Game Theory I

Human decision-makers show various cognitive limitations in terms of “bounded rationality” [1]. Among these limitations is that decision-makers usually do not know the entire solution space in advance but have to search stepwise for new options in the hope to identify superior solutions. For capturing this kind of search behavior and to represent experiential learning, models in the domains of economics and managerial science often employ greedy algorithms and, in particular, hill-climbing algorithms [2].

Upon starting a collective endeavor, it is important to understand your partners' preferences and how strongly they commit to a common goal. Establishing a prior commitment or agreement in terms of posterior benefits and consequences from those engaging in it provides an important mechanism for securing cooperation. Resorting to methods from Evolutionary Game Theory (EGT), here we analyze how prior commitments can also be adopted as a tool for enhancing coordination when its outcomes exhibit an asymmetric payoff structure, in both pairwise and multiparty interactions.

Risk sensibility is a phenomenon that appears in different field like psychology, economics and biology. Although diverse in several features, all these disciplines assume that risk-sensible individuals take decision characterized by different level of caution under conditions of uncertainty. This feature could emerge from an evolutionary process in certain circumstances. Nevertheless, there is a lack of studies about the effect of the environmental characteristics on the evolutionary emergence of risk-sensible behaviour in a population.

Direct reciprocity is one of the key mechanisms accounting for cooperation in our social life. According to recent understanding, most of classical strategies for direct reciprocity fall into one of two classes, ‘partners’ or ‘rivals’. A ‘partner’ is a generous strategy achieving mutual cooperation, and a ‘rival’ never lets the co-player become better off. They have different working conditions: For example, partners show good performance in a large population, whereas rivals do in head-to-head matches.