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.

Venezuelan economic laboratory. The Case of the altruistic economy of Felipe Pérez Martí

Felipe Pérez Martí, who was the Venezuelan Minister of Planning and Development in the government of Hugo Chávez, proposes an economic model that he calls the altruistic economy or fourth way, which leads cooperative game theory to its logical extremes postulating a pure communism. Here we sustain that, first, it is impossible in the model of Pérez Martí to marginally allocate non-primary goods to those most in need or who most value them, facing a problem of defective economic calculation, and second, in order to achieve equality, he would have to replace his atomic local planners by a central planner, who would be unable to overcome the problem of imperfect and and incomplete information.

Immigrants'assimilation process in a segmented labor market

While much of the literature on immigrants' assimilation has focused on countries with a large tradition of receiving immigrants and with flexible labor markets, very little is known on how immigrants adjust to other types of host economies. With its severe dual labor market, and an unprecedented immigration boom, Spain presents a quite unique experience to analyze immigrations' assimilation process. Using data from the 2000 to 2008 Labor Force Survey, we find that immigrants are more occupationally mobile than natives, and that much of this greater flexibility is explained by immigrants' assimilation process soon after arrival. However, we find little evidence of convergence, especially among women and high skilled immigrants. This suggests that instead of integrating, immigrants occupationally segregate, providing evidence consistent with both imperfect substitutability and immigrants' human capital being under-valued. Additional evidence on the assimilation of earnings and the incidence of permanent employment by different skill levels also supports the hypothesis of segmented labor markets.

A Folk Theorem for Games when Frequent Monitoring Decreases Noise

This paper studies frequent monitoring in an infinitely repeated game with imperfect public information and discounting, where players observe the state of a continuous time Brownian process at moments in time of length _. It shows that a limit folk theorem can be achieved with imperfect public monitoring when players monitor each other at the highest frequency, i.e., _. The approach assumes that the expected joint output depends exclusively on the action profile simultaneously and privately decided by the players at the beginning of each period of the game, but not on _. The strong decreasing effect on the expected immediate gains from deviation when the interval between actions shrinks, and the associated increase precision of the public signals, make the result possible in the limit. JEL: C72/73, D82, L20. KEYWORDS: Repeated Games, Frequent Monitoring, Public Monitoring, Brownian Motion.

Simulium spp. control program in Rio Grande do Sul, Brazil

Insects of the Simuliidae family have been the object of control in Rio Grande do Sul since the 70s. Their constant attacks became a social-economical problem as well as a problem of Public Health, with serious consequences to men and to the economy of the areas in which the insects develop. At first, the control was done with a chemical larvicide Themephos ABATE 500 E, but an imperfect measuring of outflow to determine the quantity of the product made Simulium spp. resistant to it. From 1983 on, following a study of a new method for the outflow measuring, we started to use a biological larvicide Bacillus thuringiensis serovar israelensis based. The biological control uses the new method in 36.4% of the state area, assisting about 3,500,000 inhabitants.

Factor shares, the price markup, and the elasticity of substitution between capital and labor.

In a Walrasian labor market, the labor income share is constant under the assumptions of a Cobb-Douglas production function and perfect competition. Given the observed decline of the labor share in recent decades, this paper relaxes these assumptions, proposes a time-series calculation of the aggregate price mark-up reflecting the degree of imperfect competition in the product market, and provides estimates of the elasticity of substitution under such product market imperfections. We focus on Spain and the U.S. and show that the elasticity of substitution is above one in Spain and below one in the U.S. We also show that the price markup drives the elasticity of substitution away from one, upwards in Spain, downwards in the U.S. These results are used to explain the declining path of the labor income share, common to both economies, and their contrasted patterns in terms of capital deepening.

Derris (Lonchocarpus) urucu (Leguminosae) Extract Modifies the Peritrophic Matrix Structure of Aedes aegypti (Diptera:Culicidae)

Aqueous suspension of ethanol extracts of Derris (Lonchocarpus) urucu (Leguminosae), collected in the state of Amazonas, Brazil, were tested for larvicidal activity against the mosquito Aedes aegypti (Diptera:Culicidae). The aim of this study was to observe the alterations of peritrophic matrix in Ae. aegypti larvae treated with an aqueous suspension of D. urucu extract. Different concentrations of D. urucu root extract were tested against fourth instar larvae. One hundred percent mortality was observed at 150 µg/ml (LC50 17.6 µg/ml) 24 h following treatment. In response to D. urucu feeding, larvae excreted a large amount of amorphous feces, while control larvae did not produce feces during the assay period. Ultrastructural studies showed that larvae fed with 150 µg/ml of D. urucu extract for 4 h have an imperfect peritrophic matrix and extensive damage of the midgut epithelium. Data indicate a protective role for the peritrophic matrix. The structural modification of the peritrophic matrix is intrinsically associated with larval mortality.

