![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
purplecatThis is the last experimental game theory talk I'm going to precis - but it was a fascinating session and an area I'd not come across before.
This talk was by local man, Juergen Bracht. The "trust game" is one which involves an investor and an allocator. The investor starts with 2 points and can keep them or invest them. If (s)he invests them they automatically grow to 8 pts which the allocator can then either keep entirely for themselves or split between the investor and the allocator. Juegen was interested in the effects of two processes on the trust game. The first, "cheap talk", was where the allocator was allowed to tell the investor what they intended to do with the points in advance, but was not held to that utterance. The second, "observation", was where the investor had access to the allocator's previous actions.
Unsurprisingly, especially since the interaction was computer mediated, not face-to-face, cheap talk had little effect on investor or allocator actions. Less surprisingly observation did have an effect (except in the last round - where both investor and allocator knew it was the last round). The reason I say "less surprisingly" is became in pure game theoretic terms the reasoning goes: in the last round the allocator should keep all the points since no one will ever use the outcome of the round in an observation, therefore the investor should not invest their points. This being the case the second-to-last round is the last one where anyone will invest so the allocator should keep all the points since no one will ever use the outcome of the round in an observation, therefore the investor should not invest their points. This being the case... and so on so no one ever invests anything... Clearly classical game theory needs some rethinking if we expect it to realistically model human actions.
This talk was by local man, Juergen Bracht. The "trust game" is one which involves an investor and an allocator. The investor starts with 2 points and can keep them or invest them. If (s)he invests them they automatically grow to 8 pts which the allocator can then either keep entirely for themselves or split between the investor and the allocator. Juegen was interested in the effects of two processes on the trust game. The first, "cheap talk", was where the allocator was allowed to tell the investor what they intended to do with the points in advance, but was not held to that utterance. The second, "observation", was where the investor had access to the allocator's previous actions.
Unsurprisingly, especially since the interaction was computer mediated, not face-to-face, cheap talk had little effect on investor or allocator actions. Less surprisingly observation did have an effect (except in the last round - where both investor and allocator knew it was the last round). The reason I say "less surprisingly" is became in pure game theoretic terms the reasoning goes: in the last round the allocator should keep all the points since no one will ever use the outcome of the round in an observation, therefore the investor should not invest their points. This being the case the second-to-last round is the last one where anyone will invest so the allocator should keep all the points since no one will ever use the outcome of the round in an observation, therefore the investor should not invest their points. This being the case... and so on so no one ever invests anything... Clearly classical game theory needs some rethinking if we expect it to realistically model human actions.