”Illusion of control” in Time-Horizon Minority and Parrondo Games

Human beings like to believe they are in control of their destiny. This ubiquitous trait seems to increase motivation and persistence, and is probably evolutionarily adaptive [J.D. Taylor, S.E. Brown, Psych. Bull. 103, 193 (1988); A. Bandura, Self-efficacy: the exercise of control (WH Freeman, New York, 1997)]. But how good really is our ability to control? How successful is our track record in these areas? There is little understanding of when and under what circumstances we may over-estimate [E. Langer, J. Pers. Soc. Psych. 7, 185 (1975)] or even lose our ability to control and optimize outcomes, especially when they are the result of aggregations of individual optimization processes. Here, we demonstrate analytically using the theory of Markov Chains and by numerical simulations in two classes of games, the Time-Horizon Minority Game [M.L. Hart, P. Jefferies, N.F. Johnson, Phys. A 311, 275 (2002)] and the Parrondo Game [J.M.R. Parrondo, G.P. Harmer, D. Abbott, Phys. Rev. Lett. 85, 5226 (2000); J.M.R. Parrondo, How to cheat a bad mathematician (ISI, Italy, 1996)], that agents who optimize their strategy based on past information may actually perform worse than non-optimizing agents. In other words, low-entropy (more informative) strategies under-perform high-entropy (or random) strategies. This provides a precise definition of the “illusion of control” in certain set-ups a priori defined to emphasize the importance of optimization. An erratum to this article is available at .     

Incompatibility networks as models of scale-free small-world graphs

We make a mapping from Sierpinski fractals to a new class of networks, the incompatibility networks, which are scale-free, small-world, disassortative, and maximal planar graphs. Some relevant characteristics of the networks such as degree distribution, clustering coefficient, average path length, and degree correlations are computed analytically and found to be peculiarly rich. The method of network representation can be applied to some real-life systems making it possible to study the complexity of real networked systems within the framework of complex network theory.     

Convergence properties and practical estimation of the probability of rank reversal in pairwise comparisons for multi-criteria decision making problems

In this paper, we address the impact of uncertainty introduced when the experts complete pairwise comparison matrices, in the context of multi-criteria decision making. We first discuss how uncertainty can be quantified and modeled and then show how the probability of rank reversal scales with the number of experts. We consider the impact of various aspects which may affect the estimation of probability of rank reversal in the context of pairwise comparisons, such as the uncertainty level, alternative preference scales and different weight estimation methods. We also consider the case where the comparisons are carried out in a fuzzy manner. It is shown that in most circumstances, augmenting the size of the expert group beyond 15 produces a small change in the probability of rank reversal. We next address the issue of how this probability can be estimated in practice, from information gathered simply from the comparison matrices of a single expert group. We propose and validate a scheme which yields an estimate for the probability of rank reversal and test the applicability of this scheme under various conditions. The framework discussed in the paper can allow decision makers to correctly choose the number of experts participating in a pairwise comparison and obtain an estimate of the credibility of the outcome.     

Contract type and decision right of sales promotion in supply chain management with a capital constrained retailer

From the practices of Chinese consumer electronics market, we find there are two key issues in supply chain management: The first issue is the contract type of either wholesale price contracts or consignment contracts with revenue sharing, and the second issue is the decision right of sales promotion (such as advertising, on-site shopping assistance, rebates, and post-sales service) owned by either manufacturers or retailers. We model a supply chain with one manufacturer and one retailer who has limited capital and faces deterministic demand depending on retail price and sales promotion. The two issues interact with each other. We show that only the combination (called as chain business mode) of a consignment contract with the manufacturer’s right of sales promotion or a wholesale price contract with the retailer’s right of sales promotion is better for both members. Moreover, the latter chain business mode is realized only when the retailer has more power in the chain and has enough capital, otherwise the former one is realized. But which one is preferred by customers? We find that the former is preferred by customers who mainly enjoy low price, while the latter is preferred by those who enjoy high sales promotion level.     

Factorizations of complete graphs into caterpillars of diameter 5

We examine factorizations of complete graphs K_2n into caterpillars of diameter 5. First we present a construction generalizing some previously known methods. Then we use the new method along with some previous partial results to give a complete characterization of caterpillars of diameter 5, which factorize the complete graph K_2n.     

A limited resource model of fault-tolerant capability against cascading failure of complex network

We propose a novel capacity model for complex networks against cascading failure. In this model, vertices with both higher loads and larger degrees should be paid more extra capacities, i.e. the allocation of extra capacity on vertex i will be proportional to k_i ^γ , where k_i is the degree of vertex i and γ > 0 is a free parameter. We have applied this model on Barabási-Albert network as well as two real transportation networks, and found that under the same amount of available resource, this model can achieve better network robustness than previous models.     

Abstract Commensurators of Groups Acting on Rooted Trees

We show that the abstract commensurator of a nearly level transitive weakly branch group H coincides with the relative commensurator of H in the homeomorphism group of the boundary of the tree on which H acts. It is also shown that the commensurator of an infinite group which is commensurable with its own nth direct power contains a Higman–Thompson group as a subgroup. Applying these results to the Grigorchuk 2-group G we show that the commensurator of G is a finitely presented infinite simple group.