2009
Shapira, Theresa Lant, and Zur.
“Managerial Reasoning About Aspirations And Expectations”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractManagerial reasoning about performance targets and subsequent actions can be influenced by whether they focus their attention on expectations of future events or internal efforts to meet organizational goals. This study explores how managers think about expectations and aspirations by examining the semantic similarities and differences between these concepts for practicing managers and economists, the results suggesting subtle differences in how economists and managers reason about aspirations and expectations. For economists, the concept of expectations played a major role and influenced their subsequent thinking about goals and actions while managers conceptually separated factors that were controllable and uncontrollable, the concept of expectation not playing the central role for them. Implications for descriptive and prescriptive models of decision- making are discussed.
Neyman, Abraham .
“Maximal Variation Of Martingales Of Probabilities And Repeated Games With Incomplete Information, The”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractThe variation of a martingale m[k] of k+1 probability measures p(0),...,p(k) on a finite (or countable) set X is the expectation of the sum of ||p(t)-p(t-1)|| (the L one norm of the martingale differences p(t)-p(t-1)), and is denoted V(m[k]). It is shown that V(m[k]) is less than or equal to the square root of 2kH(p(0)), where H(p) is the entropy function (the some over x in X of p(x)log p(x) and log stands for the natural logarithm). Therefore, if d is the number of elements of X, then V(m[k]) is less than or equal to the square root of 2k(log d). It is shown that the order of magnitude of this bound is tight for d less than or equal to 2 to the power k: there is C>0 such that for every k and d less than or equal to 2 to the power k there is a martingale m[k]=p(0),...,p(k) of probability measures on a set X with d elements, and with variation V(m[k]) that is greater or equal the square root of Ck(log d). It follows that the difference between the value of the k-stage repeated game with incomplete information on one side and with d states, denoted v(k), and the limit of v(k), as k goes to infinity, is bounded by the maximal absolute value of a stage payoff times the square root of 2(log d)/k, and it is shown that the order of magnitude of this bound is tight.
Eyal Winter, Ignacio Garcia-Jurado, Jose Mendez-Naya, and Luciano Mendez-Naya.
“Mental Equilibrium And Rational Emotions”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractWe introduce emotions into an equilibrium notion. In a mental equilibrium each player "selects" an emotional state which determines the player's preferences over the outcomes of the game. These preferences typically differ from the players' material preferences. The emotional states interact to play a Nash equilibrium and in addition each player's emotional state must be a best response (with respect to material preferences) to the emotional states of the others. We discuss the concept behind the definition of mental equilibrium and show that this behavioral equilibrium notion organizes quite well the results of some of the most popular experiments in the experimental economics literature. We shall demonstrate the role of mental equilibrium in incentive mechaisms and will discuss the concept of collective emotions, which is based on the idea that players can coordinate their emotional states.
Parimal Kanti Bag, Hamid Sabourian, and Eyal Winter.
“Multi-Stage Voting, Sequential Elimination And Condorcet Consistency”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractA class of voting procedures based on repeated ballots and elimination of one candidate in each round is shown to always induce an outcome in the top cycle and is thus Condorcet consistent, when voters behave strategically. This is an important class as it covers multi-stage, sequential elimination extensions of all standard one-shot voting rules (with the exception of negative voting), the same one-shot rules that would fail Condorcet consistency. The necessity of repeated ballots and sequential elimination are demonstrated by further showing that Condorcet consistency would fail in all standard voting rules that violate one or both of these conditions.
Zamir, Bezalel Peleg, and Shmuel.
“On Bayesian-Nash Equilibria Satisfying The Condorcet Jury Theorem: The Dependent Case”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractWe investigate sufficient conditions for the existence of Bayesian-Nash equilibria that satisfy the Condorcet Jury Theorem (CJT). In the Bayesian game Gn among n jurors, we allow for arbitrary distribution on the types of jurors. In particular, any kind of dependency is possible. If each juror i has a constant strategy , si (that is, a strategy that is independent of the size n''''¥i of the jury), such that s=( s1, s2, . . . , sn . . .) satisfies theCJT, then byMcLennan (1998) there exists a Bayesian-Nash equilibrium that also satisfies the CJT. We translate the CJT condition on sequences of constant strategies into the following problem: (**) For a given sequence of binary random variables X = (X1, X2, ..., Xn, ...) with joint distribution P, does the distribution P satisfy the asymptotic part of the CJT ? We provide sufficient conditions and two general (distinct) necessary conditions for (**). We give a complete solution to this problem when X is a sequence of exchangeable binary random variables.
