Interactive Epistemology and Reasoning: On the Foundations of Game Theory

Game theory describes and analyzes strategic interaction. It is usually distinguished between static games, which are strategic situations in which the players choose only once as well as simultaneously, and dynamic games, which are strategic situations involving sequential choices. In addition, dynamic games can be further classified according to perfect and imperfect information. Indeed, a dynamic game is said to exhibit perfect information, whenever at any point of the game every player has full informational access to all choices that have been conducted so far. However, in the case of imperfect information some players are not fully informed about some choices. Game-theoretic analysis proceeds in two steps. Firstly, games are modelled by so-called form structures which extract and formalize the significant parts of the underlying strategic interaction. The basic and most commonly used models of games are the normal form, which rather sparsely describes a game merely in terms of the players' strategy sets and utilities, and the extensive form, which models a game in a more detailed way as a tree. In fact, it is standard to formalize static games with the normal form and dynamic games with the extensive form. Secondly, solution concepts are developed to solve models of games in the sense of identifying the choices that should be taken by rational players. Indeed, the ultimate objective of the classical approach to game theory, which is of normative character, is the development of a solution concept that is capable of identifying a unique choice for every player in an arbitrary game. However, given the large variety of games, it is not at all certain whether it is possible to device a solution concept with such universal capability. Alternatively, interactive epistemology provides an epistemic approach to game theory of descriptive character. This rather recent discipline analyzes the relation between knowledge, belief and choice of game-playing agents in an epistemic framework. The description of the players' choices in a given game relative to various epistemic assumptions constitutes the fundamental problem addressed by an epistemic approach to game theory. In a general sense, the objective of interactive epistemology consists in characterizing existing game-theoretic solution concepts in terms of epistemic assumptions as well as in proposing novel solution concepts by studying the game-theoretic implications of refined or new epistemic hypotheses. Intuitively, an epistemic model of a game can be interpreted as representing the reasoning of the players. Indeed, before making a decision in a game, the players reason about the game and their respective opponents, given their knowledge and beliefs. Precisely these epistemic mental states on which players base their decisions are explicitly expressible in an epistemic framework. In this PhD thesis, we consider an epistemic approach to game theory from a foundational point of view. In Chapter 1, basic game-theoretic notions as well as Aumann's epistemic framework for games are expounded and illustrated. Also, Aumann's sufficient conditions for backward induction are presented and his conceptual views discussed. In Chapter 2, Aumann's interactive epistemology is conceptually analyzed. In Chapter 3, which is based on joint work with Conrad Heilmann, a three-stage account for dynamic games is introduced and a type-based epistemic model is extended with a notion of agent connectedness. Then, sufficient conditions for backward induction are derived. In Chapter 4, which is based on joint work with Jérémie Cabessa, a topological approach to interactive epistemology is initiated. In particular, the epistemic-topological operator limit knowledge is defined and some implications for games considered. In Chapter 5, which is based on joint work with Jérémie Cabessa and Andrés Perea, Aumann's impossibility theorem on agreeing to disagree is revisited and weakened in the sense that possible contexts are provided in which agents can indeed agree to disagree.

Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

GWAS of human bitter taste perception identifies new loci and reveals additional complexity of bitter taste genetics.

Human perception of bitterness displays pronounced interindividual variation. This phenotypic variation is mirrored by equally pronounced genetic variation in the family of bitter taste receptor genes. To better understand the effects of common genetic variations on human bitter taste perception, we conducted a genome-wide association study on a discovery panel of 504 subjects and a validation panel of 104 subjects from the general population of São Paulo in Brazil. Correction for general taste-sensitivity allowed us to identify a SNP in the cluster of bitter taste receptors on chr12 (10.88- 11.24 Mb, build 36.1) significantly associated (best SNP: rs2708377, P = 5.31 × 10(-13), r(2) = 8.9%, β = -0.12, s.e. = 0.016) with the perceived bitterness of caffeine. This association overlaps with-but is statistically distinct from-the previously identified SNP rs10772420 influencing the perception of quinine bitterness that falls in the same bitter taste cluster. We replicated this association to quinine perception (P = 4.97 × 10(-37), r(2) = 23.2%, β = 0.25, s.e. = 0.020) and additionally found the effect of this genetic locus to be concentration specific with a strong impact on the perception of low, but no impact on the perception of high concentrations of quinine. Our study, thus, furthers our understanding of the complex genetic architecture of bitter taste perception.

Theory of mind tasks and executive functions: A systematic review of group studies in neurology.

