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We investigate the effect of investors' pro-sustainable beliefs – the beliefs about other investors' pro-sustainable preferences – on sustainable investing. Using an incentive-compatible coordination game that incorporates important aspects of a stock market, we elicit investors' pro-sustainable beliefs. We find that, first, investors with pro-sustainable beliefs invest in sustainable assets, even when controlling for investors' pro-sustainable preferences. Second, investors with pro-sustainable preferences invest more in assets with positive sustainability performance than in assets with negative sustainability performance, a result we do not obtain for investors with pro-sustainable beliefs. This finding underscores the complementary relation and importance of pro-sustainable preferences and beliefs for sustainable investing. • Pro-sustainable beliefs affect investment decisions. • We conduct a non-cooperative coordination game to reveal beliefs. • The effect of beliefs on investments is not sensitive to sustainability performance. • Investors' preferences and beliefs are complements, not substitutes. [ABSTRACT FROM AUTHOR]

In a recent article in this journal, Duijf claims to have proved that team reasoning can be viewed as a payoff transformation. His formalization mimics team reasoning but ignores its essential agency switch. The possibility of such a payoff transformation was never in doubt, does not imply that team reasoning can be viewed as a payoff transformation, and makes no sense in a game in which payoffs represent players' utilities. A theorem is proved here that a simpler and more intuitive payoff transformation can mimic any theory that predicts what strategies players will choose in a well-defined game. [ABSTRACT FROM AUTHOR]

This paper introduces the concept of institutional resilience based on a population game. Agents in an economy are randomly matched to play a coordination game with two strategies, cooperate and defect. A breach of contract can be adjudicated in court. Agents can update their strategy, which is modelled using the replicator dynamic. In this context, cooperation is defined as the informal institution, whereas the legal system (contract law) constitutes the formal institution. Institutional resilience is defined by how the formal institution of a functioning legal system complements the informal institution of cooperation in a dynamic way. In the wake of an adverse exogenous shock, the formal institution can prevent a total breakdown of cooperation in the population. [ABSTRACT FROM AUTHOR]

This study extends existing formulae of the fixation probabilities of strategies for symmetric games and bimatrix games in finite populations and derives a counterpart for trimatrix games. This allows us to describe the stochastic evolutionary game dynamics when three players are assigned different roles and therefore are not interchangeable. Following previous studies, we also derived two types of stochastic stability conditions based on the obtained fixation probabilities; "strong stochastic stability," which requires that for any initial frequencies of strategies, the fixation probability of a combination of specific strategies is higher than that under neutrality and those of any other combinations are lower than neutrality; and "stochastic stability," which only requires that the fixation probability of a specific strategy combination be higher than that under neutrality for any initial frequencies of strategies. Thus, for the former, we obtain a clear correspondence with bimatrix games, but not necessarily for the latter. The results of applying our findings to triadic conflicts (the Impartial person and mediator game and the Fish in troubled waters game), the volunteer's dilemma, and coordination games are also reported. [ABSTRACT FROM AUTHOR]

This article presents a model where the managers of two firms decide about adopting a sustainable production technology (or product). It demonstrates under what conditions a firm experiences a first mover disadvantage from going green, which may potentially be overcome by a sustainability agreement serving as a device for equilibrium selection in a coordination game with multiple equilibria. If the technology adoption game is, however, a prisoner's dilemma, the sustainability agreement must be structured like a hardcore cartel. [ABSTRACT FROM AUTHOR]

New ideas and technologies adopted by a small number of individuals occasionally spread globally through a complex web of social ties. Here, we present a simple and general approximation method, namely, a message-passing approach, that allows us to describe the diffusion processes on (sparse) random networks in an almost exact manner. We consider two classes of binary-action games where the best pure strategies for individual players are characterized as variants of the threshold rule. We verify that the dynamics of diffusion observed on synthetic networks are accurately replicated by the message-passing equation, whose fixed point corresponds to a Nash equilibrium, while the conventional mean-field method tends to overestimate the size and frequency of diffusion. Generalized cascade conditions under which a global diffusion can occur are also provided. We extend the framework to analyze multiplex networks in which social interactions take place in multiple layers. [ABSTRACT FROM AUTHOR]

