Edgar Allan Poe's riddle: Framing effects in repeated matching pennies games

Framing effects have a significant influence on the finitely repeated matching pennies game. The combination of being labelled “a guesser,” and having the objective of matching the opponent's action, appears to be advantageous. We find that being a player who aims to match the opponent's action is advantageous irrespective of whether the player moves first or second. We examine alternative explanations for our results and relate them to Edgar Allan Poe's “The Purloined Letter.” We propose a behavioral model which generates the observed asymmetry in the players' performance.     

Managing innovation in a knowledge intensive technology organisation (KITO)

This study aims to add to the existing knowledge of how innovation works in organisations. By understanding how to assess/evaluate processes that support and enable innovation, managers can better manage innovation as a business process. This paper addresses elements of organisational behaviour that relate to people management where innovation and technology management is concerned. Perception plays a crucial role in driving behaviour and therefore the widely accepted business scorecard methodology has been used to measure innovation practices in the organisation. The research was done in a knowledge intensive technology organisation (KITO) in South Africa. Interviews with managers of R&D were conducted. These interviews were used to adapt an existing audit instrument to suit the technology–based organisation. Thereafter, a comprehensive audit of innovation was conducted at three different management levels using the adapted instrument. Over 100, mostly R&D managers, were asked to complete a scorecard–based questionnaire and to draw a visual representation (VR) of innovation. The results of the interviews, audit and VRs were used to produce a management framework that is not only applicable to a KITO, but can also be used widely to improve innovation through enhanced visual understanding of any technology–based organisation. The results of the study indicate that measuring innovation through a validated instrument is highly valuable. The Holistic System Framework for innovation and the measurement instrument facilitated (1) management of, and (2) organisational learning about innovation. The comprehensive audit indicated, on a strategic level, the strengths and weaknesses of the innovation process as practised in the organisation. The instrument is valuable at a strategic management level as it indicates where in the organisation the gaps exist regarding the management of the process of innovation with the aim to create a competitive advantage.     

Group decision-making in the shadow of disagreement

A model of group decision-making is studied, in which one of two alternatives must be chosen. While agents differ in their preferences over alternatives, everybody prefers agreement to disagreement. Our model is distinguished by three features: private information regarding valuations, differing intensities in preferences, and the option to declare neutrality to avoid disagreement. There is always an equilibrium in which the majority is more aggressive in pushing its alternative, thus enforcing their will via both numbers and voice. However, under general conditions an aggressive minority equilibrium inevitably makes an appearance, provided that the group is large enough. Such equilibria invariably display a “tyranny of the minority”: the increased aggression of the minority always outweighs their smaller number, leading to the minority outcome being implemented with larger probability than the majority alternative. We fully characterize the asymptotic behavior of this model as group size becomes large, and show that all equilibria must converge to one of three possible limit outcomes.     

Internet integration in business marketing tactics

Companies have got to learn to eat change for breakfast. Tom Peters

…it behooves us to adapt oneself to the times if one wants to enjoy continued good fortune. Niccolo Machiavelli

Business Marketing Management (BMM) over the Internet has been receiving a “lot of ink” in current periodicals and to a lesser degree in academic literature. Practice changes so rapidly that principles emerging from last month's successes may need revision before they are derived and printed. There is yet a general theory of business-to-business Internet integration. Nonetheless, there is a need to build such knowledge on “the fly,” and to attempt to see patterns even if they have a short life span. The present work takes a look at the state of business-to-business Internet marketing practices as the year 2000 came to a close for larger companies. Not surprisingly, and just like the hardware that make Internet distribution density so high, we find that the Internet is having an impact on: market size and structure, business buying and selling behavior, negotiation strategies and associated pricing practices. Moreover, distribution systems are experiencing a major realignment while logistics optimizing is even greater. The Web and e-mail are becoming more fully integrated into the business communication mix. The attempt here is to learn about the most rapidly emerging and changing communication technology of the past 100 years. Business-driven technology now appears to be driving business marketing tactics and results are augmented through multifaceted complex use of the Internet.     

Fault Tolerant Implementation

In this paper we investigate the implementation problem arising when some of the players are "faulty" in the sense that they fail to act optimally. The planner and the non-faulty players only know that there can be at most  k  faulty players in the population. However, they know neither the identity of the faulty players, their exact number nor how faulty players behave. We define a solution concept which requires a player to optimally respond to the non-faulty players regardless of the identity and actions of the faulty players. We introduce a notion of fault tolerant implementation, which unlike standard notions of full implementation, also requires robustness to deviations from the equilibrium. The main result of this paper establishes that under symmetric information any choice rule that satisfies two properties—  k  -monotonicity and no veto power—can be implemented by a strategic game form if there are at least three players and the number of faulty players is less than     . As an application of our result we present examples of simple mechanisms that implement the constrained Walrasian function and a choice rule for the efficient allocation of an indivisible good.     

A framework, process and tool for managing technology‐based assets

Technology organisations centre their business on the development of new technology‐based offerings (i.e. products and services). The strategic management of technology‐based assets is therefore crucial for these organisations as an imperative for business success. However, these assets are often intangible and reflect future rather than current value and are therefore difficult to manage when using traditional managerial concepts. This study investigates integrative mechanisms addressing the management of technology‐based assets and offerings in a technology organisation. The approach taken was to study the views and practices regarding the management of technology‐based assets in a number of strategic units of a technology organisation (CSIR, South Africa). The study maintains that the management of technology‐based assets and offerings requires clear strategic management of the process of technological innovation with special emphasis on the management of the intellectual capital (IC) and the intellectual property (IP) of the organisation. The study describes a framework linking the core processes supporting the management of technology‐based assets and offerings with other organisational elements such as leadership, strategy, and culture. Specific key links between the core process of innovation and the strategic management of investment in technology‐based assets using a portfolio approach are discussed.     

On the fairness of random procedures

We consider procedures that use randomness to make a decision that involves several individuals. We asked subjects to compare the fairness of six pairs of seemingly equivalent procedures. We propose a classification of subjects into two categories: those who are “emotional” in the sense that they exhibit a systematic ranking of procedures on the basis of intuitive notions of fairness, and those who are “consequentialists” in the sense that they systematically view each pair of procedures as being equally fair. According to this classification, about 30% of the subjects are emotional while 31% are consequentialists.     

Incentive-compatible advertising on nonretail platforms

Nonretail platforms enable users to engage in noncommercial activities, while generating user information that helps ad targeting. We present a model in which the platform chooses a personalized ad-display rule and an advertising fee (which depends on the targeted user group). The policy that maximizes the platform's advertising revenues creates an incentive for advertisers to strategize targeting. We provide a condition for incentive-compatibility of the first-best policy, and highlight the forces that make it harder to satisfy. We apply our result to examples of platforms. Our analysis of social networks turns out to be related to the “community-detection” problem.     

Choosing the two finalists

This paper studies a decision maker who for each choice set selects a subset of (at most) two alternatives. We axiomatize three types of procedures: (i) The top two: the decision maker has in mind an ordering and chooses the two maximal alternatives. (ii) The two extremes: the decision maker has in mind an ordering and chooses the maximal and the minimal alternatives. (iii) The top and the top: the decision maker has in mind two orderings and he chooses the maximal element from each.