Communication and coordination in the laboratory collective resistance game

This paper presents a laboratory collective resistance (CR) game to study how different forms of non-binding communication among responders can help coordinate their collective resistance against a leader who transgresses against them. Contrary to the predictions of analysis based on purely self-regarding preferences, we find that non-binding communication about intended resistance increases the incidence of no transgression even in the one-shot laboratory CR game. In particular, we find that the incidence of no transgression increases from 7 percent with no communication up to 25–37 percent depending on whether communication occurs before or after the leader’s transgression decision. Responders’ messages are different when the leaders can observe them, and the leaders use the observed messages to target specific responders for transgression.

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Electronic Supplementary Material The online version of this article () contains supplementary material, which is available to authorized users.      

Group polarization in the team dictator game reconsidered

While most papers on team decision-making find that teams behave more selfishly, less trustingly and less altruistically than individuals, Cason and Mui (1997) report that teams are more altruistic than individuals in a dictator game. Using a within-subjects design we re-examine group polarization by letting subjects make individual as well as team decisions in an experimental dictator game. In our experiment teams are more selfish than individuals, and the most selfish team member has the strongest influence on team decisions. Various explanations for the different findings in Cason and Mui (1997) and in our paper are discussed.      

Upstream-downstream transactions and watershed externalities: Experimental evidence from Kenya

Where environmental policies or projects seek behavioral change, understanding underlying norms and preferences is essential to securing environmental outcomes. This study models a payment for environmental services intervention in an experimental field laboratory in Nyanza Province, Kenya. Upstream and downstream individuals are paired in a standard investment game, in which the upstream mover's investment represents land use decisions and the downstream mover responds with a choice of compensation payment. The experimental intervention introduces an enforcement treatment on the downstream movers' compensation decisions for a single round. Underlying social preferences and identity appear to shape individual transactions between upstream and downstream individuals. Upstream first movers are sensitive to the removal of the enforcement on their downstream partners in the second round, and make decisions consistent with crowding out of social preferences. The results suggest that environmental interventions may affect resource decisions for individuals who are not themselves direct targets of enforcement.     

Cooperation in the commons

This paper delineates circumstances in which a first-best cooperative solution can be supported as a subgame perfect equilibrium in a dynamic common property renewable resource game. In a game with nonlinear resource stock effects on cost, we characterize a worst perfect equilibrium that supports cooperation for the widest range of parameter values for the discount rate, resource growth rate, harvest price, and the number of resource exploiters. The strategy profile that we propose is consistent with human behavior observed in experiments and common property resource case studies.We thank seminar participants at the University of Minnesota, the Heartland Environmental and Resource Economics Conference at Iowa State University, Keio University, and two anonymous referees for helpful comments.     

Competition and coordination in experimental minority games

This work presents experimental results on a coordination game in which agents must repeatedly choose between two sides, and a positive fixed payoff is assigned only to agents who pick the minoritarian side. We conduct laboratory experiments in which stationary groups of five players play the game for 100 periods, and manipulate two treatment variables: the amount of information about other players’ past choices and the salience of information regarding the game history (i.e., the length of the string of past outcomes that players can see on the screen while choosing). Our main findings can be summarized as follows: aggregate efficiency in the game is in most cases significantly higher than the level corresponding to the symmetric mixed strategy Nash equilibrium. In addition, providing players with information about individual choices in the group does not improve aggregate efficiency with respect to when such information is absent. Displaying information about more rounds than just the previous one, on the other hand, seems to have a positive effect on aggregate efficiency. At the individual level, we find a stronger statistical relation between players’ current choices and their own past choices than between players’ choices and previous aggregate outcomes. In addition, the depth of the relation between present and past choices seems to be affected by the prompt availability of information about the game history. Finally, we detect evidence of a mutual co-adaptation between players’ choices over time that is partly responsible for the high level of efficiency observed.      

An elasticity approach to equilibrium and preference concentration in the Hotelling game

We consider the standard Hotelling price-and-location game with two firms, and show how equilibrium is affected by the shape of the consumers’ density. By describing the latter in terms of elasticity (Esteban in Int Econ Rev 27:439–444, 1986), we develop a framework which enables us to prove a sufficient condition for the existence of multiple asymmetric equilibria when the density is symmetric, in terms of a lower bound on the Gini coefficient of the distribution of preferences.      

