The strategic behavior of rational novices

There is a growing amount of experimental evidence that suggests people often deviate from the predictions of game theory. Some scholars attempt to explain the observations by introducing errors into behavioral models. However, most of these modifications are situation dependent and do not generalize. A new theory, called the rational novice model, is introduced as an attempt to provide a general theory that takes account of erroneous behavior. The rational novice model is based on two central principals. The first is that people systematically make inaccurate guesses when they are evaluating their options in a game-like situation. The second is that people treat their decisions similar to a portfolio problem. As a result, non optimal actions in a game theoretic sense may be included in the rational novice strategy profile with positive weights.

The rational novice model can be divided into two parts: the behavioral model and the equilibrium concept. In a theoretical chapter, the mathematics of the behavioral model and the equilibrium concept are introduced. The existence of the equilibrium is established. In addition, the Nash equilibrium is shown to be a special case of the rational novice equilibrium. In another chapter, the rational novice model is applied to a voluntary contribution game. Numerical methods were used to obtain the solution. The model is estimated with data obtained from the Palfrey and Prisbrey experimental study of the voluntary contribution game. It is found that the rational novice model explains the data better than the Nash model. Although a formal statistical test was not used, pseudo R^2 analysis indicates that the rational novice model is better than a Probit model similar to the one used in the Palfrey and Prisbrey study.

The rational novice model is also applied to a first price sealed bid auction. Again, computing techniques were used to obtain a numerical solution. The data obtained from the Chen and Plott study were used to estimate the model. The rational novice model outperforms the CRRAM, the primary Nash model studied in the Chen and Plott study. However, the rational novice model is not the best amongst all models. A sophisticated rule-of-thumb, called the SOPAM, offers the best explanation of the data.

Essays on cooperation and reciprocity

This dissertation comprises three essays that use theory-based experiments to gain understanding of how cooperation and efficiency is affected by certain variables and institutions in different types of strategic interactions prevalent in our society.

Chapter 2 analyzes indefinite horizon two-person dynamic favor exchange games with private information in the laboratory. Using a novel experimental design to implement a dynamic game with a stochastic jump signal process, this study provides insights into a relation where cooperation is without immediate reciprocity. The primary finding is that favor provision under these conditions is considerably less than under the most efficient equilibrium. Also, individuals do not engage in exact score-keeping of net favors, rather, the time since the last favor was provided affects decisions to stop or restart providing favors.

Evidence from experiments in Cournot duopolies is presented in Chapter 3 where players indulge in a form of pre-play communication, termed as revision phase, before playing the one-shot game. During this revision phase individuals announce their tentative quantities, which are publicly observed, and revisions are costless. The payoffs are determined only by the quantities selected at the end under real time revision, whereas in a Poisson revision game, opportunities to revise arrive according to a synchronous Poisson process and the tentative quantity corresponding to the last revision opportunity is implemented. Contrasting results emerge. While real time revision of quantities results in choices that are more competitive than the static Cournot-Nash, significantly lower quantities are implemented in the Poisson revision games. This shows that partial cooperation can be sustained even when individuals interact only once.

Chapter 4 investigates the effect of varying the message space in a public good game with pre-play communication where player endowments are private information. We find that neither binary communication nor a larger finite numerical message space results in any efficiency gain relative to the situation without any form of communication. Payoffs and public good provision are higher only when participants are provided with a discussion period through unrestricted text chat.

An examination of strategic opportunities provided by the conference committee procedure in the U.S. Congress

Deference to committees in Congress has been a much studied phenomena for close to 100 years. This deference can be characterized as the unwillingness of a potentially winning coalition on the House floor to impose its will on a small minority, a standing committee. The congressional scholar is then faced with two problems: observing such deference to committees, and explaining it. Shepsle and Weingast have proposed the existence of an ex-post veto for standing committees as an explanation of committee deference. They claim that as conference reports in the House and Senate are considered under a rule that does not allow amendments, the conferees enjoy agenda-setting power. In this paper I describe a test of such a hypothesis (along with competing hypotheses regarding the effects of the conference procedure). A random-utility model is utilized to estimate legislators' ideal points on appropriations bills from 1973 through 1980. I prove two things: 1) that committee deference can not be said to be a result of the conference procedure; and moreover 2) that committee deference does not appear to exist at all.

Future of earthquake early warning : quantifying uncertainty and making fast automated decisions for applications

Earthquake early warning (EEW) systems have been rapidly developing over the past decade. Japan Meteorological Agency (JMA) has an EEW system that was operating during the 2011 M9 Tohoku earthquake in Japan, and this increased the awareness of EEW systems around the world. While longer-time earthquake prediction still faces many challenges to be practical, the availability of shorter-time EEW opens up a new door for earthquake loss mitigation. After an earthquake fault begins rupturing, an EEW system utilizes the first few seconds of recorded seismic waveform data to quickly predict the hypocenter location, magnitude, origin time and the expected shaking intensity level around the region. This early warning information is broadcast to different sites before the strong shaking arrives. The warning lead time of such a system is short, typically a few seconds to a minute or so, and the information is uncertain. These factors limit human intervention to activate mitigation actions and this must be addressed for engineering applications of EEW. This study applies a Bayesian probabilistic approach along with machine learning techniques and decision theories from economics to improve different aspects of EEW operation, including extending it to engineering applications.

