10th Conference on Logic and the Foundations of Game and Decision Theory

LOFT 2012 is the tenth in a series of conferences on the applications of logical methods to foundational issues in the theory of individual and interactive decision-making. Preference is given to papers that bring together the work and problems of several fields, such as game and decision theory, logic, computer science and artificial intelligence, philosophy, cognitive psychology, mathematics and mind sciences.

The previous LOFT conference took place in Toulouse, France; see http://www.irit.fr/LOFT2010/ . The LOFT homepage http://www.econ.ucdavis.edu/faculty/bonanno/loft.html gives an overview of all past LOFT conferences.

http://personal.us.es/hvd/loft/

Models of conflict and cooperation between situational disparities of decision-makers.

Game-theoretic analysis has long been used to describe, predict, and explain behavior; game theory has also been used to develop theories of ethical or normative behavior and to prescribe such behavior.  In economics and philosophy, scholars have applied game theory to help in the understanding of good or proper behavior. 

W.T. Grandy Jr has pointed out that entropy, when strictly considered is a macroscopic quantity that refers to the whole system, and is not a dynamical variable and in general does not act as a local potential that describes local estimations.

While this has to be true under special circumstances, however, one can metaphorically think of entropic forces behaving like local physical forces. The approximation that constitutes classical irreversible thermodynamics is built on this metaphoric thinking. 

Social decision theory typically plays out via equilibrium, just as Voltaire centuries before wrote, the best of all possible worlds [for all players].  While useful this concept overlooks that equilibrium is an existence result, and simply can’t define payoffs that accurately reflect non-linear social entropy’s (desperate situations). 

Over focusing on equilibrium culminates in simple notions such as inefficient ideologies will not be chosen as strategy because they are not in equilibrium.  My point is that we must consider how to explain a player’s decision to choose a strategy off the equilibrium path.

The point is that terrorists, anarchists, political destructors (zombie cults), etc. cannot simply be dismissed as irrational or as rational fools.  I think we need to consider that our analytical and instrumental reason of positivism that lies at the heart of game theory cannot live up to the intricacies of social relations.

In further posts, I plan to develop this idea and attempt to develop useful model of payoffs that accurately reflect situational disparity of game players within the confines of Nash equilibria in compact, quasiconcave normal form games.

Roger Myerson's latest research "A Model of Moral-Hazard Credit Cycles"

Professor Roger Myerson, Nobel Prize Laureate in Economics and a professor at the University of Chicago has recently constructed a model of credit cycles driven by moral hazard in financial intermediation. The basic structure is that investment advisers or bankers must earn moral-hazard rents, but the cost of these rents can be efficiently spread over a banker’s entire career, by promising large back-loaded rewards if the banker achieved a record of consistently successful investments. The dynamic interactions among different generations of bankers can create equilibrium credit cycles with repeated booms and recessions.

This same structure however found conditions when taxing workers to subsidize bankers may increase investment and employment enough to make the workers better off.  In reviewing this result I observe that banker’s investment and the taxed workers are conjoint sets however in world markets we have competition in investment and employment.    In other words, if you tax workers to endow the bankers you must constrain the investment and employment sets or you simply normalize workers and subsidize the bankers.  This is also true over time where advantage to a taxed worker may not be realized in his work age, location or discipline.  Professor Roger Myerson has a compelling model but it would be interesting to see the effects of competition in the sets of bankers and workers in region, discipline and time.

Dr. John Nash's lecture at the University of Scranton last week

Last week Dr. John Nash gave a lecture at the University of Scranton titled “Ideal Money and the Motivation of Savings and Thrift.” He spoke about recent economic crises, including the national debt of Greece and the “panic of 2008” in the United States. Dr. Nash said that these issues are related to decades-old Keynesian economists’ policies that “have sold to the public a ‘quasi-doctrine’ which teaches, in effect, that … ‘bad money is better than good money.’”

Dr. Nash suggested the use of an industrial consumption price index, or ICPI, to use to give “ideal” money its proper value.   Outstanding!!

http://thetimes-tribune.com/college-corner/university-of-scranton/nobel-prize-winning-economist-holds-lecture-on-ideal-money-at-university-of-scranton-1.1235944#ixzz1f2x17gfD

the differential of player ability

Consider competitors pitted in a game which is commonly accepted as a game of skill.  Let us accept the inclusion of a random element to create a test of ability but not allow that risk to define the outcome of any single game.  As the competitor’s abilities approach equilibrium our game of pure skill now approaches a game of pure chance.  

So to begin the discussion lets consider eliminating the baselines of skill and chance, let’s reconsider basic completive mathematics using the differential of player ability.