Trust: The Social Virtues and the Creation of Prosperity

Preface 1. Decision-Theoretic Foundations 1.1 Game Theory, Rationality, and Intelligence 1.2 Basic Concepts of Decision Theory 1.3 Axioms 1.4 The Expected-Utility Maximization Theorem 1.5 Equivalent Representations 1.6 Bayesian Conditional-Probability Systems 1.7 Limitations of the Bayesian Model 1.8 Domination 1.9 Proofs of the Domination Theorems Exercises 2. Basic Models 2.1 Games in Extensive Form 2.2 Strategic Form and the Normal Representation 2.3 Equivalence of Strategic-Form Games 2.4 Reduced Normal Representations 2.5 Elimination of Dominated Strategies 2.6 Multiagent Representations 2.7 Common Knowledge 2.8 Bayesian Games 2.9 Modeling Games with Incomplete Information Exercises 3. Equilibria of Strategic-Form Games 3.1 Domination and Ratonalizability 3.2 Nash Equilibrium 3.3 Computing Nash Equilibria 3.4 Significance of Nash Equilibria 3.5 The Focal-Point Effect 3.6 The Decision-Analytic Approach to Games 3.7 Evolution. Resistance. and Risk Dominance 3.8 Two-Person Zero-Sum Games 3.9 Bayesian Equilibria 3.10 Purification of Randomized Strategies in Equilibria 3.11 Auctions 3.12 Proof of Existence of Equilibrium 3.13 Infinite Strategy Sets Exercises 4. Sequential Equilibria of Extensive-Form Games 4.1 Mixed Strategies and Behavioral Strategies 4.2 Equilibria in Behavioral Strategies 4.3 Sequential Rationality at Information States with Positive Probability 4.4 Consistent Beliefs and Sequential Rationality at All Information States 4.5 Computing Sequential Equilibria 4.6 Subgame-Perfect Equilibria 4.7 Games with Perfect Information 4.8 Adding Chance Events with Small Probability 4.9 Forward Induction 4.10 Voting and Binary Agendas 4.11 Technical Proofs Exercises 5. Refinements of Equilibrium in Strategic Form 5.1 Introduction 5.2 Perfect Equilibria 5.3 Existence of Perfect and Sequential Equilibria 5.4 Proper Equilibria 5.5 Persistent Equilibria 5.6 Stable Sets 01 Equilibria 5.7 Generic Properties 5.8 Conclusions Exercises 6. Games with Communication 6.1 Contracts and Correlated Strategies 6.2 Correlated Equilibria 6.3 Bayesian Games with Communication 6.4 Bayesian Collective-Choice Problems and Bayesian Bargaining Problems 6.5 Trading Problems with Linear Utility 6.6 General Participation Constraints for Bayesian Games with Contracts 6.7 Sender-Receiver Games 6.8 Acceptable and Predominant Correlated Equilibria 6.9 Communication in Extensive-Form and Multistage Games Exercises Bibliographic Note 7. Repeated Games 7.1 The Repeated Prisoners Dilemma 7.2 A General Model of Repeated Garnet 7.3 Stationary Equilibria of Repeated Games with Complete State Information and Discounting 7.4 Repeated Games with Standard Information: Examples 7.5 General Feasibility Theorems for Standard Repeated Games 7.6 Finitely Repeated Games and the Role of Initial Doubt 7.7 Imperfect Observability of Moves 7.8 Repeated Wines in Large Decentralized Groups 7.9 Repeated Games with Incomplete Information 7.10 Continuous Time 7.11 Evolutionary Simulation of Repeated Games Exercises 8. Bargaining and Cooperation in Two-Person Games 8.1 Noncooperative Foundations of Cooperative Game Theory 8.2 Two-Person Bargaining Problems and the Nash Bargaining Solution 8.3 Interpersonal Comparisons of Weighted Utility 8.4 Transferable Utility 8.5 Rational Threats 8.6 Other Bargaining Solutions 8.7 An Alternating-Offer Bargaining Game 8.8 An Alternating-Offer Game with Incomplete Information 8.9 A Discrete Alternating-Offer Game 8.10 Renegotiation Exercises 9. Coalitions in Cooperative Games 9.1 Introduction to Coalitional Analysis 9.2 Characteristic Functions with Transferable Utility 9.3 The Core 9.4 The Shapkey Value 9.5 Values with Cooperation Structures 9.6 Other Solution Concepts 9.7 Colational Games with Nontransferable Utility 9.8 Cores without Transferable Utility 9.9 Values without Transferable Utility Exercises Bibliographic Note 10. Cooperation under Uncertainty 10.1 Introduction 10.2 Concepts of Efficiency 10.3 An Example 10.4 Ex Post Inefficiency and Subsequent Oilers 10.5 Computing Incentive-Efficient Mechanisms 10.6 Inscrutability and Durability 10.7 Mechanism Selection by an Informed Principal 10.8 Neutral Bargaining Solutions 10.9 Dynamic Matching Processes with Incomplete Information Exercises Bibliography Index