Media exposure and internal migration-evidence from Indonesia

This paper investigates the impact of television on internal migration in Indonesia. We exploit the differential introduction of private television throughout the country and the variation in signal reception due to topography to estimate the causal effect of media exposure. Our estimates reveal important long and short run effects. An increase of one standard deviation in the number of private TV channels received in the area of residence reduces future inter-provincial migration by 1.7-2.7 percentage points, and all migration (inter and intra-provincial) by 4-7.4 percentage points. Short run effects are slightly smaller, but still sizeable and statistically significant. We also show that respondents less exposed to private TV are more likely to consider themselves among the poorest groups of the society. As we discuss in a stylized model of migration choice under imperfect information, these findings are consistent with Indonesia citizens over-estimating the net gains from internal migration.

Characterization of new Schistosoma mansoni microsatellite loci in sequences obtained from public DNA databases and microsatellite enriched genomic libraries

In the last decade microsatellites have become one of the most useful genetic markers used in a large number of organisms due to their abundance and high level of polymorphism. Microsatellites have been used for individual identification, paternity tests, forensic studies and population genetics. Data on microsatellite abundance comes preferentially from microsatellite enriched libraries and DNA sequence databases. We have conducted a search in GenBank of more than 16,000 Schistosoma mansoni ESTs and 42,000 BAC sequences. In addition, we obtained 300 sequences from CA and AT microsatellite enriched genomic libraries. The sequences were searched for simple repeats using the RepeatMasker software. Of 16,022 ESTs, we detected 481 (3%) sequences that contained 622 microsatellites (434 perfect, 164 imperfect and 24 compounds). Of the 481 ESTs, 194 were grouped in 63 clusters containing 2 to 15 ESTs per cluster. Polymorphisms were observed in 16 clusters. The 287 remaining ESTs were orphan sequences. Of the 42,017 BAC end sequences, 1,598 (3.8%) contained microsatellites (2,335 perfect, 287 imperfect and 79 compounds). The 1,598 BAC end sequences 80 were grouped into 17 clusters containing 3 to 17 BAC end sequences per cluster. Microsatellites were present in 67 out of 300 sequences from microsatellite enriched libraries (55 perfect, 38 imperfect and 15 compounds). From all of the observed loci 55 were selected for having the longest perfect repeats and flanking regions that allowed the design of primers for PCR amplification. Additionally we describe two new polymorphic microsatellite loci.

The prediction of cardiovascular events is improved by combination of Framingham risk score and subclinical atherosclerosis imaging

Purpose: In primary prevention of cardiovascular disease (CVD), it is accepted that the intensity of risk factor treatment should be guided by the magnitude of absolute risk. Risk factors tools like Framingham risk score (FHS) or noninvasive atherosclerosis imaging tests are available to detect high risk subjects. However, these methods are imperfect and may misclassify a large number of individuals. The purpose of this prospective study was to evaluate whether the prediction of future cardiovascular events (CVE) can be improved when subclinical imaging atherosclerosis (SCATS) is combined with the FRS in asymptomatic subjects. Methods: Overall, 1038 asymptomatic subjects (413 women, 625 men, mean age 49.1±12.8 years) were assessed for their cardiovascular risk using the FRS. B-mode ultrasonography on carotid and femoral arteries was performed by two investigators to detect atherosclerotic plaques (focal thickening of intima-media > 1.2 mm) and to measure carotid intima-media thickness (C-IMT). The severity of SCATS was expressed by an ATS-burden Score (ABS) reflecting the number of the arterial sites with >1 plaques (range 0-4). CVE were defined as fatal or non fatal acute coronary syndrome, stroke, or angioplasty for peripheral artery disease. Results: during a mean follow-up of 4.9±3.1 years, 61 CVE were recorded. Event rates the rate of CVE increased significantly from 2.7% to 39.1% according to the ABS (p<0.001) and from 4% to 24.6% according to the quartiles of C-IMT. Similarly, FRS predicted CVE (p<0.001). When computing the angiographic markers of SCATS in addition of FRS, we observed an improvement of net reclassification rate of 16.6% (p< 0.04) for ABS as compared to 5.5% (p = 0.26) for C-IMT. Conclusion: these results indicate that the detection of subjects requiring more attention to prevent CVE can be significantly improved when using both FRS and SCATS imaging.