A growing number of studies have been addressing the relationship between theory of mind (TOM) and executive functions (EF) in patients with acquired neurological pathology. In order to provide a global overview on the main findings, we conducted a systematic review on group studies where we aimed to (1) evaluate the patterns of impaired and preserved abilities of both TOM and EF in groups of patients with acquired neurological pathology and (2) investigate the existence of particular relations between different EF domains and TOM tasks. The search was conducted in Pubmed/Medline. A total of 24 articles met the inclusion criteria. We considered for analysis classical clinically accepted TOM tasks (first- and second-order false belief stories, the Faux Pas test, Happe's stories, the Mind in the Eyes task, and Cartoon's tasks) and EF domains (updating, shifting, inhibition, and access). The review suggests that (1) EF and TOM appear tightly associated. However, the few dissociations observed suggest they cannot be reduced to a single function; (2) no executive subprocess could be specifically associated with TOM performances; (3) the first-order false belief task and the Happe's story task seem to be less sensitive to neurological pathologies and less associated to EF. Even though the analysis of the reviewed studies demonstrates a close relationship between TOM and EF in patients with acquired neurological pathology, the nature of this relationship must be further investigated. Studies investigating ecological consequences of TOM and EF deficits, and intervention researches may bring further contributions to this question.

What do we gain from simplicity versus complexity in species distribution models?

Species distribution models (SDMs) are widely used to explain and predict species ranges and environmental niches. They are most commonly constructed by inferring species' occurrence-environment relationships using statistical and machine-learning methods. The variety of methods that can be used to construct SDMs (e.g. generalized linear/additive models, tree-based models, maximum entropy, etc.), and the variety of ways that such models can be implemented, permits substantial flexibility in SDM complexity. Building models with an appropriate amount of complexity for the study objectives is critical for robust inference. We characterize complexity as the shape of the inferred occurrence-environment relationships and the number of parameters used to describe them, and search for insights into whether additional complexity is informative or superfluous. By building 'under fit' models, having insufficient flexibility to describe observed occurrence-environment relationships, we risk misunderstanding the factors shaping species distributions. By building 'over fit' models, with excessive flexibility, we risk inadvertently ascribing pattern to noise or building opaque models. However, model selection can be challenging, especially when comparing models constructed under different modeling approaches. Here we argue for a more pragmatic approach: researchers should constrain the complexity of their models based on study objective, attributes of the data, and an understanding of how these interact with the underlying biological processes. We discuss guidelines for balancing under fitting with over fitting and consequently how complexity affects decisions made during model building. Although some generalities are possible, our discussion reflects differences in opinions that favor simpler versus more complex models. We conclude that combining insights from both simple and complex SDM building approaches best advances our knowledge of current and future species ranges.

The longitudinal association between social functioning and theory of mind in first episode psychosis

Introduction. There is some cross-sectional evidence that theory of mind ability is associated with social functioning in those with psychosis but the direction of this relationship is unknown. This study investigates the longitudinal association between both theory of mind and psychotic symptoms and social functioning outcome in first-episode psychosis. Methods. Fifty-four people with first-episode psychosis were followed up at 6 and 12 months. Random effects regression models were used to estimate the stability of theory of mind over time and the association between baseline theory of mind and psychotic symptoms and social functioning outcome. Results. Neither baseline theory of mind ability (regression coefficients: Hinting test 1.07 95% CI 0.74, 2.88; Visual Cartoon test 2.91 95% CI 7.32, 1.51) nor baseline symptoms (regression coefficients: positive symptoms 0.04 95% CI 1.24, 1.16; selected negative symptoms 0.15 95% CI 2.63, 2.32) were associated with social functioning outcome. There was evidence that theory of mind ability was stable over time, (regression coefficients: Hinting test 5.92 95% CI 6.66, 8.92; Visual Cartoon test score 0.13 95% CI 0.17, 0.44). Conclusions. Neither baseline theory of mind ability nor psychotic symptoms are associated with social functioning outcome. Further longitudinal work is needed to understand the origin of social functioning deficits in psychosis.

Recommandations de pratique clinique dans la schizophrénie: de la théorie à la mise en application = Clinical practice guidelines for the treatment of schizophrenia: from theory to practice

Dans le cadre d'une étude rétrospective au sein d'une unité de réhabilitation, nous avons cherché à examiner le degré de respect de recommandations de pratique clinique (RPC) abordant le traitement pharmacologique au long cours de la schizophrénie, par des médecins qui n'en ont qu'une connaissance indirecte. The Expert Consensus Guideline for the treatment of schizophrenia (ECGTS) a été retenu comme référence sur la base d'une comparaison avec cinq autres RPC principales. Sur un collectif de 20 patients, les recommandations de l'ECGTS sont totalement respectées dans 65 % des cas, partiellement respectées dans 10 % et non respectées dans 25 %, démontrant ainsi que la pratique clinique est clairement perfectible (principalement dans le traitement des symptômes psychotiques et dépressifs). Cependant, le respect des RPC ne garantit pas forcément la résolution de tous les problèmes cliniques rencontrés : 12 patients sur 20 présentent des effets secondaires à l'évaluation clinique et pour huit d'entre eux, les recommandations à ce niveau, sont respectées. Notre étude montre cependant que le choix et l'application d'une RPC ne sont pas simples. Les RPC actuelles donnent peu ou pas d'instruments de mesure, ni de critères précis pour évaluer les problèmes cliniques auxquels elles font référence. L'avenir appartient donc à des RPC qui proposent, outre les recommandations cliniques elles-mêmes, les moyens de leur vérification et de leur application sur le terrain.