It is a well-established property that more precise private information leads to lower non-fundamental volatility in a coordination economy with dispersed information. In this note, we identify conditions under which such an argument holds or does not hold. In particular, we show that the opposite relationship holds when (1) there is a strong positive correlation between private information of different agents and (2) public information is endogenously generated. [ABSTRACT FROM AUTHOR]

The fundamental monetary innovation embedded into cryptocurrencies is accounting coordination. Decentralized management of digital money's accounting by a network of computers is achieved as a Nash equilibrium of a coordination game among the network's nodes: the so called miners. Equilibrium analysis demands allowing miners to secretly update their accounting, i.e., to privately build multiple blocks of transactions and to deviate from the longest chain rule. We formalize such reasoning by proposing an accounting coordination game inspired on the Bitcoin design. In particular, by proposing a model that explicitly tells apart mining costs related to energy consumption from those related to computational capacity, we are able to study how symmetric equilibrium existence depends on well known parameters, like the average time for updating accounting records and the rewards collected from mining (accounting) activities. It is shown that the (off-equilibrium) possibility of double spending makes the attractiveness of the equilibrium strategy a decreasing function of the average time for updating accounting records. • Cryptocurrencies' fundamental innovation is accounting coordination. • Decentralized digital money management is a Nash equilibrium game among miners. • Model separates energy consumption and computational capacity mining costs. • Double spending possibility makes equilibrium strategy less attractive. • Equilibrium existence depends on time for accounting records and mining rewards. [ABSTRACT FROM AUTHOR]

We construct a game‐theoretic model in which there are multiple countries with their own languages and each citizen can gain from additional communication in her secondarily acquired language. We demonstrate that in any equilibrium, a hegemonic language, which is a language that all citizens in other countries want to study, emerges. Such an equilibrium is more likely to exist if the size of the population of a country that is not the largest increases, or if the ratio of the gain from the additional communication in the second language to the cost of acquisition increases. [ABSTRACT FROM AUTHOR]

This research proposes a periodic review multi-item two-layer inventory model. The main contribution is a novel approach to determine the can-order threshold in a two-layer model under time-dependent and uncertain demand and setup costs. The first layer consists of a learning mechanism to forecast demand and forecast setup costs. The second layer involves the coordinated replenishment of items, which is analysed as a Bayesian game with uncertain prior probability distribution. The research builds on the concept of the (S, c, s) policy, which is extended to the case of uncertain and time-dependent parameters. [ABSTRACT FROM AUTHOR]

Despite having interesting results of analyzing the adoption of e-commerce using social networks, diffusion does not occur in a single-layered network. There is sufficient evidence that game theory, complex networks and Theory of Planned Behavior are suitable frameworks to represent some part of the dynamics of innovation diffusion. However, it is necessary to integrate this methodological triplet to accept that an emergent behavior is generated by more real causes. We analyzed the effect of the multiplex topology when people decide to make transactions through virtual or physical channels, and found that connectivity is a key issue when managing the agent's behavior. This also translates into greater coordination in the agents' decisions. When a multiplex is formed by at least one network with very efficient information flow, this network will govern the dynamics affecting channel selection and will also reduce transaction uncertainty. In addition, we found that investing in connectivity is worthwhile when trust is low in at least one channel; otherwise, it does not have enough impact to increase current transactions. This article makes a significant methodological contribution by showing a new way to analyze the impact of multiplex social networks, as well as a practical contribution by evidencing the effects of the structures on both intentions and actions. [ABSTRACT FROM AUTHOR]

Trying to preserve cultural forms as faithfully as possible is a key motivation for cultural transmission. This paper reviews two possible accounts of it. One, evolutionary conservatism, is premised on the superiority of accumulated cultural knowledge compared to individual judgement – a theme that runs strongly through both the cultural evolution literature and conservative political philosophy. I argue for a clear distinction between evolutionary conservatism, and status quo conservatism as motivated by loss- and risk-aversion. I proceed to tackle some outstanding issues regarding status quo conservatism: its association with attachment to social hierarchies; the kind of cultural practices that tend to elicit it; and the question why an attitude motivated by considerations of costs and benefits might be manifested as a rigid or absolute principle. Seeing some cultural practices as equilibria in a coordination game helps answer these questions. [ABSTRACT FROM AUTHOR]