Impact of previous virological treatment failures and adherence on the outcome of antiretroviral therapy in 2007.

BACKGROUND: Combination antiretroviral treatment (cART) has been very successful, especially among selected patients in clinical trials. The aim of this study was to describe outcomes of cART on the population level in a large national cohort. METHODS: Characteristics of participants of the Swiss HIV Cohort Study on stable cART at two semiannual visits in 2007 were analyzed with respect to era of treatment initiation, number of previous virologically failed regimens and self reported adherence. Starting ART in the mono/dual era before HIV-1 RNA assays became available was counted as one failed regimen. Logistic regression was used to identify risk factors for virological failure between the two consecutive visits. RESULTS: Of 4541 patients 31.2% and 68.8% had initiated therapy in the mono/dual and cART era, respectively, and been on treatment for a median of 11.7 vs. 5.7 years. At visit 1 in 2007, the mean number of previous failed regimens was 3.2 vs. 0.5 and the viral load was undetectable (<50 copies/ml) in 84.6% vs. 89.1% of the participants, respectively. Adjusted odds ratios of a detectable viral load at visit 2 for participants from the mono/dual era with a history of 2 and 3, 4, >4 previous failures compared to 1 were 0.9 (95% CI 0.4-1.7), 0.8 (0.4-1.6), 1.6 (0.8-3.2), 3.3 (1.7-6.6) respectively, and 2.3 (1.1-4.8) for >2 missed cART doses during the last month, compared to perfect adherence. From the cART era, odds ratios with a history of 1, 2 and >2 previous failures compared to none were 1.8 (95% CI 1.3-2.5), 2.8 (1.7-4.5) and 7.8 (4.5-13.5), respectively, and 2.8 (1.6-4.8) for >2 missed cART doses during the last month, compared to perfect adherence. CONCLUSIONS: A higher number of previous virologically failed regimens, and imperfect adherence to therapy were independent predictors of imminent virological failure.

An isoform of microtubule-associated protein 2 (MAP2) containing four repeats of the tubulin-binding motif.

Microtubule-associated protein 2 (MAP2) exists in both high- and low-molecular mass isoforms, each of which has a tubulin-binding domain consisting of 3 imperfect tandem repeats of 31 amino acids containing a more highly conserved 18 amino acid 'core' sequence. We describe here a novel form of low molecular mass MAP2 (MAP2c) that contains an additional 4th repeat of this tubulin-binding motif. Like the 3 previously known repeat sequences, this 4th copy is highly conserved between MAP2 and the two other known members of the same gene family, tau and MAP4. In each of these three genes the additional 4th repeat is inserted between the 1st and 2nd repeats of the 3-repeat form of the molecule. Experiments with brain cell cultures, in which the relative proportions of neurons and glia had been manipulated by drug treatment, showed that 4-repeat MAP2c is associated with glial cells whereas 3-repeat MAP2c is expressed in neurons. Whereas 3-repeat MAP2c is expressed early in development and then declines, the level of 4-repeat MAP2c increases later in development, corresponding to the relatively late differentiation of glial cells compared to neurons. When transfected into non-neuronal cells, the 4-repeat version of MAP2c behaved indistinguishably from the 3-repeat form in stabilising and rearranging cellular microtubules. The presence of an additional 4th repeat of the tubulin-binding motif in all three members of the MAP2 gene family suggests that this variant arose prior to their differentiation from an ancestral gene.

