Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence

Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence

Date:	2014-01
By:	Pietro Battiston Luca Stanca
URL:	http://d.repec.org/n?u=RePEc:mib:wpaper:267&r=net
	This paper investigates opinion dynamics and social influence in directed communication networks. We study the properties of a generalized boundedly rational model of opinion formation in which individuals aggregate the information they receive by using weights that are a function of their neighbors’ indegree. We then present an experiment designed to test the predictions of the model. We find that both Bayesian updating and boundedly rational updating à la DeMarzo et al. (2003) are rejected by the data. Consistent with our theoretical predictions, the social influence of an agent is positively and significantly affected by the number of individuals she listens to. When forming their opinions, agents do take into account the structure of the communication network, although in a sub-optimal way.
Keywords:	Social Networks, Learning, Social In uence, Bounded Rationality
JEL:	D85 D83 A14 L14 Z13

Individual Learning and Cooperation in Noisy Repeated Games

Individual Learning and Cooperation in Noisy Repeated Games

Date:	2013-07-06
By:	Yuichi Yamamoto (Department of Economics, University of Pennsylvania)
URL:	http://d.repec.org/n?u=RePEc:pen:papers:13-038&r=net
	We investigate whether two players in a long-run relationship can maintain cooperation when the details of the underlying game are unknown. Specifically, we consider a new class of repeated games with private monitoring, where an unobservable state of the world influences the payoff functions and/or the monitoring structure. Each player privately learns the state over time but cannot observe what the opponent learned. We show that there are robust equilibria in which players eventually obtain payoffs as if the true state were common knowledge and players played a “belief-free” equilibrium. We also provide explicit equilibrium constructions in various economic examples
Keywords:	repeated game, private monitoring, incomplete information, belief-free equilibrium, ex-post equilibrium, individual learning
JEL:	C72

End Behavior in Sequences of Finite Prisoner’s Dilemma Supergames: A Learning Theory Approach

Reinhard and Selten (1986) “End Behavior in Sequences of Finite Prisoner’s Dilemma Supergames: A Learning Theory Approach." Journal of Economic Behavior & Organization

Volume 7, Issue 1, March 1986, Pages 47–70. http://dx.doi.org/10.1016/0167-2681(86)90021-1. systemsci.org 提供的 [PDF];

Abstract

A learning theory is proposed which models the influence of experience on end behavior in finite Prisoner’s Dilemma supergames. The theory is compared with experimental results. In the experiment 35 subjects participated in 25 Prisoner’s Dilemma supergames of ten periods each against anonymous opponents, changing from supergame to supergame. The typical behavior of experienced subjects involves cooperation until shortly before the end of the supergame. The theory explains shifts in the intended deviation period. On the basis of parameter estimates for each subject derived from the first 20 supergames, successful predictions could be obtained for the last five supergames.

 

Managing Dynamic Competition

Tracy R. Lewis and Huseyin Yildirim (2002) “Managing Dynamic Competition." The American Economic Review, Vol. 92, No. 4 (Sep., 2002) (pp. 779-797). (In JSTOR: Page Scan PDF Summary)

notes by yinung

聽過一種說法: 大廠在向供應商採購時, 會故意隔幾年向另向一個競爭廠下大量訂單, 以讓這些廠商形成具有經濟規模的競爭者… 這一篇看起來好像在講這個故事

Original abstract

In many important high-technology markets, including software development, data processing, communications, aeronautics, and defense, suppliers learn through experience how to provide better service at lower cost. This paper examines how a buyer designs dynamic competition among rival suppliers to exploit learning economies while minimizing the costs of becoming locked in to one producer. Strategies for controlling dynamic competition include the handicapping of more efficient suppliers in procurement competitions, the protection and allocation of intellectual property, and the sharing of information among rival suppliers.