In recent decades, there has been a revival of contentious social movements worldwide. Given the collective action problem, what factors motivate ordinary citizens to join protests? If the issue of a protest matters, what factors motivate people to weigh different issues differently? This paper devises a unified theory of collective action and argues that individuals are more likely to join a protest when they perceive higher values of the public good, higher expressive benefits, higher expected turnouts, and lower costs of participation. It contends that the effects of those factors are moderated by individuals’ post-materialist values and confidence in future personal freedom. Employing an online conjoint survey experiment to analyze protest participation among citizens in Hong Kong, this paper finds that protesters are more driven by liberal-democratic issues than socioeconomic issues. The findings highlight the mechanisms through which political beliefs increase protest participation. Political beliefs change the effects of public goods associated with certain issues, and to some extent alter the cost-benefit calculations of potential protesters. [ABSTRACT FROM AUTHOR]

We analyze the problem of international responsibility sharing for a refugee group seeking protection from the dangers of mass violence arising from inter-state conflict or the collapse of a fragile state. After reviewing several proposed solutions, we characterize responsibility sharing as a coordination problem in a simple sequential "moves" game between two potential host countries. We demonstrate that, ultimately, the country that makes the first move to receive refugees bears a disproportionate responsibility. We then draw on two historical case studies that illustrate the difficulties of coordinating a fair division of refugee responsibilities. To solve the coordination problem, we adapt a fair division procedure by inverting one first presented by Hugo Steinhaus for dividing "goods." We demonstrate that the procedure is applicable to costly "obligations" under different scenarios and is manipulation proof, as each participating country has an obviously dominant strategy. [ABSTRACT FROM AUTHOR]

We experimentally investigated whether continuous-time cheap talk improves the effort level in a minimal effort game with multiple Pareto-ranked Nash equilibria. In each round of the game, a player freely changes the message before he or she makes decisions, and constantly monitors other members' messages. We have two results. First, continuous-time cheap talk realizes a higher effort level than does one-shot cheap talk. Second, the group in which every member chooses the maximum effort in the first two rounds eventually achieves an efficient outcome. [ABSTRACT FROM AUTHOR]

Many social exchanges produce benefits that would not exist otherwise, but anticipating conflicts about how to distribute these benefits can derail exchange and destroy the gains. Coordination norms can solve this problem by providing a shared understanding of how to distribute benefits, but such norms can also perpetuate group-level inequality. To examine how inequitable norms evolve culturally and whether they generalize from one setting to another, we conducted an incentivized lab-in-the-field experiment among kindergarten (5–6) and second-grade (8–9) children living in Switzerland (4′228 decisions collected from 326 children). In Part 1, we created two arbitrarily marked groups, triangles and circles. We randomly and repeatedly formed pairs with one triangle and one circle, and players in a pair played a simple bargaining game in which failure to agree destroyed the gains from social exchange. At the beginning of Part 1 we suggested a specific way to play the game. In symmetric treatments, this suggestion did not imply inequality between the groups, while in asymmetric treatments it did. Part 2 of the experiment addressed the generalization of norms. Retaining their group affiliations from Part 1, each child had to distribute resources between an in-group member and an out-group member. Children of both age groups in symmetric treatments used our suggestions about how to play the game to coordinate in Part 1. In asymmetric treatments, children followed our suggestions less consistently, which reduced coordination but moderated inequality. In Part 2, older children did not generalize privilege from Part 1. Rather, they compensated the underprivileged. Younger children neither generalized privilege nor compensated the underprivileged. [ABSTRACT FROM AUTHOR]

A platform might have the potential to bring enormous value to its users. However, without a well-orchestrated launch strategy that coordinates a sufficient number of users onto the platform, this potential will not be realized. The theoretical literature predicts that one approach to coordinating platform take-off is to influence the market's subjective focal expectations of the future installed base of users. This paper reports on a field experiment investigating the causal role of subjective expectations in the launch of a new platform venture, in which invitations to join a newly launched platform were sent to 16,349 individuals. The invitations included randomized statements regarding the size of the future expected installed base (along with disclosures of the current installed base). I find that simple, subjective, uncommitted, and relatively costless statements broadcasted by the platform with the goal of influencing market expectations were indeed able to influence platform takeoff and overcome an initial chicken-and-egg problem. These broadcasted subjective statements regarding future installed base had a larger influence on adoption rates than did disclosures of the true current installed base during early adoption. However, these subjective statements of expected future installed base ceased to have any effect once the true current installed base grew large. I discuss implications for the promotion, marketing, and evangelism of new platform ventures. This paper was accepted by Duncan Simester, marketing. [ABSTRACT FROM AUTHOR]