Topics in public finance: social security and taxation

Summary The field of public finance focuses on the spending and taxing activities of governments and their influence on the allocation of resources and distribution of income. This work covers in three parts different topics related to public finance which are currently widely discussed in media and politics. The first two parts deal with issues on social security, which is in general one of the biggest spending shares of governments. The third part looks at the main income source of governments by analyzing the perceived value of tax competition. Part one deals with the current problem of increased early retirement by focusing on Switzerland as a special case. Early retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that the wealth effect also plays an important role in the retirement decision for middle and high income earners. An actuarially fair, but mandatory funded system with a relatively high replacement rate may thus contribute to a low labor market participation rate of elderly workers. We provide evidence using a unique dataset on individual retirement decisions in Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is a key determinant in the retirement decisions. The higher the accumulated pension capital, the earlier men, and to a smaller extent women, tend to leave the workforce. The fact that early retirement has become much more prevalent in the last 15 years is a further indicator of the importance of a wealth effect, as the maturing of the Swiss mandatory funded pension system over that period has led to an increase in the effective replacement rates for middle and high income earners. Part two covers the theoretical side of social security. Theories analyzing optimal social security benefits provide important qualitative results, by mainly using one general type of an economy. Economies are however very diverse concerning numerous aspects, one of the most important being the wealth level. This can lead to significant quantitative benefit differences that imply differences in replacement rates and levels of labor supply. We focus on several aspects related to this fact. In a within cohort social security model, we introduce disability insurance with an imperfect screening mechanism. We then vary the wealth level of the model economy and analyze how the optimal social security benefit structure or equivalently, the optimal replacement rates, changes depending on the wealth level of the economy, and if the introduction of disability insurance into a social security system is preferable for all economies. Second, the screening mechanism of disability insurance and the threshold level at which people are defined as disabled can differ. For economies with different wealth levels, we determine for different thresholds the screening level that maximizes social welfare. Finally, part three turns to the income of governments, by adding an element to the controversy on tax competition versus tax harmonization.2 Inter-jurisdictional tax competition can generate at least two potential benefits or costs: On a public level, tax competition may result in a lower or higher efficiency in the production of public services. But there is also a more private benefit in the form of an option for individuals to move to a community with a lower tax rate in the future. To explore the value citizens attach to tax competition we analyze a unique popular vote for a complete tax harmonization between communities in the third largest Swiss canton, Vaud. Although a majority of voters would have seemingly benefited from replacing the current tax rate by a revenue-neutral average tax rate, the proposal was rejected by a large margin. Our estimates suggest that the estimated combined perceived benefit from tax competition is in the range of 10%.

Two-sided learning in new keynesian models: dynamics, (lack of) convergence and the value of information

This paper investigates the role of learning by private agents and the central bank (two-sided learning) in a New Keynesian framework in which both sides of the economy have asymmetric and imperfect knowledge about the true data generating process. We assume that all agents employ the data that they observe (which may be distinct for different sets of agents) to form beliefs about unknown aspects of the true model of the economy, use their beliefs to decide on actions, and revise these beliefs through a statistical learning algorithm as new information becomes available. We study the short-run dynamics of our model and derive its policy recommendations, particularly with respect to central bank communications. We demonstrate that two-sided learning can generate substantial increases in volatility and persistence, and alter the behavior of the variables in the model in a signifficant way. Our simulations do not converge to a symmetric rational expectations equilibrium and we highlight one source that invalidates the convergence results of Marcet and Sargent (1989). Finally, we identify a novel aspect of central bank communication in models of learning: communication can be harmful if the central bank's model is substantially mis-specified

Composition and cost of drugs stored at home by elderly patients.

BACKGROUND: Elderly people often have multiple chronic diseases, are frequently treated by several physicians, and also use over-the-counter medications. Excessive prescribing, imperfect therapeutic adherence, treatment modifications after hospitalization, and oversized drug packages result in home storage of leftover drugs, resulting in a waste of healthcare resources. PATIENTS AND METHODS: All patients aged >/=75 years hospitalized for >24 hours during a 6-month period in an urban teaching hospital in Switzerland were eligible for inclusion in a study collecting sociodemographics, medical, functional, and psychosocial characteristics. Six months later, a research nurse visited the patients at home and recorded the names, number of tablets, and expiration dates of all open or intact drug packages, and the doses actually taken. Acquisition costs of these drugs were computed. RESULTS: One hundred ninety-five patients were included (127 women; mean age 82.2 +/- 4.8 y, range 75-96). They had a total of 2059 drugs (mean per patient 10.3 +/- 6.7, range per patient 1-42), corresponding to a total cost of (US) $62 826 (mean per patient 322 +/- 275, range per patient 10-1571). Self-reported drug intake was regular for 36% of the drugs (46.5% of total costs) and occasional for 11% (6.1%), whereas 35.7% (30.1%) had been stopped during the last month. Cardiovascular drugs amounted to 36.6% of the drugs and 55.5% of the costs. None of the patients' characteristics was significantly associated with a greater number of drugs and higher costs. CONCLUSIONS: Drugs stored at home by elderly patients were worth about $320 per patient. Only about one-third of these drugs were regularly taken. In the context of resources shortage, innovative solutions should be found to reduce the waste linked with drugs stopped in previous months.