博弈论 : 矛盾冲突分析 = Game theory : analysis of conflict

NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

In recent years, an explosion of neuroimaging studies has examined cognitive reappraisal, an emotion regulation strategy that involves changing the way one thinks about a stimulus in order to change its affective impact Existing models broadly agree that reappraisal recruits frontal and parietal control regions to modulate emotional responding in the amygdala, but they offer competing visions of how this is accomplished One view holds that control regions engage ventromedial prefrontal cortex (vmPFC), an area associated with fear extinction, that in turn modulates amygdala responses An alternative view is that control regions modulate semantic representations in lateral temporal cortex that indirectly influence emotion-related responses in the amygdala Furthermore, while previous work has emphasized the amygdala, whether reappraisal influences other regions implicated in emotional responding remains unknown To resolve these questions, we performed a meta-analysis of 48 neuroimaging studies of reappraisal, most involving downregulation of negative affect Reappraisal consistently 1) activated cognitive control regions and lateral temporal cortex, but not vmPFC, and 2) modulated the bilateral amygdala, but no other brain regions This suggests that reappraisal involves the use of cognitive control to modulate semantic representations of an emotional stimulus, and these altered representations in turn attenuate activity in the amygdala

/pdf/cognitive-reappraisal-of-emotion-a-meta-analysis-of-human-5dtqxqj6ks.pdf

Cognitive Reappraisal of Emotion: A Meta-Analysis of Human Neuroimaging Studies

which is used to describe a third component of thinking processes, particularly preverbal, and it denotes the concept that the world is activated by some generalized "energy" that links together causally all objects and events ; it is presumably revealed by a person's lack of curiosity about causal connections, as though they were self-evident. Aside from the rather frequent use of such key words, having strong connotations for this reviewer far away from what the author is aiming to denote, the book is written in a lucid and stimulating style that makes reading it an invigorating intellectual exercise. It is a book that is likely to have somewhat limited attraction to the full-time clinician, especially one treating adult patients. And child psychiatrists and psychologists, if reasonably well read, will most likely be familiar with the majority of references from which this author has synthesized his material. On the other hand, the scholarly and refreshing con¬ ceptual approaches of the author will appeal to psychologists, philosophers, linguists, and psychiatrists with a research bent and anyone else who wants to be provoked to do some thinking on the problems of language, language development, and the psychology of cognition. Louis A. GOTTSCHALK, M.D. Plans and the Structure of Behavior. By George A Miller, Eugene gALANTER, and Karl H. Pribram. Price, $5.00. Pp. 226. Henry Holt & Co., Inc., New York 17, 1960. This is an important book for psychiatrists and behavioral scientists, since it presents a clear, concise study of the application of cybernetics, information and computer theory to the problem of analyzing behavior. The authors have been actively engaged in behavioral research in different areas\p=m-\Millerin information and communication, Galanter in experimental psychology, and Pribram in neurophysiology. The book resulted from a series of discussions which they engaged in during a year they spent together at the Center for Advanced Study in the Behavioral Sciences, Palo Alto, Calif. Their original intent was to write a diary, as it were, of the development of their ideas and, fortunately, enough of this remains to make the book clear, easy to read, and interesting. It is also fortunate, however, that in the final writing a variety of studies comparing the "behavior" of computing machines with human "cognitive behavior" have been reviewed and summarized. The result is one of the best presentations of the present status of the brain-computer problem. The authors, however, do not discuss certain aspects of this problem, such as the difference between the brain and its vast number of parallel channels, but few operations, and the modern high-speed computer with its few channels and vast numbers of operations. This omission is consistent with their interest, since it would introduce the question of mechanisms rather than the problem of the structure of behavior as it is observed in everyday life in the clinic and in experiments on learning, conditioning, etc. Similarly, they do not discuss the qualitative differences between mechanisms of memory in the computer and those in the brain. In the former, a "memory"\p=m-\ i.e., stored information\p=m-\isidentified, metaphorically speaking, by an address, whereas no such mechanism is known in the brain (personal communication, Dr. Julian Bigelow). With few exceptions, however, the data, concepts, and theories presented are handled with elegant precision, as illustrated by the discussion of Sherrington's concepts of the "Reflex" and the "Synapse," Kurt Lewin's ideas of "tension states," and the numerous references to the work of Newell, Shaw, and Simon on computers and logic. There are, nevertheless, areas with

