Flexible information acquisition and optimal Tobin tax in tractable dynamic global games

My dissertation focuses on dynamic aspects of coordination processes such as reversibility of early actions, option to delay decisions, and learning of the environment from the observation of other people’s actions. This study proposes the use of tractable dynamic global games where players privately and passively learn about their actions’ true payoffs and are able to adjust early investment decisions to the arrival of new information to investigate the consequences of the presence of liquidity shocks to the performance of a Tobin tax as a policy intended to foster coordination success (chapter 1), and the adequacy of the use of a Tobin tax in order to reduce an economy’s vulnerability to sudden stops (chapter 2). Then, it analyzes players’ incentive to acquire costly information in a sequential decision setting (chapter 3). In chapter 1, a continuum of foreign agents decide whether to enter or not in an investment project. A fraction λ of them are hit by liquidity restrictions in a second period and are forced to withdraw early investment or precluded from investing in the interim period, depending on the actions they chose in the first period. Players not affected by the liquidity shock are able to revise early decisions. Coordination success is increasing in the aggregate investment and decreasing in the aggregate volume of capital exit. Without liquidity shocks, aggregate investment is (in a pivotal contingency) invariant to frictions like a tax on short term capitals. In this case, a Tobin tax always increases success incidence. In the presence of liquidity shocks, this invariance result no longer holds in equilibrium. A Tobin tax becomes harmful to aggregate investment, which may reduces success incidence if the economy does not benefit enough from avoiding capital reversals. It is shown that the Tobin tax that maximizes the ex-ante probability of successfully coordinated investment is decreasing in the liquidity shock. Chapter 2 studies the effects of a Tobin tax in the same setting of the global game model proposed in chapter 1, with the exception that the liquidity shock is considered stochastic, i.e, there is also aggregate uncertainty about the extension of the liquidity restrictions. It identifies conditions under which, in the unique equilibrium of the model with low probability of liquidity shocks but large dry-ups, a Tobin tax is welfare improving, helping agents to coordinate on the good outcome. The model provides a rationale for a Tobin tax on economies that are prone to sudden stops. The optimal Tobin tax tends to be larger when capital reversals are more harmful and when the fraction of agents hit by liquidity shocks is smaller. Chapter 3 focuses on information acquisition in a sequential decision game with payoff complementar- ity and information externality. When information is cheap relatively to players’ incentive to coordinate actions, only the first player chooses to process information; the second player learns about the true payoff distribution from the observation of the first player’s decision and follows her action. Miscoordination requires that both players privately precess information, which tends to happen when it is expensive and the prior knowledge about the distribution of the payoffs has a large variance.

Dynamic exercise versus tag game warm up: The acute effect on agility and vertical jump in children

Although dynamic and stretching exercises have been widely investigated, there is little information about warm up performed by tag games. Thus, the purpose of the present study was to verify the acute effect of dynamic exercises compared to a tag game warm up on agility and vertical jump in children. 25 boys and 24 girls participated in this study and performed the agility and vertical jump tests after warm up based on dynamic exercises or as a tag game lasting 10 min each in two different days randomly. Dynamic exercises warm up consisted in a run lasting 2.5 min followed by 2 series of 8 dynamic exercises lasting 10 seconds each interspersed with 20s of light run to recovery. Tag game warm up was performed by a tag game with two variations lasting 5 min each. The first variation there was a single cather, which aimed to get the other participants by touching hands. In the second part of the game, the rules were the same except that the participant that was caught had to help the catcher forming a team of catchers. Warm up intensity was monitored by OMNI perceived exertion scale. ANOVA 2x2 for repeated measures (Warm up x Sex) demonstrated no significant differences between dynamic exercises and tag game for agility and vertical jump (P>0.05) for boys and girls. Perceived exertion was significantly higher in tag game compared to dynamic exercises on girls (P<0.05). Both warm up models showed similar acute effects on agility and vertical jump in children. © Faculty of Education. University of Alicante.