Weisel, Gary Bornstein, and Ori, B. “Punishment, Cooperation, And Cheater Detection In”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractExplaining human cooperation in large groups of non-kin is a major challenge to both rational choice theory and the theory of evolution. Recent research suggests that group cooperation can be explained assuming that cooperators can punish non-cooperators or cheaters. The experimental evidence comes from economic games in which group members are informed about the behavior of all others and cheating occurs in full view. We demonstrate that under more realistic information conditions, where cheating is less obvious, punishment is ineffective in enforcing cooperation. Evidently, the explanatory power of punishment is constrained by the visibility of cheating.
Tamar Keasar, Ally R. Harar, Guido Sabatinelli Denis Keith Amots Dafni Ofrit Shavit Assaph Zylbertal, and Avi Shmida.
“Red Anemone Guild Flowers As Focal Places For Mating And Feeding Of Mediterranean Glaphyrid Beetles”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractSeveral species of glaphyrid beetles forage and mate on Mediterranean red flowers. In red anemones and poppies in Israel, female beetles occupy only bowl-shaped a subset of the flowers, do not aggregate, and are hidden below the petals. This raises the question how males find their mates. The possibility that males and females orient to similar plant- generated cues, thereby increasing their mate encounter prospects, was investigated. Beetle attraction to red models increased with display area in previous studies. Choice tests with flowers and with models indicate that both male and female beetles prefer large displays to smaller ones. In anemones, beetles rest, feed and mate mainly on male- phase flowers, which are larger than female- phase flowers. Poppies that contain beetles are larger than the population average. These findings support the hypothesis that males and females meet by orienting to large red displays. Corolla size correlates with pollen reward in both plant species, suggesting that visits to large flowers also yield foraging benefits. Male beetles often jump rapidly among adjacent flowers. In contrast to the preference for large flowers by stationary individuals, these jumps sequences are random with respect to flower (in anemone) and size (in poppy). They may enable males to detect females at sex-phase close range. We hypothesize that males employ a mixed mate- searching strategy, combining orientation to floral signals and to female- produced cues. The glaphyrids' preference for large flowers may have selected for extraordinarily large displays within the "red anemone" pollination guild of the Levant.
Bavli, Hillel .
“Rule-Rationality And The Evolutionary Foundations Of Hyperbolic Discounting”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractRecent studies involving intertemporal choice have prompted many economists to abandon the classical exponential discount utility function in favor of one characterized by hyperbolic discounting. Hyperbolic discounting, however, implies a reversal of preferences over time that is often described as dynamically inconsistent and ultimately irrational. We analyze hyperbolic discounting and its characteristic preference reversal in the context of rule-rationality, an evolutionary approach to rationality that proposes that people do not maximize utility in each of their acts; rather, they adopt rules of behavior that maximize utility in the aggregate, over all decisions to which an adopted rule applies. In this sense, people maximize over rules rather than acts. Rule-rationality provides a framework through which we may examine the rational basis for hyperbolic discounting in fundamental terms, and in terms of its evolutionary foundations. We conclude that although aspects of hyperbolic discounting may contain a certain destructive potential, it is likely that its evolutionary foundations are sound – and its application may well be as justified and rational today as it was for our foraging ancestors.
Samuel-Cahn, Abba M. Krieger, and Ester.
“Secretary Problem Of Minimizing Expected Rank: A Simple Suboptimal Approach With Generalizations, The”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractThe secretary problem for selecting one item so as to minimize its expected rank, based on observing the relative ranks only, is revisited. A simple suboptimal rule, which performs almost as well as the optimal rule, is given. The rule stops with the smallest i such that Ri
Jay Bartroff, Larry Goldstein, Yosef Rinott, and Ester Samuel-Cahn.