References

• Bergemann, Dirk and Valimaki, Juuso. “Learn- ing and Strategic Pricing." Econometrica, September 1996, 64(5), pp. 1125-5.
• Cabral, Luis M. B. and Riordan, Michael H. “The Learning Curve, Market Dominance, and Predatory Pricing." Econometrica, September 1994, 62(5), pp. 1115-40.
• Demski, Joel S.; Sappington, David E. M. and Spiller, Pablo T. “Managing Supplier Switch- ing." RAND Journal of Economics, Spring 1987, 18(1), pp. 77-97.
• Gruber, Harald. “Learning by Doing and Spillovers: Further Evidence for the Semi- conductor Industry." Review of Industrial Organization, December 1998, 13(6), pp. 697-711.
• Keller, Godfrey and Rady, Sven. “Optimal Ex- perimentation in a Changing Environment." Review of Economic Studies, July 1999, 66(3), pp. 475-507.
• Laffont, Jean J. and Tirole, Jean. “Auctioning Incentive Contracts." Journal of nolitical Economy, October 1987, 95(5), pp. 921-37.
• Laffont, Jean J. and Tirole, Jean. “Repeated Actions of Incentive Con- tracts, Investment, and Bidding Parity with an Application to Takeovers." RAND Journal of Economics, Winter 1988, 19(4), pp. 516- 37.
• Lewis, Tracy R. “Preemption, Divestiture, and Forward Contracting in a Market Dominated by a Single Firm." American Economic Review, December 1983, 73(5), pp. 1092-1101.
• McAfee, Preston R. and McMillan John. “Com- petition for Agency Contracts." RAND Jour- nal of Economics, Summer 1987, 18(2), pp. 296-307.
• Nye, William W. “Firm-Specific Learning by Doing in Semiconductor Production: Some Evidence from the 1986 Trade Agreement." Review of Industrial Organization, June 1996, 11(3), pp. 383-94.
• Spence, Michael A. “The Learning Curve and Competition." Bell Journal of Economics, Spring 1981, 12(1), pp. 49-70.
• Stobaugh, Robert B. and Townsend, Patrick L. “Price Forecasting and Strategic Planning: The Case of Petrochemicals." Journal of Marketing Research, 1975, 12, pp. 19-29.

Items Citing this Item

2 item(s) in JSTOR cite this item

See also: items that cite this item in Google Scholar

• Threat of Exit as a Source of Bargaining Power
  FabianBergès, ClaireChambolle,
   pp. 353-368

  Stable URL: http://www.jstor.org/stable/40724565
• Managing Switching Costs in Multiperiod Procurements with Strategic Buyers
  Tracy R. Lewis and Huseyin Yildirim
  International Economic Review

  Vol. 46, No. 4 (Nov., 2005) pp. 1233-1269

  Stable URL: http://www.jstor.org/stable/3663666

The Limits of Transparency: Pitfalls and Potential of Disclosing Conflicts of Interest

George Loewenstein & Daylian M. Cain & Sunita Sah, (2011) “The Limits of Transparency: Pitfalls and Potential of Disclosing Conflicts of Interest,"
American Economic Review,  vol. 101(3), pages 423-28, May. [link to AER]

Noted by Yi-Nung

這篇提及到 Can and Moore (2005, 2011) 的實驗, 有關利益衝突與揭露 (disclosure of conflicts);

可應用在:

centipede game (揭露/未揭露 first mover 的 payoff)
理專/Broker 揭露/未揭露 commission
Ultimatum game 改成 部份捐款給慈善機構 (或 as a public good), 是否會緩和 fairness 的要求

主要結論: more information, in general, is not very effective in improving decisions…. that disclosure does not replace more effective measures, such as working harder to eliminate conflicts of interest in the first place.

p.424: … the introduction of a subsidy or fine can undermine nonmaterial motives, disclosing a conflict of interest can likewise undermine the advisor’s motivation to adhere to professional standards. … Experimental research suggests that … people feel “licensed" to act immorally in subsequent interactions. Disclosure also introduces a possible rationalization for unethical behavior…"expect" bias.

research on judgment suggests that advisees are likely to “anchor" on the advice they receive and then adjust insufficiently, even though they know the advice may be biased (Tversky and Kahnemen, 1974) (先說先嬴…)

p.424:

…disclosure can lead to an increase rather than a decrease in trust if the disclosure is interpreted as a sign of honesty or if the fact that the advisor is receiving payments is interpreted as in indication of professional standing.

主要的例子:

1. 房地產仲介

2. 醫病諮詢

(p.242) In the absence of disclosure,…, a patient’s rejection of participation in a drug trial would likely be attributed to risk aversion… The same rejection,… might be attributed to the patient’s distrust of the doctor

3. 財務經紀人與顧問

Abstract:

We review evidence from our published and ongoing research that disclosing conflicts of interest has unintended consequences, helping conflicted advisors and harming their advisees: With disclosure, advisors feel comfortable giving more biased advice, but advisees do not properly adjust for this and generally fail to sufficiently discount biased advice. Disclosure also increases pressure on advisees to comply with advice; following disclosure, advisees feel more uncomfortable in turning down advice (e.g., it signals distrust of the advisor’s motives). Finally, we examine the effectiveness of policy interventions aimed at reducing these unintended consequences and discuss how to realize potential benefits of disclosure.