Model of a game for improving integrated decisions in production management

This paper presents the results obtained with a business game whose model represents the decision making process related to two moments at an industrial company. The first refers to the project of the industrial plant, and the second to its management. The game model was conceived so the player's first decision would establish capacity and other parameters such as quantities of each product to produce, marketing expenses, research and development, quality, advertising, salaries, if purchases will be made in installments or in cash, if there will be credit sales and how many installments will be allowed and the number of workers in the assembly area. An experiment was conducted with employees of a Brazilian company. Data obtained indicate that the players have lack of contents, especially in finances. Although these results cannot be generalized, they confirm prior results with undergraduate and graduate students and they indicate the need for reinforcement in this undergraduate area. © 2012 Springer-Verlag.

Dynamics of Spatial Game Theory Networks with Novel Modifications

Introduction: Advances in biotechnology have shed light on many biological processes. In biological networks, nodes are used to represent the function of individual entities within a system and have historically been studied in isolation. Network structure adds edges that enable communication between nodes. An emerging fieldis to combine node function and network structure to yield network function. One of the most complex networks known in biology is the neural network within the brain. Modeling neural function will require an understanding of networks, dynamics, andneurophysiology. It is with this work that modeling techniques will be developed to work at this complex intersection. Methods: Spatial game theory was developed by Nowak in the context of modeling evolutionary dynamics, or the way in which species evolve over time. Spatial game theory offers a two dimensional view of analyzingthe state of neighbors and updating based on the surroundings. Our work builds upon this foundation by studying evolutionary game theory networks with respect to neural networks. This novel concept is that neurons may adopt a particular strategy that will allow propagation of information. The strategy may therefore act as the mechanism for gating. Furthermore, the strategy of a neuron, as in a real brain, isimpacted by the strategy of its neighbors. The techniques of spatial game theory already established by Nowak are repeated to explain two basic cases and validate the implementation of code. Two novel modifications are introduced in Chapters 3 and 4 that build on this network and may reflect neural networks. Results: The introduction of two novel modifications, mutation and rewiring, in large parametricstudies resulted in dynamics that had an intermediate amount of nodes firing at any given time. Further, even small mutation rates result in different dynamics more representative of the ideal state hypothesized. Conclusions: In both modificationsto Nowak's model, the results demonstrate the network does not become locked into a particular global state of passing all information or blocking all information. It is hypothesized that normal brain function occurs within this intermediate range and that a number of diseases are the result of moving outside of this range.

Game-theoretic view on intermediated exchange

Intermediaries permeate modern economic exchange. Most classical models on intermediated exchange are driven by information asymmetry and inventory management. These two factors are of reduced significance in modern economies. This makes it necessary to develop models that correspond more closely to modern financial marketplaces. The goal of this dissertation is to propose and examine such models in a game theoretical context. The proposed models are driven by asymmetries in the goals of different market participants. Hedging pressure as one of the most critical aspects in the behavior of commercial entities plays a crucial role. The first market model shows that no equilibrium solution can exist in a market consisting of a commercial buyer, a commercial seller and a non-commercial intermediary. This indicates a clear economic need for non-commercial trading intermediaries: a direct trade from seller to buyer does not result in an equilibrium solution. The second market model has two distinct intermediaries between buyer and seller: a spread trader/market maker and a risk-neutral intermediary. In this model a unique, natural equilibrium solution is identified in which the supply-demand surplus is traded by the risk-neutral intermediary, whilst the market maker trades the remainder from seller to buyer. Since the market maker’s payoff for trading at the identified equilibrium price is zero, this second model does not provide any motivation for the market maker to enter the market. The third market model introduces an explicit transaction fee that enables the market maker to secure a positive payoff. Under certain assumptions on this transaction fee the equilibrium solution of the previous model applies and now also provides a financial motivation for the market maker to enter the market. If the transaction fee violates an upper bound that depends on supply, demand and riskaversity of buyer and seller, the market will be in disequilibrium.