• Common ground is typically defined as what people know together (common knowledge). • It should also include what they do not know together (common ignorance). • We tested children's ability to use four common knowledge/ignorance states. • 4- to 8-year-olds played a novel coordination game with a partner. • The common ignorance states were more difficult than the common knowledge states. Common ground is the knowledge, beliefs, and suppositions shared between partners in an interaction. Previous research has focused extensively on what partners know they know together, that is, "common knowledge." However, another important aspect of common ground is what partners know they do not know together, that is, "common ignorance." A new coordination game was designed to investigate children's use of common ignorance. Without communicating or seeing each other's decisions, 4- to 8-year-olds needed to make the same decision as their partner about whether to try to retrieve a reward. To retrieve it, at least one of them needed to know a secret code. The knowledge/ignorance of both partners was ostensively manipulated by showing one partner, both partners, or neither partner the secret code in four conditions: common knowledge (both knew the code), common ignorance (neither partner knew the code), common privileged self knowledge (only children knew the code), and common privileged other knowledge (only their partner knew the code). Children's decisions, latency, and uncertainty were coded. Results showed that the common ignorance states were generally more difficult than the common knowledge states. Unexpectedly, children at all ages had difficulty with coordinating when their partner knew the code but they themselves did not (common privileged other knowledge). This study shows that, along with common knowledge, common ignorance and common privileged self knowledge and other knowledge also play important roles in coordinating with others but may develop differently. [ABSTRACT FROM AUTHOR]

In intelligent transportation systems, vehicular ad-hoc network (VANET) is an important technique for data exchange among vehicles and other mobile terminals (MTs) on the roads. In VANET, radio frequency (RF) and visible light communication (VLC) links could cooperate to improve the communication quality of MTs. However, in order to fully exploit the benefits of these two kinds of communication links and improve the VANET performance, a topology control (TC) scheme should be developed to help MTs establish VLC and RF links with their neighbors properly based on the distribution of MTs in the VANET. Since there is usually not a central controller in the VANET, the TC scheme should be conducted locally at each MT. As the size of VANET increases, distributed TC becomes more challenging since MTs usually need to make decisions with only local knowledge about the VANET. In addition, the frequent changes of VANET structure due to MT movements require that the TC scheme can adapt to the dynamic changes quickly. In consideration of those challenges, an adaptive TC scheme is proposed in this paper, aiming to achieve a balance between connectivity and power consumption for MTs in the hybrid VLC/RF VANET. In the proposed TC scheme, MTs can adjust their related links locally and iteratively based on merely its knowledge about the local VANET topology. Moreover, the TC problem is modelled by the coordination game, which guarantees that the proposed TC scheme can converge to a Nash Equilibrium state and can also adapt to the changes in VANET structure dynamically. [ABSTRACT FROM AUTHOR]

With the advent of 4G LTE networks, the demand for bandwidth has rapidly increased among users of mobile devices, especially handheld smartphones. Consequently, the 4G data plans offered by mobile network operators have become expensive in many countries around the world. Moreover, due to the discrete tiers of the data plans, users often experience shortage or surplus. In order to facilitate sharing of bandwidth among users, we propose a game theoretic framework where users share bandwidth with each other. The sharing mechanism is based on the distribution of surplus bandwidth of some users to overcome the shortage of others. All users sometimes serve as providers (i.e., offering bandwidth to others) and sometimes as receivers (i.e., receiving bandwidth from the providers), thus constituting a user-provided network (UPN). The sharing game is designed in such a way that those receiving bandwidth are obligated to offer the same to others at a later point of time. Unused bandwidth of a user is shared to other users who require bandwidth at that instance, who must return the bandwidth that they use to the provider of the bandwidth at a later time based on requirement, by a coordination-based model of user interaction in the UPN that consists of these entities. Further, we have developed a coordination-based game model to better simulate user interaction in this context. In order to validate the proposed framework, we conducted simulations experiments as well as conducted experiments with handheld devices where bandwidth from a 4G LTE commercial network provider was shared among the devices. Results reveal that a Nash Equilibrium is reached for the overall set of interactions between users sharing and receiving bandwidth, provided that a Nash Equilibrium is reached in the interactions between each pair of users. [ABSTRACT FROM AUTHOR]