“Spend-It-All Region And Small Time Results For The Continuous Bomber Problem, The”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractA problem of optimally allocating partially effective ammunition x to be used on randomly arriving enemies in order to maximize an aircraft's probability of surviving for time t, known as the Bomber Problem, was first posed by Klinger and Brown (1968). They conjectured a set of apparently obvious monotonicity properties of the optimal allocation function K(x,t). Although some of these conjectures, and versions thereof, have been proved or disproved by other authors since then, the remaining central question, that K(x,t) is nondecreasing in x, remains unsettled. After reviewing the problem and summarizing the state of these conjectures, in the setting where x is continuous we prove the existence of a "spend-it-all" region in which K(x,t) = x and find its boundary, inside of which the long-standing, unproven conjecture of monotonicity of K(.,t) holds. A new approach is then taken of directly estimating K(x,t) for small t, providing a complete small-t asymptotic description of K(x,t) and the optimal probability of survival.
Levy, Yehuda (John) .
“Stochastic Games With Information Lag”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractTwo-player zero-sum stochastic games with finite state and action spaces, as well as two-player zero-sum absorbing games with compact metric action spaces, are known to have undiscounted values. We study such games under the assumption that one or both players observe the actions of their opponent after some time-dependent delay. We develop criteria for the rate of growth of the delay such that a player subject to such an information lag can still guarantee himself in the undiscounted game as much as he could have with perfect monitoring. We also demonstrate that the player in the Big Match with the absorbing action subject to information lags which grow too rapidly, according to certain criteria, will not be able to guarantee as much as he could have in the game with perfect monitoring. toring.
Sheshinski, Eytan .
“Uncertain Longevity And Investment In Education”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractIt has been argued that increased life expectancy raises the rate of return on education, causing a rise in the investment in education followed by an increase in lifetime labor supply. Empirical evidence of these relations is rather weak. Building on a lifecycle model with uncertain longevity, this paper shows that increased life expectancy does not suffice to warrant the above hypotheses. We provide assumptions about the change in survival probabilities, specifically about the age dependence of hazard rates, which determine individuals' behavioral response w.r.t. education, work and age of retirement. Comparison is made between the case when individuals have access to a competitive annuity market and the case of no insurance.
Neyman, Abraham .
“Value Of Two-Person Zero-Sum Repeated Games With Incomplete Information And Uncertain Duration, The”.
Discussion Papers 2009. Web.
Publisher's VersionAbstractIt is known that the value of a zero-sum infinitely repeated game with incomplete information on both sides need not exist [Aumann Maschler 95]. It is proved that any number between the minmax and the maxmin of the zero-sum infinitely repeated game with incomplete information on both sides is the value of the long finitely repeated game where players' information about the uncertain number of repetitions is asymmetric.
2008
Ullmann-Margalit, Edna .
“"We The Big Brother" Or The Curious Incident Of The Camera In The Kitchen”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractLast summer, a member of the Rationality Center at the Hebrew University of Jerusalem installed a closed-circuit TV camera in the Center's kitchen. An email explained that the camera was installed in an effort to keep the kitchen clean. By the time the camera was removed, a week later, the members of the Center exchanged close to 120 emails among themselves, expressing their opinions for and against the camera and discussing related issues.Taking off from this exchange, I explore the surprisingly rich set of normative concerns touched upon by the kitchen-camera incident. These include a host of issues regarding people's polarized attitudes toward public surveillance, the problem of the invasive gaze and the argument that "if you have nothing to hide you have nothing to worry," the efficacy of disciplining behavior through sanctions along with the problems related to shaming sanctions, the notion of privacy and its arguable relevance to the kitchen case, and more. Special attention is given to the notion ofcleanness and to its related norms.In an epilogue, I offer some reflections in the wake of the incident. I find that it is precisely the smallness, concreteness and seeming triviality of this incident that helps bring a large set of interconnected, vexing normative concerns into sharper relief.
Zultan, Andriy Zapechelnyuk, and Ro'i.
“Altruism, Partner Choice, And Fixed-Cost Signaling”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractWe consider a multitype population model with unobservable types, in which players are engaged in the `mutual help' game: each player can increase her partner's fitness at a cost to oneself. All individuals prefer free riding to cooperation, but some of them, helpers, can establish reciprocal cooperation in a long-term relationship. Such heterogeneity can drive cooperation through a partner selection mechanism under which helpers choose to interact with one another and shun non-helpers. However, in contrast to the existing literature, we assume that each individual is matched with an anonymous partner, and therefore, stable cooperation cannot be achieved by partner selection per se. We suggest that helpers can signal their type to one another in order to establish long-term relationships, and we show that a reliable signal always exists. Moreover, due to the difference in future benefits of a long-term relationship for helpers and non-helpers, the signal need not be a handicap, in the sense that the cost of the signal need not be correlated with type.
