Sunday, 30 August 2009

PLoS One Paper - Accidental Outcomes Guide Punishment in a “Trembling Hand” Game

An interesting paper from Fiery Cushman, Anna Dreber, Ying Wang, and Jay Costa from the (Department of Psychology at Harvard University, Cambridge, Massachusetts) on PLoS One (here). The results do seem to be intuitively as you might expect. The paper is nevertheless very interesting.
How do people respond to others' accidental behaviors? Reward and punishment for an accident might depend on the actor's intentions, or instead on the unintended outcomes she brings about. Yet, existing paradigms in experimental economics do not include the possibility of accidental monetary allocations. We explore the balance of outcomes and intentions in a two-player economic game where monetary allocations are made with a “trembling hand”: that is, intentions and outcomes are sometimes mismatched. Player 1 allocates $10 between herself and Player 2 by rolling one of three dice. One die has a high probability of a selfish outcome, another has a high probability of a fair outcome, and the third has a high probability of a generous outcome. Based on Player 1's choice of die, Player 2 can infer her intentions. However, any of the three die can yield any of the three possible outcomes. Player 2 is given the opportunity to respond to Player 1's allocation by adding to or subtracting from Player 1's payoff. We find that Player 2's responses are influenced substantially by the accidental outcome of Player 1's roll of the die. Comparison to control conditions suggests that in contexts where the allocation is at least partially under the control of Player 1, Player 2 will punish Player 1 accountable for unintentional negative outcomes. In addition, Player 2's responses are influenced by Player 1's intention. However, Player 2 tends to modulate his responses substantially more for selfish intentions than for generous intentions. This novel economic game provides new insight into the psychological mechanisms underlying social preferences for fairness and retribution.

Citation: Cushman F, Dreber A, Wang Y, Costa J (2009) Accidental Outcomes Guide Punishment in a “Trembling Hand” Game. PLoS ONE 4(8): e6699. doi:10.1371/journal.pone.0006699
The opposite situation also seems to occur. In this setting Player 1 takes a punt at promising an outcome which has a reduced chance of coming true. When the desired outcome occurs, then Player 2 is likely to over-reward Player 1 (even though he/she may have had little influence over the outcome).

Examples of this are seen everywhere around us:
  • Fortune telling
  • Competitive sport coaching
  • Bonus culture in financial institutions.
  • Perceptions of health care including private medicine - 'The best doctor is the last doctor to see the patient' - yet the patient may have recovered for many reasons other than the direct effect of the last doctor.
Posted by ALCHEssMIST.

Saturday, 25 July 2009

Game Theory May Explain How Personalities Evolved In Humans And Other Social Species

Game theory can be used to predict the choices of individuals based on the behaviour of other individuals.

It appears that watching the behaviour of others makes people more socially aware, which in turn exagerates the personality traits of both individuals. This has the impact of making some people more cooperative as they became aware of the effect their decisions are having on their own reputations. On the other hand, some individuals become less cooperative and even actively exploit more trusting individuals. This evolutionary self-perpetuating variation in personalities, begets more variation, so exaggerating the differences between the cooperative trusting and exploitative selfish individuals.

John McNamara, Philip Stephens, Sasha Dall, and Alasdair Houston have recently published evidence for the above in their paper - Evolution of trust and trustworthiness: social awareness favours personality differences - in Proceedings of The Royal Society B (February 2009). They modelled an infinite population of actors playing an asymmetric trust and cooperation game - see diagram - to produce their findings.

Decision tree for the trust and cooperation game
Interest in the evolution and maintenance of personality is burgeoning. Individuals of diverse animal species differ in their aggressiveness, fearfulness, sociability and activity. Strong trade-offs, mutation–selection balance, spatio-temporal fluctuations in selection, frequency dependence and good-genes mate choice are invoked to explain heritable personality variation, yet for continuous behavioural traits, it remains unclear which selective force is likely to maintain distinct polymorphisms. Using a model of trust and cooperation, we show how allowing individuals to monitor each other's cooperative tendencies, at a cost, can select for heritable polymorphisms in trustworthiness. This variation, in turn, favours costly ‘social awareness’ in some individuals. Feedback of this sort can explain the individual differences in trust and trustworthiness so often documented by economists in experimental public goods games across a range of cultures. Our work adds to growing evidence that evolutionary game theorists can no longer afford to ignore the importance of real world inter-individual variation in their models.
The full paper can be downloaded as Full Text (Free) or Full Text (PDF) Free.

doi: 10.1098/rspb.2008.1182 Proc. R. Soc. B 22 February 2009 vol. 276 no. 1657 605-613

Sunday, 19 July 2009

ALCHEssMIST Game Theory Blog

A new blog by ALCHEssMIST about Game Theory.