Two experiments compared the Centipede game played either by 2 individuals or by 2 (3-person) groups. The 2 competitors alternate in deciding whether to take the larger portion of an increasing (or constant) pile of money, and as soon as one takes  the game ends. Assuming that both sides are concerned only with maximizing their own payoffs (and that this is common knowledge), the game theoretic solution, derived by backward induction, is for the first mover to exit the game at the first decision node. Both experiments found that although neither individuals nor groups fully complied with this solution, groups did exit the game significantly earlier than individuals. The study of experimental games has uncovered many instances in which individuals deviate systematically from the game theoretic solution. This study is in accord with other recent experiments in suggesting that game theory may provide a better description of group behavior.

Inequalities often persist because both the advantaged and the disadvantaged stand to lose from change. Despite the probability of loss, moral indignation can lead the disadvantaged to seek to alter the status quo, by encouraging them to sacrifice their material self-interest for the sake of equality. Experimental research shows that moral indignation, understood as a willingness to suffer in order to punish unfair treatment by others, is widespread. It also indicates that a propensity to apparently self-defeating moral indignation can turn out to promote people's material self-interest, if and because others will anticipate their actions. But potential rebels face collective action problems. Some of these can be reduced through the acts of "indignation entrepreneurs," giving appropriate signals, organizing discussions by like-minded people, and engaging in acts of self-sacrifice. Law is relevant as well. By legitimating moral indignation and dissipating pluralistic ignorance, law can intensify and spread that indignation, thus increasing its expression. Alternatively, law can delegitimate moral indignation, or at least raise the cost of its expression, thus stabilizing a status quo of inequality. But the effects of law are unpredictable, in part because it will have moral authority for some but not for others; here too heterogeneity is an issue both for indignation entrepreneurs and their opponents. Examples are given from a range of areas, including labor-management relations, sexual harassment, civil rights, and domestic violence.

Intergroup conflicts generally involve conflicts of interests within the competing groups as well. This paper outlines a taxonomy of games, called team games, which incorporate the intragroup and intergroup levels of conflict. Its aims are to provide a coherent framework for analyzing the prototypical problems of cooperation and competition that arise within and between groups, and to review an extensive research program which has utilized this framework to study individual and group behavior in the laboratory. Depending on the game's payoff structure, contradictions or conflicts were created between the rational choices at the individual, group, and collective levels – a generalization of the contradiction between individual and collective rationality occurring in the traditional mixed-motive games. These contradictions were studied so as to identify the theoretical and behavioral conditions that determine which level of rationality prevails.

With cheap talk, more can be achieved by long conversations than by a single message - even when one side is strictly better informed than the other.

We show in a general setup that if data Y are grouped by a covariate X in a certain way, then under a condition of monotone regression of Y on X, a Simpson s type paradox is natural rather than surprising. This model was motivated by an observation on recent SAT data which are presented.

A stationary renewal process based on iid random variables Xi is observed at a given time. The excess time, that is, the residual time until the next renewal event, is of course smaller than the total current X which consists of the residual time plus the current age. Nevertheless in certain types of data the distribution of the excess times is stochastically larger than that of Xi's. We find necessary and sufficient conditions that explain this phenomenon, and related results on stochastic orderings arising from observations on renewal processes.

We establish the existence of pure strategy equilibria in monotone bidding functions in first-price auctions with asymmetric bidders, interdependent values and affiliated one-dimensional signals. By extending a monotonicity result due to Milgrom and Weber (1982), we show that single crossing can fail only when ties occur at winning bids or when bids are individually irrational. We avoid these problems by considering limits of ever finer finite bid sets such that no two bidders have a common serious bid, and by recalling that single crossing is needed only at individually rational bids. Two examples suggest that our results cannot be extended to multidimensional signals or to second-price auctions.

Ever since the days of Francis Bacon it has been claimed that people perceive the world as less variable and more regular than it actually is. Such misperception, if shown to exist, could explain a host of perplexing behaviors. However, the only evidence supporting the claim is indirect, and there is no explanation of its cause. As a possible cause, we suggest the use of sample variability as an estimate of population variability. This is so since the sampling distribution of sample variance is downward attenuated, the attenuation being substantial for sample sizes that people are likely to consider. The results of five experiments show that people use sample variability, uncorrected for sample size, in tasks in which a correction is normatively called for, and indeed perceive variability as smaller than it actually is.

Extending earlier work of Chichilnisky and Heal, we show that any connected space of the homotopy type of a finite complex admitting a continuous symmetric choice function respeting unanimity is contractible for any fixed finite number (>1) of agents. On the other hand, removing the finiteness condition on the homotopy type, we show that there are a number of non-contractible spaces that do admit such choice functions, for any number of agents, and, characterize precisely those spaces.

The parental investment conflict considers the question of how much each sex should invest in each brood, thereby characterizing different animal groups. Each such group usually adopts a certain parental care pattern: female-care only, male-care only, biparental care, or even no parental care at all. The differences in care patterns are usually explained by the different costs and benefits arising from caring for the offspring in each animal group. This paper proposes a game-theoretical model to the parental investment conflict based on the parental behavior in Cichlid fish. Cichlid fish exhibit different parental care patterns, allowing the examination of the factors which determine the particular behavior in each mating. We present a continuous time, two-stage, asymmetric game, with two types of players: male and female. According to the model s results, three parental care patterns: male-only care, female-only care and biparental care, are possible Evolutionarily Stable Strategies. Fixation depends on the investment costs and benefits, and on the initial conditions of the game. These results may explain the different parental care patterns observed in di erent animal groups as well as in Cichlid fish.