Existing EEW systems are often based on a deterministic approach. Often, they assume that only a single event occurs within a short period of time, which led to many false alarms after the Tohoku earthquake in Japan. This study develops a probability-based EEW algorithm based on an existing deterministic model to extend the EEW system to the case of concurrent events, which are often observed during the aftershock sequence after a large earthquake.

To overcome the challenge of uncertain information and short lead time of EEW, this study also develops an earthquake probability-based automated decision-making (ePAD) framework to make robust decision for EEW mitigation applications. A cost-benefit model that can capture the uncertainties in EEW information and the decision process is used. This approach is called the Performance-Based Earthquake Early Warning, which is based on the PEER Performance-Based Earthquake Engineering method. Use of surrogate models is suggested to improve computational efficiency. Also, new models are proposed to add the influence of lead time into the cost-benefit analysis. For example, a value of information model is used to quantify the potential value of delaying the activation of a mitigation action for a possible reduction of the uncertainty of EEW information in the next update. Two practical examples, evacuation alert and elevator control, are studied to illustrate the ePAD framework. Potential advanced EEW applications, such as the case of multiple-action decisions and the synergy of EEW and structural health monitoring systems, are also discussed.

How resources control aggression in Drosophila

How animals use sensory information to weigh the risks vs. benefits of behavioral decisions remains poorly understood. Inter-male aggression is triggered when animals perceive both the presence of an appetitive resource, such as food or females, and of competing conspecific males. How such signals are detected and integrated to control the decision to fight is not clear. Here we use the vinegar fly, Drosophila melanogaster, to investigate the manner in which food and females promotes aggression.

In the first chapter, we explore how food controls aggression. As in many other species, food promotes aggression in flies, but it is not clear whether food increases aggression per se, or whether aggression is a secondary consequence of increased social interactions caused by aggregation of flies on food. Furthermore, nothing is known about how animals evaluate the quality and quantity of food in the context of competition. We show that food promotes aggression independently of any effect to increase the frequency of contact between males. Food increases aggression but not courtship between males, suggesting that the effect of food on aggression is specific. Next, we show that flies tune the level of aggression according to absolute amount of food rather than other parameters, such as area or concentration of food. Sucrose, a sugar molecule present in many fruits, is sufficient to promote aggression, and detection of sugar via gustatory receptor neurons is necessary for food-promoted aggression. Furthermore, we show that while food is necessary for aggression, too much food decreases aggression. Finally, we show that flies exhibit strategies consistent with a territorial strategy. These data suggest that flies use sweet-sensing gustatory information to guide their decision to fight over a limited quantity of a food resource.

Following up on the findings of the first chapter, we asked how the presence of a conspecific female resource promotes male-male aggression. In the absence of food, group-housed male flies, who normally do not fight even in the presence of food, fight in the presence of females. Unlike food, the presence of females strongly influences proximity between flies. Nevertheless, as group-housed flies do not fight even when they are in small chambers, it is unlikely that the presence of female indirectly increases aggression by first increasing proximity. Unlike food, the presence of females also leads to large increases in locomotion and in male-female courtship behaviors, suggesting that females may influence aggression as well as general arousal. Female cuticular hydrocarbons are required for this effect, as females that do not produce CH pheromones are unable to promote male-male aggression. In particular, 7,11-HD––a female-specific cuticular hydrocarbon pheromone critical for male-female courtship––is sufficient to mediate this effect when it is perfumed onto pheromone-deficient females or males. Recent studies showed that ppk23⁺ GRNs label two population of GRNs, one of which detects male cuticular hydrocarbons and another labeled by ppk23 and ppk25, which detects female cuticular hydrocarbons. I show that in particular, both of these GRNs control aggression, presumably via detection of female or male pheromones. To further investigate the ways in which these two classes of GRNs control aggression, I developed new genetic tools to independently test the male- and female-sensing GRNs. I show that ppk25-LexA and ppk25-GAL80 faithfully recapitulate the expression pattern of ppk25-GAL4 and label a subset of ppk23⁺ GRNs. These tools can be used in future studies to dissect the respective functions of male-sensing and female-sensing GRNs in male social behaviors.

Finally, in the last chapter, I discuss quantitative approaches to describe how varying quantities of food and females could control the level of aggression. Flies show an inverse-U shaped aggressive response to varying quantities of food and a flat aggressive response to varying quantities of females. I show how two simple game theoretic models, “prisoner’s dilemma” and “coordination game” could be used to describe the level of aggression we observe. These results suggest that flies may use strategic decision-making, using simple comparisons of costs and benefits.

In conclusion, male-male aggression in Drosophila is controlled by simple gustatory cues from food and females, which are detected by gustatory receptor neurons. Different quantities of resource cues lead to different levels of aggression, and flies show putative territorial behavior, suggesting that fly aggression is a highly strategic adaptive behavior. How these resource cues are integrated with male pheromone cues and give rise to this complex behavior is an interesting subject, which should keep researchers busy in the coming years.