Optimal game theoretic distributed control methodologies in small scale power systems

This dissertation presents the competitive control methodologies for small-scale power system (SSPS). A SSPS is a collection of sources and loads that shares a common network which can be isolated during terrestrial disturbances. Micro-grids, naval ship electric power systems (NSEPS), aircraft power systems and telecommunication system power systems are typical examples of SSPS. The analysis and development of control systems for small-scale power systems (SSPS) lacks a defined slack bus. In addition, a change of a load or source will influence the real time system parameters of the system. Therefore, the control system should provide the required flexibility, to ensure operation as a single aggregated system. In most of the cases of a SSPS the sources and loads must be equipped with power electronic interfaces which can be modeled as a dynamic controllable quantity. The mathematical formulation of the micro-grid is carried out with the help of game theory, optimal control and fundamental theory of electrical power systems. Then the micro-grid can be viewed as a dynamical multi-objective optimization problem with nonlinear objectives and variables. Basically detailed analysis was done with optimal solutions with regards to start up transient modeling, bus selection modeling and level of communication within the micro-grids. In each approach a detail mathematical model is formed to observe the system response. The differential game theoretic approach was also used for modeling and optimization of startup transients. The startup transient controller was implemented with open loop, PI and feedback control methodologies. Then the hardware implementation was carried out to validate the theoretical results. The proposed game theoretic controller shows higher performances over traditional the PI controller during startup. In addition, the optimal transient surface is necessary while implementing the feedback controller for startup transient. Further, the experimental results are in agreement with the theoretical simulation. The bus selection and team communication was modeled with discrete and continuous game theory models. Although players have multiple choices, this controller is capable of choosing the optimum bus. Next the team communication structures are able to optimize the players’ Nash equilibrium point. All mathematical models are based on the local information of the load or source. As a result, these models are the keys to developing accurate distributed controllers.

Listening to your heart and feeling yourself: effects of exposure to interoceptive signals during the ultimatum game

The ultimatum game (UG) is commonly used to study the tension between financial self-interest and social equity motives. Here, we investigated whether experimental exposure to interoceptive signals influences participants' behavior in the UG. Participants were presented with various bodily sounds--i.e., their own heart, another person's heart, or the sound of footsteps--while acting both in the role of responder and proposer. We found that listening to one's own heart sound, compared to the other bodily sounds: (1) increased subjective feelings of unfairness, but not rejection behavior, in response to unfair offers and (2) increased the unfair offers while playing in the proposer role. These findings suggest that heightened feedback of one's own visceral processes may increase a self-centered perspective and drive socioeconomic exchanges accordingly. In addition, this study introduces a valuable procedure to manipulate online the access to interoceptive signals and for exploring the interplay between viscero-sensory information and cognition.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

Effects of team Knowledge and ecological constraints on decisional processes in customized football game scenarios

Several theories assume that successful team coordination is partly based on knowledge that helps anticipating individual contributions necessary in a situational task. It has been argued that a more ecological perspective needs to be considered in contexts evolving dynamically and unpredictably. In football, defensive plays are usually coordinated according to strategic concepts spanning all members and large areas of the playfield. On the other hand, fewer people are involved in offensive plays as these are less projectable and strongly constrained by ecological characteristics. The aim of this study is to test the effects of ecological constraints and player knowledge on decision making in offensive game scenarios. It is hypothesized that both knowledge about team members and situational constraints will influence decisional processes. Effects of situational constraints are expected to be of higher magnitude. Two teams playing in the fourth league of the Swiss Football Federation participate in the study. Forty customized game scenarios were developed based on the coaches’ information about player positions and game strategies. Each player was shown in ball possession four times. Participants were asked to take the perspective of the player on the ball and to choose a passing destination and a recipient. Participants then rated domain specific strengths (e.g., technical skills, game intelligence) of each of their teammates. Multilevel models for categorical dependent variables (team members) will be specified. Player knowledge (rated skills) and ecological constraints (operationalized as each players’ proximity and availability for ball reception) are included as predictor variables. Data are currently being collected. Results will yield effects of parameters that are stable across situations as well as of variable parameters that are bound to situational context. These will enable insight into the degree to which ecological constraints and more enduring team knowledge are involved in decisional processes aimed at coordinating interpersonal action.