In the paper, we consider a cooperative version of a network game with pairwise interactions in which connected players play bimatrix games. For a particular type of a network, a simplified formula for the Shapley value based on a constructed characteristic function is derived. We then show the time inconsistency of classical cooperative solutions — the Shapley value and the core. The findings are applied to two important classes of bimatrix games: prisoner's dilemma and a coordination game. [ABSTRACT FROM AUTHOR]

The paper studies a noncooperative repeated game describing the behavior of mobile agents with directional antennas or a wireless sensor network. Periodically, agents must direct antennas towards each other to exchange information. However, the actions required to turn the antenna are energy consuming, and a balance must be maintained between the information relevance and the energy consumed to maintain this relevance. Agents receive smaller payoff at the stage in which they decide to exchange information, but win in subsequent stage by increasing the relevance of information. [ABSTRACT FROM AUTHOR]

Influence analysis is the basic technology for predicting potentially hazardous behavior and determining the traceability of the hazardous behavior in the public security domain. Previous research has focused on maximizing the diffusion of the influence; however, little research has been performed on the method of minimizing the influence of negative information dissemination in networks. This paper proposes an influence minimization algorithm based on coordinated game. When the negative information is generated in the network and some initial nodes have been infected, the goal is to minimize the number of the final infected nodes by discovering and blocking the K uninfected nodes. First, the algorithm assumes that the behavior of the node propagating information depends on the coordination game with its neighboring nodes. Second, based on the local interaction model between the nodes, this paper quantifies the level of the influence of a node that is affected by its neighbors. Finally, the heuristic algorithm is used to identify the approximate optimal solution. The results of experiments performed on four real network datasets show that the proposed algorithm can suppress negative information diffusion better than the five considered existing algorithms.

This paper studies the identification of players' preferences and beliefs in discrete choice games using experimental data. The experiment comprises a set of games that differ in their matrices of monetary payoffs. The researcher is interested in the identification of preferences (utility of money) and beliefs on the opponents' expected behavior, without imposing equilibrium restrictions or parametric assumptions on utility and belief functions. We show that the hypothesis of unbiased/rational beliefs is testable as long as the set of games in the experiment imply variation in monetary payoffs of other players, keeping the own monetary payoff constant. We present conditions for the full identification of utility and belief functions at the individual level – without restrictions on players' heterogeneity in preferences or beliefs. We apply our method to data from two experiments: a matching pennies game, and a public good game. [ABSTRACT FROM AUTHOR]

• Results are reported for an experiment investigating the effects of pre-play communication in a battle-of-the-sexes game. • Players have incomplete information about the intensity of their preferences for different outcomes. • Pre-play communication significantly increases payoffs and the probability of coordination. • When players send different messages they generally coordinate, and communication becomes more informative as the cost of miscoordination increases. The effects of pre-play communication in a battle-of-the-sexes game with incomplete information regarding players' intensity of preferences is compared to the game with no communication. Pre-play communication significantly increases payoffs and the probability of coordination, while reducing miscoordination. Communication is largely informative. A key prediction of the theory, that when two players send different messages, they coordinate on the preferred action of the agent sending the higher message, is generally satisfied. As predicted, communication becomes more informative as the cost of miscoordination increases. [ABSTRACT FROM AUTHOR]