Stochastic strategy adjustment in coordination games

Summary. The paper explores a model of equilibrium selection in coordination games, where agents from an infinite population stochastically adjust their strategies to changes in their local environment. Instead of playing perturbed best-response, it is assumed that agents follow a rule of ‘switching to better strategies with higher probability’. This behavioral rule is related to bounded-rationality models of Rosenthal (1989) and Schlag (1998). Moreover, agents stay with their strategy in case they successfully coordinate with their local neighbors. Our main results show that both strict Nash equilibria of the coordination game correspond to invariant distributions of the process, hence evolution of play is not ergodic but instead depends on initial conditions. However, coordination on the risk-dominant equilibrium occurs with probability one whenever the initial fraction contains infinitely many agents, independent of the spatial distribution of these agents. Received: March 14, 2000; revised version: June 21, 2001     

Inequity aversion and trustees' reciprocity in the trust game

The introduction of inequity concerns into the Trust Game gives rise to complementary concepts of conditional trustworthiness and unconditional untrustworthiness. When the inequity concern is not accounted for, unconditional untrustworthiness is overestimated. The high proportion of trustees adopting the equal division behavioural norm suggests that an unequal distribution of show-up fees may deter trustors from placing trust, and may eventually reduce the incentive to cooperate for both players. It also follows that increases in income inequality can explain declines in self-reported trust in high-income countries.     

Social learning in coordination games: does status matter?

We report the results of experiments designed to test the impact of social status on learning in a coordination game. In the experiment, all subjects observe the play of an agent who either has high status or low status. In one treatment the agent is another player in the game; in the other the agent is a simulated player. Status is assigned within the experiment based on answers to a trivia quiz. The coordination game has two equilibria: one is payoff-dominant but risky, and the other is risk-dominant. The latter is most commonly chosen in experiments where there is no coordination device. We find that a commonly observed agent enhances coordination on the payoff-dominant equilibrium more often when the agent has high status.      

Ambiguity and perceived coordination in a global game

In a global game, larger ambiguity is shown to decrease the amount of coordination each player perceives. Consequently, small uncertainty tends to select the Pareto dominated equilibrium of the game without uncertainty. Implications for models of financial crises are drawn.     

Potential competition and coordination in a market-entry game

When there are too many potential competitors available to exploit a new market opportunity, the risk of multiple entry may discourage entry. This paper employs a contest to coordinate entry and compares the outcome with the mixed-strategy approach. Expected profit per firm decreases with potential competition and welfare eventually decreases with potential competition for many contest designs. The contest outcome is welfare superior to the mixed-strategy outcome when entry costs are high but the situation is reversed when entry costs are low. The contest model is consistent with certain empirical evidence on investment rivalry.     

Endogenous transfers in the Prisoner's Dilemma game: An experimental test of cooperation and coordination

We test a two-stage compensation mechanism for promoting cooperation in Prisoner's Dilemma games. Players first simultaneously choose binding non-negative amounts to pay their counterparts for cooperating, and then play the induced game knowing these amounts. In our games, all payment pairs consistent with mutual cooperation in subgame-perfect equilibrium transform these games into coordination games, with both mutual cooperation and mutual defection as Nash equilibria in the second stage. When endogenous transfer payments are not permitted, cooperation is much less likely. Mutual cooperation is most likely when the (sufficient) payments are identical, and it is also substantially more likely with payment pairs that bring the mutual-cooperation payoffs closer together. Both the Fehr–Schmidt and Charness–Rabin models predict that transfers that make final payoffs closer are preferred; however, they do not explain why equal transfers are particularly effective. Transfers are also effective in sustaining cooperation even when they are imposed and not chosen.     

Horizontal vs. vertical transmission of fertility preferences

I study the cultural transmission of fertility preferences among second-generation immigrant women observed in U.S. Censuses from 1910 to 1970. As hypothesized by Bisin and Verdier (2001), the transmission of preferences can be “vertical” or “horizontal”. Using a unique source documenting the variation in fertility behavior in Europe before and after the first demographic transition (1830–1970), I unpack the influence of parents (measured by source-country fertility at the time of departure from Europe) versus the influence of peers from the same source-country (measured by fertility of the same-age cohorts living in the source-country and transmitted by same-age recent immigrants). I find that the transmission mechanism is crucially affected by the number of foreign-born immigrant peers living in the same MSA. On one hand, the “vertical” channel of transmission is stronger in places where there are few newly arrived foreign-born immigrant couples from the same source-countries. On the other hand, the “horizontal” channel prevails in MSA’s densely populated by recently arrived immigrants from the same source-countries of second-generation ones.     