Ahead of the Game: Middle and Upper Palaeolithic Hunting Behaviors in the Southern Caucasus

Over the past several decades a variety of models have been proposed to explain perceived behavioral and cognitive differences between Neanderthals and modern humans. A key element in many of these models and one often used as a proxy for behavioral “modernity” is the frequency and nature of hunting among Palaeolithic populations. Here new archaeological data from Ortvale Klde, a late Middle–early Upper Palaeolithic rockshelter in the Georgian Republic, are considered, and zooarchaeological methods are applied to the study of faunal acquisition patterns to test whether they changed significantly from the Middle to the Upper Palaeolithic. The analyses demonstrate that Neanderthals and modern humans practiced largely identical hunting tactics and that the two populations were equally and independently capable of acquiring and exploiting critical biogeographical information pertaining to resource availability and animal behavior. Like lithic techno-typological traditions, hunting behaviors are poor proxies for major behavioral differences between Neanderthals and modern humans, a conclusion that has important implications for debates surrounding the Middle–Upper Palaeolithic transition and what features constitute “modern” behavior. The proposition is advanced that developments in the social realm of Upper Palaeolithic societies allowed the replacement of Neanderthals in the Caucasus with little temporal or spatial overlap and that this process was widespread beyond traditional topographic and biogeographical barriers to Neanderthal mobility.

The analysis of the basketball coach speech during the moments of game and pause in relation to the performance in competition

In the area of the professional competition, the coach is a fundamental part in the management of a team and more concretely in the game planning. During the competition, the management of the times of pause and times out as well as the conduct of the coach during the same ones is an aspect to analyze in the sports performance. It is for this that it becomes necessary to know some of the behaviors that turn out to be more frequent by the coach and that are more related to a positive performance of his players. For it there has been realized a study of 7 cases of expert coaches in those that his verbal behavior has observed during 4 games. It has focused on the content of the information only to verbal level, on his meaning. The information that have been obtained in the study shows a major quantity of information elaborated during the pauses of the games and a major tactical content with regard to the moments of game. On the other hand, a relation exists between a major number of questions and a minor number of psychological instructions when the score is adverse, whereas in case of victory, a direct relation does not exist with any category. The rest of categories of the speech do not meet influenced directly for the result, for what it is not possible to consider a direct and immediate relation between the coach verbal behavior during the pauses and the result of the game, except in punctual moments.

3D simulation of complex shading affecting PV systems taking benefit from the power of graphics cards developed for the video game industry

Shading reduces the power output of a photovoltaic (PV) system. The design engineering of PV systems requires modeling and evaluating shading losses. Some PV systems are affected by complex shading scenes whose resulting PV energy losses are very difficult to evaluate with current modeling tools. Several specialized PV design and simulation software include the possibility to evaluate shading losses. They generally possess a Graphical User Interface (GUI) through which the user can draw a 3D shading scene, and then evaluate its corresponding PV energy losses. The complexity of the objects that these tools can handle is relatively limited. We have created a software solution, 3DPV, which allows evaluating the energy losses induced by complex 3D scenes on PV generators. The 3D objects can be imported from specialized 3D modeling software or from a 3D object library. The shadows cast by this 3D scene on the PV generator are then directly evaluated from the Graphics Processing Unit (GPU). Thanks to the recent development of GPUs for the video game industry, the shadows can be evaluated with a very high spatial resolution that reaches well beyond the PV cell level, in very short calculation times. A PV simulation model then translates the geometrical shading into PV energy output losses. 3DPV has been implemented using WebGL, which allows it to run directly from a Web browser, without requiring any local installation from the user. This also allows taken full benefits from the information already available from Internet, such as the 3D object libraries. This contribution describes, step by step, the method that allows 3DPV to evaluate the PV energy losses caused by complex shading. We then illustrate the results of this methodology to several application cases that are encountered in the world of PV systems design. Keywords: 3D, modeling, simulation, GPU, shading, losses, shadow mapping, solar, photovoltaic, PV, WebGL

A Review on Repeated Games and Reputations with Incomplete Information

In this project we review the effects of reputation within the context of game theory. This is done through a study of two key papers. First, we examine a paper from Fudenberg and Levine: Reputation and Equilibrium Selection in Games with a Patient Player (1989). We add to this a review Gossner’s Simple Bounds on the Value of a Reputation (2011). We look specifically at scenarios in which a long-run player faces a series of short-run opponents, and how the former may develop a reputation. In turn, we show how reputation leads directly to both lower and upper bounds on the long-run player’s payoffs.