries in Bangladesh

Using the ‘societal-effect’ approach, a variant of the institutional theory developed and tested in Europe, this study investigates the impact of societal institutions on human resource management (HRM) practices of European multinational subsidiaries in Bangladesh, which is now on the list of the Next-11 economies of the world. In-depth case studies of four European multinational subsidiaries revealed the presence of different degrees of influence – partly attributable to societal effect – on the human resource practices of these subsidiaries. Our study added a new dimension to the interface between the strong and weak institutions and how such interfacing accords both legitimacy and reverse legitimacy to MNC subsidiaries and their societal institutions respectively. Another interesting finding of the study is the emergence of political system as a societal institution and, hence, a determinant of HRM practices in these subsidiaries. The study's implications are given.     

金融监管的博弈分析

文章将监管辨证理论和资本监管理论结合起来,运用动态博弈模型研究中国金融监管制度,提出有效规范、化解金融风险的若干建议。     

Nonprofit organizations,institutional economics,and systems thinking

The present paper applies the logic of John Kenneth Gailbraith's institutional economics analysis of corporate power to inquiring into the societal role of the nonprofit sector. Building on Galbraith's insight that corporations cause subtle but pervasive societal imbalances, the paper locates the role of nonprofit organizations in compensating for these imbalances, thus showing corporations and nonprofit organizations to be mutually complementary rather than antagonistic actors. This argument is supported by Niklas Luhmann's vision of the precarious relationship between the complexity and sustainability of social systems as well as by Kenneth Boulding's analysis of the farmer and labor movement. Luhmann's and Boulding's perspectives show profit-seeking corporations to be social systems developing high technological complexity at the cost of sacrificing their societal sustainability, while the improvement of the latter constitutes the rationale of many nonprofit organizations. The same systems-theoretic logic suggests, however, that nonprofit organizations may tend to underestimate the technological complexity of implementing their mission-related activities, thereby undermining their own effectiveness.     

Neoliberalization,Housing Institutions and Variegated Gentrification: How the ‘Third Wave’ Broke in Amsterdam

Neil Smith argues that in the last two decades gentrification has become a generalized global urban phenomenon. His theory is at a high level of abstraction, as it links urban gentrification to globalization, financial capitalism and neoliberalization. With these global processes, all cities have experienced ‘third wave’ gentrification. The theory, however, leaves little room for variegations of gentrification, apart from characterizing geographical differences as idiosyncrasies or as minor variations. This downplays the role of intervening mechanisms that impinge upon the pursuit and social outcomes of gentrification. This article aims to amend abstract theory by looking at Amsterdam from a historical institutional perspective. In Amsterdam, gentrification was particularly made possible by a process of neoliberalization within the housing system. However, as institutional change is incremental and based on layering and conversion, many older institutional arrangements remain in place. These arrangements tend to slow gentrification and assuage social consequences. Nevertheless, neoliberal modifications to the housing system have been accelerating the pursuit of gentrification. Current policies will very likely lead to exclusionary displacement.     

Bargaining through Approval

The paper considers two-person bargaining under Approval Voting. It first proves the existence of pure strategy equilibria. Then it shows that this bargaining method ensures that both players obtain at least their mean utility level in equilibrium. Finally it proves that, provided that the players are partially honest, the mechanism triggers sincerity and ensures that no alternative Pareto dominates the outcome of the game.     

Hierarchic competitive equilibria

Without an interiority or strong survival assumption, an equilibrium may not exist in the standard Arrow–Debreu model. We propose a generalized concept of competitive equilibrium, called hierarchic equilibrium. Instead of using standard prices we use hierarchic prices. Existence will be shown without a strong survival assumption and without a non-satiation condition on the preferences. Under standard assumptions this reduces to the Walras equilibrium. Hierarchic equilibria are weakly Pareto optimal and any Pareto optimum can be decentralized without a border condition. We prove the existence of a Pareto optimal hierarchic equilibrium under additional assumptions. Later, we establish a core equivalence result.     

Convergence in games with continua of equilibria

In game theory, the question of convergence of dynamical systems to the set of Nash equilibria has often been tackled. When the game admits a continuum of Nash equilibria, however, a natural and challenging question is whether convergence to the set of Nash equilibria implies convergence to a Nash equilibrium. In this paper we introduce a technique developed in Bhat and Bernstein (2003) as a useful way to answer this question. We illustrate it with the best-response dynamics in the local public good game played on a network, where continua of Nash equilibria often appear.     

Models for conflict resolution in ecosystem management

Tools developed in the fields of decision analysis and game theory that have potential for use in public sector conflict resolution are reviewed. The strengths and weaknesses, as well as the axioms defining principles of fairness, are examined for multiobjective optimization, Nash and Nash–Harsanyi solutions, voting models, and the Shapley value. The case of conflict between stakeholders over proposed oil and gas leasing on National Forest System lands is presented as a sample application. We conclude that the Shapley value is the appropriate approach for determining the “fairness” of alternative conflict solutions, at least in those situations where cardinal utilities can be estimated.     

An indifference trap of voting

In this paper strategic situations of voting and abstentions are analysed in a three-candidate voting model where voters are indifferent to various alternatives and candidates are interested in winning the election and seeing their most preferred alternative being realized. A specific decision problem is analysed, described by an Indifference Trap Game, with respect to, e.g., the corresponding Nash equilibria, perfect equilibria, and maximin solution. A second-best outcome is contained in the choice set of all three solutions while the Nash equilibrium concept is compatible with the Pareto efficient outcomes of the game.An alternative scenario where candidates suffer from incumbency but voters still are indifferent to some alternatives also supports the second-best outcome. Again, various solutions concepts are applied. We conclude that indifferent voters imply an eminent coordination problem for the candidates in the given voting game which, in general, ends up in inefficient outcomes. The inherent complexity of the decision situation cannot be sufficiently reduced to single out one and only one outcome.     

基于不完全信息动态博弈模型的报价策略研究

目前应用博弈论对价格谈判所进行的研究大多集中于讨价还价问题,而关于报价问题的研究往往依靠定性分析。因此本文建立了一个关于报价策略的三阶段不完全信息动态博弈模型,并通过求解证明：在谈判双方信息对称的条件下,无论对买方还是卖方来说,“抢先报价”都是占优策略。在买卖双方都采取“抢先报价”策略时,报价顺序博弈的结果具有不确定性。在现实中买卖双方往往会通过各种其他手段来达到抢先报价的目的。     

Unearthing antecedents to financial inclusion through FinTech innovations

Fintech innovations are enabling access to financial services through mobile devices for many unbanked in the world. Though fintech innovations are touted as game changers in deepening financial inclusion, their wide acceptance and use still remain limited. In the extant literature, technological and behavioural antecedents that influence users’ behaviour toward financial technologies are not fully understood. This study argues that understanding antecedents to the actual use of fintech innovations will lead to deepening financial inclusion. Using mobile money—a type of fintech innovation, this study adopts the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) and the Prospect theory. Drawing on survey data collected from 294 respondents, this study applies the partial least square structural equation modelling technique. The findings show that performance and effort expectancy have significant relationship with the intention to use mobile money services. However, contrary to well-established positions, price value, hedonic motivation, social influence and perceived risk do not influence intention and use of mobile money services. The study makes significant theoretical contributions and offers practical and policy implications for deepening financial inclusion.