Many sociological theories make critically different macropredictions when their microassumptions are implemented stochastically rather than deterministically. Deviations from individuals' behavioral patterns described by microtheories can spark cascades that change macrooutcomes, even when deviations are rare and random. With two experiments, we empirically tested whether macrophenomena can be critically shaped by random deviations. Ninety-six percent of participants' decisions were in line with a deterministic theory of bounded rationality. Despite this impressive microlevel accuracy, the deterministic model failed to predict the observed macrooutcomes. However, a stochastic version of the same microtheory largely improved macropredictions. The stochastic model also correctly predicted the conditions under which deviations mattered. Results also supported the hypothesis that nonrandom deviations can result in fundamentally different macrooutcomes than random deviations. In conclusion, we echo the warning that deterministic microtheories can be misleading. Our findings show that taking into account deviations in sociological theories can improve explanations and predictions. [ABSTRACT FROM AUTHOR]

• We analyze the effect of social preferences in a coordination game with Pareto-ranked equilibria. • We find that more inequality unambiguously yields a higher level of coordination success. • This result holds even for subjects whose payoffs remain unchanged. • Total payoff motivations seem to drive the positive relationship between inequality and coordination success. • Our data highlight that the order of treatment matters. In this paper, we use a laboratory experiment to analyze the effect of social preferences in a coordination game with Pareto-ranked equilibria. Inequality is increased by increasing the coordination payoffs of some subjects while the coordination payoffs of others remain unchanged. Theoretically, in this setting, inequality aversion may lead to a negative relationship between inequality and coordination success, while total payoff motivations lead to a positive relationship. Using a within-subject experimental design, we find that more inequality unambiguously yields a higher level of coordination success. Furthermore, this result holds even for subjects whose payoffs remain unchanged. Our results suggest that total payoff motivations drive the positive relationship between inequality and coordination success found in this experiment. Moreover, our data highlight that the order of treatment matters. Groups facing over time a reduction in inequalities reach the efficient outcome more often, over the entire experiment, compared to groups facing over time an increase in inequalities. This study thus contributes to understanding whether social preferences and variations in inequality affect the outcome of coordination problems. [ABSTRACT FROM AUTHOR]

"Tipping points" for dangerous climate damages can transform climate protection into a coordination problem. If the location of the threshold is known, Nash equilibria exist in which the catastrophe is averted even without a climate agreement. However, there usually exists also an equilibrium in which no country exerts effort to prevent it, and the catastrophe occurs. We model equilibrium selection among non-cooperative countries with the help of an external randomization device, and analyze how it affects coalition formation. We find that results are much more nuanced than in the case where non-cooperative countries always coordinate on preventing the catastrophe. In some cases, a "coalition of free-riders" forms that is detrimental to welfare. In other cases, a "threshold equilibrium" emerges in which coalition members commit to do more than the outsiders, and the coalition is just large enough to become active. The grand coalition is also an equilibrium outcome, but is often unstable towards deviations by groups of countries. [ABSTRACT FROM AUTHOR]

We use experimental methods to investigate the extent to which breakdowns in coordination can lead to bank runs. Subjects decide whether to leave money deposited in a bank or withdraw it early; a run occurs when there are too many early withdrawals. We explore the effects of randomly forcing some subjects to withdraw early and varying the number of opportunities subjects have to withdraw. Bank runs occur frequently with forced withdrawals, even if these withdrawals are unlikely to cause the bank to fail. Exposure to bank runs has a much larger effect on future withdrawal behavior when there are multiple withdrawal opportunities than with a single opportunity. We also evaluate individual withdrawal decisions according to simple cutoff rules. We find that the cutoff rule corresponding to the payoff-dominant equilibrium of the game, which involves Bayesian updating of probabilities, explains subject behavior better than other rules.

If a monopoly supplies a perishable good, such as tickets to a performance, and is unable to price discriminate within a period, the monopoly may benefit from the potential entry of resellers. If the monopoly attempts to intertemporally price discriminate, the equilibrium in the game among buyers is indeterminate when the resellers are not allowed to enter, and the monopoly's problem is not well defined. An arbitrarily small amount of heterogeneity of information among the buyers leads to a unique equilibrium. We show how the potential entry of resellers alters this equilibrium.

Commercial publishers charge libraries about 6 times as much per page and 16 times as much per citation as nonprofit journals. The paper presents evidence that successful for profit journals are priced at several times average cost. They are able to earn "monopoly profits" despite free entry into the industry because journal reputation is the result of a kind of coordination game. The paper advocates withholding free referee services from overpriced journals.