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Stochastic game
About: Stochastic game is a research topic. Over the lifetime, 9493 publications have been published within this topic receiving 202664 citations.
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TL;DR: In this paper, the authors examine whether the decision to trust a stranger in a one-shot interaction is equivalent to taking a risky bet, or if a trust decision entails an additional risk premium to balance the costs of trust betrayal.
Abstract: Using experiments, we examine whether the decision to trust a stranger in a one-shot interaction is equivalent to taking a risky bet, or if a trust decision entails an additional risk premium to balance the costs of trust betrayal. We compare a binary-choice Trust game with a structurally identical, binary-choice Risky Dictator game with good or bad outcomes. We elicit individuals' minimum acceptable probabilities (MAPs) of getting the good outcome such that they would prefer the chance to the sure payoff. First movers state higher MAPs in the Trust game than in situations where nature determines the outcome.
239 citations
TL;DR: This paper found evidence that the willingness to punish an unfair action is sensitive to whether this action was preceded by a deceptive message and that 17% to 25% of all participants choose to reward a favorable action choice made by the sender, even though doing so leaves one at a payoff disadvantage.
Abstract: This paper presents evidence that the willingness to punish an unfair action is sensitive to whether this action was preceded by a deceptive message. One player first sends a message indicating an intended play, which is either favorable or unfavorable to the other player in the game. After the message, the sender and the receiver play a simultaneous 2 x 2 game, in which the sender may or may not play according to his message. Outcome cells may, hence, be reached following true or false messages. In the third stage, the receiver may (at a cost) punish or reward, depending on which cell of the simultaneous game has been reached. We test whether receivers' rates of monetary sacrifice depend on the process by which an outcome is reached. We study two decision-elicitation methods: the strategy and the direct response methods. For each method, deception more than doubles the punishment rate as a response to an action that is unfavorable to the receiver. We also find evidence that 17--25% of all participants choose to reward a favorable action choice made by the sender, even though doing so leaves one at a payoff disadvantage. Our results reflect on current economic models of utility and have implications for organizational decision-making behavior.
238 citations
TL;DR: The EPI approach provides an understanding of the relationship between measurement and physical law and derives the Lagrangian that implies both the Klein-Gordon equation and the Dirac equation of quantum mechanics.
Abstract: The Lagrangians of physics arise out of a mathematical game between a ``smart'' measurer and nature (personified by a demon). Each contestant wants to maximize his level of Fisher information I. The game is zero sum, by conservation of information in the closed system. The payoff of the game introduces a variational principle---extreme physical information (EPI)---which fixes both the Lagrangian and the physical constant of each scenario. The EPI approach provides an understanding of the relationship between measurement and physical law. EPI also defines a prescription for constructing Lagrangians. The prior knowledge required for this purpose is a rule of symmetry or conservation that implies a unitary transformation for which I remains invariant. As an example, when applied to the smart measurement of the space-time coordinate of a particle, the symmetry used is that between position-time space and momentum-energy space. Then the unitary transformation is the Fourier one, and EPI derives the following: the equivalence of energy, momentum, and mass; the constancy of Planck's parameter h; and the Lagrangian that implies both the Klein-Gordon equation and the Dirac equation of quantum mechanics.
237 citations
TL;DR: The folk theorem for the Prisoner's dilemma is proved using strategies that are robust to private monitoring and a limit folk theorem is followed: when players are patient and monitoring is sufficiently accurate, any feasible individually rational payoff can be obtained in sequential equilibrium.
236 citations
TL;DR: This work introduces three different payoff-based processes for increasingly general scenarios and proves that, after a sufficiently large number of stages, player actions constitute a Nash equilibrium at any stage with arbitrarily high probability.
Abstract: We consider repeated multiplayer games in which players repeatedly and simultaneously choose strategies from a finite set of available strategies according to some strategy adjustment process. We focus on the specific class of weakly acyclic games, which is particularly relevant for multiagent cooperative control problems. A strategy adjustment process determines how players select their strategies at any stage as a function of the information gathered over previous stages. Of particular interest are “payoff-based” processes in which, at any stage, players know only their own actions and (noise corrupted) payoffs from previous stages. In particular, players do not know the actions taken by other players and do not know the structural form of payoff functions. We introduce three different payoff-based processes for increasingly general scenarios and prove that, after a sufficiently large number of stages, player actions constitute a Nash equilibrium at any stage with arbitrarily high probability. We also show how to modify player utility functions through tolls and incentives in so-called congestion games, a special class of weakly acyclic games, to guarantee that a centralized objective can be realized as a Nash equilibrium. We illustrate the methods with a simulation of distributed routing over a network.
235 citations