https://link.springer.com/content/pdf/10.1057%2Fjors.1968.86.pdf

Plans and the Structure of Behavior

Emotion regulation strategies provide a means by which to modulate our social behavior. In this study, we investigated the effect of using reappraisal to both up- and downregulate social decision making. After being instructed on how to use reappraisal, participants played the Ultimatum Game while undergoing functional magnetic resonance imaging and applied the strategies of upregulation (reappraising the proposer’s intentions as more negative), down-regulation (reappraising the proposer’s intentions as less negative), as well as a baseline ‘‘look’’ condition. As hypothesized, when reappraising, decision acceptance rates were altered, with a greater number of unfair offers accepted while down-regulating and a greater number of unfair offers rejected while upregulating, both relative to the baseline condition. At the neural level, during reappraisal, significant activations were observed in the inferior and middle frontal gyrus (MFG), in addition to the medial prefrontal cortex and cingulate gyrus for unfair offers only. Regulated decisions involved left inferior frontal gyrus for upregulation and MFG for down-regulation strategies, respectively. Importantly, the effects of emotion modulation were evident in posterior insula, with less activation for down-regulation and more activation for upregulation in these areas. Notably, we show for the first time that top-down strategies such as reappraisal strongly affect our socioeconomic decisions.

Reappraising the Ultimatum: an fMRI Study of Emotion Regulation and Decision Making

Previous studies have reported the effect of emotion regulation strategies on both individual and social decision making, however the effect of regulation on socially driven emotions independent of decisions is still unclear. In the present study, we investigated the neural effects of using reappraisal to both up- and down-regulate socially driven emotions. Participants played the Dictator Game in the role of recipient while undergoing fMRI, and concurrently applied the strategies of either up-regulation (reappraising the proposer’s intentions as more negative), down-regulation (reappraising the proposer’s intentions as less negative), as well as a baseline ‘look’ condition. Results showed that regions responding to the implementation of reappraisal (effect of strategy, that is, “regulating regions”) were the inferior and middle frontal gyrus, temporo parietal junction and insula bilaterally. Importantly, the middle frontal gyrus activation correlated with the frequency of regulatory strategies in daily life, with the insula activation correlating with the perceived ability to reappraise the emotions elicited by the social situation. Regions regulated by reappraisal (effect of regulation, that is, “regulated regions”) were the striatum, the posterior cingulate and the insula, showing increased activation for the up-regulation and reduced activation for down-regulation, both compared to the baseline condition. When analyzing the separate effects of partners’ behavior, selfish behavior produced an activation of the insula, not observed when subjects were treated altruistically. Here we show for the first time that interpersonal emotion regulation strategies can strongly affect neural responses when experiencing socially driven emotions. Clinical implications of these findings are also discussed to understand how the way we interpret others’ intentions may affect the way we emotionally react.

/pdf/reappraising-social-emotions-the-role-of-inferior-frontal-3p7931spz3.pdf

Reappraising social emotions: the role of inferior frontal gyrus, temporo-parietal junction and insula in interpersonal emotion regulation.

http://www.princeton.edu/~osherson/papers/katya14.pdf

The conjunction fallacy: a misunderstanding about conjunction?

https://www2.units.it/delmisfa/papers/Inflation2007.pdf

Perceptions and expectations of price changes and inflation : A review and conceptual framework

Affect can have a significant influence on decision-making processes and subsequent choice. One particularly relevant type of negative affect is anxiety, which serves to enhance responses to threatening stimuli or situations. In its exaggerated form, it can lead to psychiatric disorders, with detrimental consequences for quality of life, including the ability to make choices. This study investigated, for the first time, how pathological anxiety affects risk-taking behavior. In this study, 20 anxious participants meeting Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, criteria for either generalized anxiety disorder (n = 10) and for panic attack disorder (n = 10), as well as 20 matched nonanxious controls, performed a gambling task. To investigate the tendency toward either a risk-seeking or a risk-averse behavior, we employed a task that did not allow for learning from outcomes. Anxious participants made significantly fewer risky choices than matched nonanxious participants. Specifically, they become risk-avoidant after gains. Moreover, anxious participants not only were less happy after gains but were also less sad after losses, and they also evinced less desire to change their choices after losses than did nonanxious participants. Importantly, whereas the desire to switch choice was followed by actual choice switch for all participants, happiness directly predicted subsequent risky choices, particularly in the nonanxious participants. Further analyses revealed that the anxious participants' risk-avoidance behavior was independent of different types of anxiety disorder (panic attack disorder and generalized anxiety disorder) as well as of the effects of psychotropic drugs treatment. This study demonstrates a specific role for anxiety in individual decision making. In particular, hypersensitivity to potential threats and pessimistic evaluation of future events reduced risk-taking behavior.

Nicolao Bonini

Papers

Reappraising the Ultimatum: an fMRI Study of Emotion Regulation and Decision Making

Reappraising social emotions: the role of inferior frontal gyrus, temporo-parietal junction and insula in interpersonal emotion regulation.

The conjunction fallacy: a misunderstanding about conjunction?

Perceptions and expectations of price changes and inflation : A review and conceptual framework

Reduced risk-taking behavior as a trait feature of anxiety