Zamir, Shmuel .
“Bayesian Games: Games With Incomplete Information”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractAn encyclopedia article on games with incomplete information. Table of contents:1. Definition of the subject and its importance2. Introduction: Modeling incomplete information3. Harsanyi s model: The notion of type4. Aumann s model5. Harsanyi s model and the hierarchies of beliefs6. The Universal Belief Space7. Belief subspaces8. Consistent beliefs and Common prior9. Bayesian games and Bayesian equilibrium10. Bayesian equilibrium and Correlated equilibrium11. Concluding remarks and future directions12. Bibliography
Zamir, Bezalel Peleg, and Shmuel.
“Condorcet Jury Theorem: The Dependent Case”.
Discussion Papers 2008. Web.
Publisher's VersionAbstract{We provide an extension of the Condorcet Theorem. Our model includes both the Nitzan-Paroush framework of unequal competencies and Ladha s model of correlated voting by the jurors . We assume that the jurors behave informatively , that is, they do not make a strategic use of their information in voting. Formally, we consider a sequence of binary random variables X = (X1,X2, ...,Xn, ...) with range in 0,1 and a joint probability distribution P. The pair (X,P) is said to satisfy the Condorcet Jury Theorem (CJT) if limn†’ˆ\v zP(ˆ‘Xi>n/2)=1. For a general (dependent) distribution P we provide necessary as well as sufficient conditions for the CJT. Let pi = E(Xi)
Hart, Sergiu, and Andreu Mas-Colell.
“Cooperative Games In Strategic Form”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractIn this paper we view bargaining and cooperation as an interaction superimposed on a strategic form game. A multistage bargaining procedure for N players, the "proposer commitment" procedure, is presented. It is inspired by Nash's two-player variable-threat model; a key feature is the commitment to "threats." We establish links to classical cooperative game theory solutions, such as the Shapley value in the transferable utility case. However, we show that even in standard pure exchange economies the traditional coalitional function may not be adequate when utilities are not transferable.
Kahana, Alon Harel, and Tsvi.
“Easy Core Case For Judicial Review, The”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractThis paper defends judicial review on the grounds that judicial review is necessary for protecting a right to a hearing. Judicial review is praised by its advocates on the basis of instrumentalist reasons, i.e., because of its desirable contingent consequences such as protecting rights, romoting democracy, maintaining stability, etc. We argue that instrumentalist easons for judicial review are bound to fail and that an adequate defense of udicial review requires justifying judicial review on non-instrumentalist grounds. A non-instrumentalist justification grounds judicial review in essential attributes of he judicial process. In searching for a non-instrumental justification we establish that judicial review is designed to protect the right to a hearing. The right to a hearing consists of hree components: the opportunity to voice a grievance, the opportunity to be rovided with a justification for a decision that impinges (or may have impinged) on one s rights and, last, the duty to reconsider the initial decision giving rise to the grievance. The right to a hearing is valued independently of the merit of the decisions generated by the judicial process. We also argue that the recent proposals to reinforce popular or democratic participation in shaping the Constitution are wrong because they are detrimental to the right to a hearing.
Kalai, Gil .
“Economics And Common Sense”.
Discussion Papers 2008. Web.
Publisher's VersionAbstractA review of Steven E. Landsburg's book More Sex is Safer Sex, the Unconventional Wisdom of Economics. The surprise 2005 best seller Freakonomics by Steven Levitt and Stephen Dubner launched a small genre of books by economists applying economic reasoning to everyday life and finding counterintuitive results. Mathematician and economist Steven Landsburg, whose online Slate column ``Everyday Economics predates the Levitt and Dubner volume, has now collected and expanded some of those columns to form the basis of his new book.In his book, Landsburg uses the ``weapons of evidence and logic, especially the logic of economics to draw surprising conclusions which run against common sense. ``If your common sense tells you otherwise, says Landsburg, ``remember that common sense also tells you the Earth is flat. In this review, scheduled to appear in the June/July 2008 issue of the Notices of the American Mathematical Society, we describe and discuss some of the issues and claims raised in Landsburg's book. For further discussion see the May 29 post in
http://gilkalai.wordpress.com/ .