We exhibit a general class of interactive decision situations in which all the agents benefit from more information. This class includes as a special case the classical comparison of statistical experiments   la Blackwell.More specifically, we consider pairs consisting of a game with incomplete information G and an information structure S such that the extended game “(G,S) has a unique Pareto payoff profile u. We prove that u is a Nash payoff profile of “(G,S), and that for any information structure that is coarser than S, all Nash payoff profiles of “(G,T) are dominated by u. We then prove that our condition is also necessary in the following sense: Given any convex compact polyhedron of payoff profiles, whose Pareto frontier is not a singleton, there exists an extended game “(G,S) with that polyhedron as the convex hull of feasible payoffs, an information structure T coarser than S and a player i who strictly prefers a Nash equilibrium in “(G,T) to any Nash equilibrium in “(G,S).

We conducted an experimental study of price competition in a duopolistic market. The market was operationalized as a repeated game between two teams  with one, two, or three players in each team. Each player simultaneously demanded a price, and the team whose total asking price was smaller won the competition and was paid its asked price. The losing team was paid nothing. In case of a tie, the teams split the asking price. For teams with multiple players we manipulated the way in which the team s profit was divided between the team members. In one treatment each team member was paid his or her asking price if the team won, and half that if the game was tied, while in the other treatment the team s profit for winning or tying the game was divided equally among its members. We found that asking (and winning) prices were significantly higher in competition between individuals than in competition between two- or three-person teams. There were no general effects of team size, but prices were sustained at a higher level when each team member was paid his or her own asked price than when the team s profits were divided equally.

Evidence is adduced that the sages of the ancient Babylonian Talmud, as well as some of the medieval commentators thereon, were well aware of sophisticated concepts of modern theories of risk-bearing.

Polygraph test results are by and large ruled inadmissible evidence in criminal courts in the US, Canada and Israel. This is well-conceived with regard to the dominant technique of polygraph interrogation, known as the Control Question Technique (CQT), because it indeed does not meet the required standards for admissible scientific evidence. However, a lesser known and rarely practiced technique, known as the Guilty Knowledge Test (GKT), is capable, if carefully administered, of meeting the recently set Daubert criteria. This article describes the technique, and argues for considering its admissibility as evidence in criminal courts.

The paper aims to establish the possibility of trust from within a Hobbesian framework. It shows that distrust situations can be structured in two ways, the first referred to as Hard and the second as Soft, both of which are compatible with Hobbes s stark assumptions about human nature. In Hard distrust situations (which are prisoner s-dilemma structured) the distrust strategy is dominant; in the Soft variety (which are stag-hunt structured) trust is an equilibrium choice. In order to establish the possibility of trust there is no need to claim that the state of nature is Soft rather than Hard, nor even that Soft is likelier. Game theoretical considerations show that all that is needed to give trust a chance is the ambiguity or uncertainty on the part of the players as to which of the two basic situations of distrust in fact obtains: which game was picked by Nature for them to play.

Let Xn, . . . ,X1 be i.i.d. random variables with distribution function F. A statistician, knowing F, observes the X values sequentially and is given two chances to choose X s using stopping rules. The statistician s goal is to stop at a value of X as small as possible. Let V2n equal the expectation of the smaller of the two values chosen by the statistician when proceeding optimally. We obtain the asymptotic behavior of the sequence V2n for a large class of F s belonging to the domain of attraction (for the minimum) D(G'$\pm$), where G'$\pm$(x) = [1 'ˆ’ exp('ˆ’x'$\pm$)] I(x'¥0). The results are compared with those for the asymptotic behavior of the classical one choice value sequence V1n ,as well as with the 'prophet value  sequence E(minXn, . . . ,X1).

We call a dynamical system uncoupled if the dynamic for each player does not depend on the payoffs of the other players. We show that there are no uncoupled dynamics that are guaranteed to converge to Nash equilibrium, even when the Nash equilibrium is unique.

In Book III of his Treatise of Human Nature, David Hume considers the following simple interaction: "I suppose a person to have lent me a sum of money, on condition that it be restor'd in a few days, and also suppose, that after the expiration of the term agreed on, he demands the sum" and Hume asks: "What reason or motive have I to restore the money?" [1740, p. 479] The answer, he concludes, must be "that the sense of justice and injustice [which is the motive for repaying the loan] is not deriv'd from nature, but arises artificially, tho' necessarily, from education and human conventions." [p. 483] It is my purpose in this essay to offer formal (and modern) underpinnings for Hume's argument. I shall do so in the context of Hume's own example, cited above, where the interaction being considered is one between lender and borrower.

As shown by Peleg, the core of market games is characterized by nonemptiness, individual rationality, superadditivity, the weak reduced game property, the converse reduced game property, and weak symmetry. It was not known whether weak symmetry was logically independent. With the help of a certain transitive 4-person TU game it is shown that weak symmetry is redundant in this result. Hence the core on market games is axiomatized by the remaining five properties, if the universe of players contains at least four members.