A naturalistic approach to the theory of the firm: The role of cooperation and cultural evolution

One reason why firms exist, this paper argues, is because they are suitable organizations within which cooperative production systems based on human social predispositions can evolve. In addition, we show how an entrepreneur, given these predispositions, can shape human behavior within a firm. To illustrate these processes, we will present a model that depicts how the biased transmission of cultural contents via social learning processes within the firm influence employees’ behavior and the performance of the firm. These biases can be traced back to evolved social predispositions. Humans lived in tribal scale social systems based on significant amounts of intra- and even intergroup cooperation for tens if not a few hundred thousand years before the first complex societies arose. Firms rest upon the social psychology originally evolved for tribal life. We also relate our conclusions to empirical evidence on the performance and size of different kinds of organizations. Modern organizations have functions rather different from ancient tribes, leading to friction between our social predispositions and organization goals. Firms that manage to reduce this friction will tend to function better.     

Voice matters in a dictator game

We conducted a laboratory experiment to study the effects of communication in a dictator game, while maintaining subjects’ anonymity. In the experiment, the recipient has an opportunity to state a payoff-irrelevant request for his/her share before the dictator dictates his/her offer. We found that the independence hypothesis that voice does not matter is rejected. In particular, if the request is for less than half of the pie, the dictator’s offer increases as the recipient’s request increases. Additionally, there is no dictator who is other-regarding and, at the same time, does not react to the recipient’s request.

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Electronic Supplementary Material  The online version of this article () contains supplementary material, which is available to authorized users.      

Non-Laplacian beliefs in a global game with noisy signaling

In standard global games, individual behavior is optimal if it constitutes a best response to agnostic—Laplacian—beliefs about the aggregate behavior of other agents. This paper considers a standard binary action global game augmented with noisy signaling by an informed policy-maker and shows that in this game, equilibrium beliefs depart in quite stark ways from the Laplacian benchmark. In the limit as signals become arbitrarily precise, so that all fundamental uncertainty is removed (leaving only strategic uncertainty), the equilibrium beliefs of the marginal individual concerning the aggregate action collapse to a discrete Bernoulli distribution, giving probability mass only to the polar extreme outcomes. By contrast in the underlying standard global game the marginal individual believes the aggregate action has a continuous uniform distribution, giving equal likelihood to all possible outcomes.     

Constitutional coordination in unstable party systems: the Brazilian constitution of 1988

Constitutional assemblies are a common feature of many democratic transitions. However, the goal of coordinating constitutional choice would seem nearly impossible when assemblies are comprised of highly fragmented and volatile political parties. Building on Knight’s bargaining model, this article argues that the main challenge to coordination in unstable party systems is the procedural disequilibrium that results from incomplete information over breakdown payoffs. The likelihood of compromise in such circumstances is a function of the ideologies that frame constitutional choice and inform coalition-building. Thus, unstable party systems are not chaotic, although they may be deeply conflict-laden. These issues are illustrated empirically via the Brazilian Constitution of 1988, which demonstrates the possibilities for a stable constitutional order emerging from a fragmented and volatile party system.

Cooperation by way of support in a rent seeking contest for a public good

This paper analyzes the efforts made to influence a decision that can have two outcomes. First, the agents on the same side designate an agent to play the contest for them. The inactive agents can then decide to support this active agent, i.e. pay a percentage of his effort. It is optimal to designate either the agent with the lowest stake (who will receive support from everyone else) or the agent with the highest stake (who will not receive support) as the active agent. We find that the side with the higher aggregate stake may have the lower success probability.     

When and why? A critical survey on coordination failure in the laboratory

Coordination games with Pareto-ranked equilibria have attracted major attention over the past two decades. Two early path-breaking sets of experimental studies were widely interpreted as suggesting that coordination failure is a common phenomenon in the laboratory. We identify the major determinants that seem to affect the incidence, and/or emergence, of coordination failure in the lab and review critically the existing experimental studies on coordination games with Pareto-ranked equilibria since that early evidence emerged. We conclude that there are many ways to engineer coordination successes.      

企业竞合行为的演化博弈分析--以我国创意产业为例

近年来,创意产业不仅成为学界关注的热点,也成为政府和企业专注与投资的特点。企业之间竞合行为将直接决定其竞争力,进而影响我国创意产业竞争力与发展方向。本文基于文化创意产业集群内企业间的竞合行为,运用演化博弈的理论方法,建立了核心企业之间的横向对称博弈及核心企业与其相邻下游企业之间的纵向非对称博弈的数理模型,分析了其演变的动态过程。研究结果表明,该系统的演化方向与双方博弈的支付矩阵相关,博弈结果受到合作收益、初始合作成本、独立创新能力、合作成功率、以及双方初始状态等因素的影响,最后给出了相关建议,为整合我国文化产业集群提供了理论依据。