Coalition formation with local public goods and group-size effect

Many public goods that are provided by coalitions have a group-size effect. Namely, people prefer to consume a public good in a larger coalition. This paper studies local public goods games with anonymous and separable group-size effect. The core is nonempty when coalition feasible sets are monotonic and players’ preferences over public goods satisfy a condition called cardinal connectedness. Moreover, a core allocation consists of connected coalitions.     

Warm-glow giving in networks with multiple public goods

This paper explores a voluntary contribution game in the presence of warm-glow effects. There are many public goods and each public good benefits a different group of players. The structure of the game induces a bipartite network structure, where players are listed on one side and the public good groups they form are listed on the other side. The main result of the paper shows the existence and uniqueness of a Nash equilibrium. The unique Nash equilibrium is also shown to be asymptotically stable. Then the paper provides some comparative statics analysis regarding pure redistribution, taxation and subsidies. It appears that small redistributions of wealth may sometimes be neutral, but generally, the effects of redistributive policies depend on how public good groups are related in the contribution network structure.     

Stability of jurisdiction structures in economies with local public goods

Individuals of different types can form groups, i.e. jurisdictions, for the purposes of collective consumption and production of local public goods by the members of the jurisdictions. Also, the utility of an individual may be affected by the composition and size of the jurisdiction of which he is a member. Jurisdiction formation is endogenous. Trade of private goods can occur within jurisdictions and within collections of jurisdictions. A stable partition of individuals is shown to exist for all sufficiently large economies. This stability depends, partially, upon the extent of ‘satisficing’ behavior or alternatively, jurisdiction formation costs, both of which can be made arbitrarily small. The major noteworthy assumption is that positive outputs cannot become virtually free in per-capita terms as the economy is replicated; this ensures that the public goods are ‘local’ rather than ‘pure’; otherwise assumptions on production sets are minimal and, in particular, convexity is not required. To obtain stability with coalition formation costs, additional assumptions are made ensuring that there is a ‘minimum efficient scale’ for coalitions.     

Effect of local information within network layers on the evolution of cooperation in duplex public goods games

Traditional works of public goods game (PGG) are often studied in simplex networks where agents play games through the same type of social interactions. In order to promote cooperation against the defection in PGGs in simplex network environment, many mechanisms have been proposed from different perspectives, such as the volunteering mechanisms, and the punishment and reward approaches. However, due to diverse types of interactions between agents in reality, the study of PGG should also consider the characteristic of multiplexity of networks. Hence, we firstly model the public goods game in the duplex network (for simplification of analysis, the duplex network is considered), in which agents have two types of social interactions, and thus the network is modeled as two network layers. This type of PGG is naturally named as duplex public goods game (D-PGG), in which agents can select one of the network layers to allocate their limited resources. Then for the new game environment (D-PGG), we propose a novel perspective to promote cooperation: degrading the information integrity, i.e., agents get information just from one network layer (local information) rather than from the whole duplex network (global information) in the evolution process. Finally, through theoretical analyses and simulations, we find that if agents imitate based on the local information of the payoff in the evolution, cooperation can be generally promoted; and the extent of promotion depends on both the network structure and the similarity of the network layers.     

A mathematical analysis for a model arising from public goods games

We study the effects of altruistic behaviors in a public goods game model which describes the competition between the farmers and the exploiters. Corresponding to different parametric regions, we analyze in detail the stability of the equilibrium states and obtain attraction regions for stable equilibria. Then using the upper–lower solution method and monotone iterations, we further show that for a family of wave speeds, there exist traveling wave solutions connecting one of the unstable states to the stable state. This answers a conjecture made by Wakano in [J.Y. Wakano, A mathematical analysis on public goods games in the continuous space, Math. Biosci. 201 (2006) 72–89]. The results indicate that when the penalty for the altruistic behavior is small, the growth rate of the population determines its survival or extinction states in the long run. Furthermore, if the two populations have the same total growth rate, altruism in the competition leads to a wide range of co-existent states. Numerical simulations are also presented to illustrate the theoretical results.     

Utilization of mathematical programming for public systems: An application to effective formation of integrated regional information networks

This paper concerns a methodological reflection on the multiobjective approach to public systems which involve group decision processes. Particular attention is given to an integrated program of regional systems which include value trade-offs between multiple objectives. Our intention is to combine the judgmental processes with the optimization processes in the soft public systems. A two-layer approach is applied. At the first layer, each regional program is formulated in mathematical programming based on a utility assessment with different regional characteristics. Each subsystem independently reflects its particular concern as a single agent. The dual optimal solutions obtained for each subsystem are treated as an index, or the theoretical prices, representing the value trade-offs among the multiple objectives. At the second layer, an effective formation of interregional cooperation for compromising the conflicting regional interests is examined. Ann-person cooperative game in the characteristic function form is used to evaluate the effectiveness of the cooperation. The characteristic function for the game is derived on the incremental value of the regional benefit after the formation of a cooperation. The nucleolus and the augmented nucleolus as the solution concepts of the cooperative game are used for indicating the effectiveness of the cooperation. Finally using alternative criteria, the results in assessing the best decisions are examined comparatively.     

Mutual punishment promotes cooperation in the spatial public goods game

Punishment has been proved to be an effective mechanism to sustain cooperation among selfish individuals. In previous studies, punishment is unidirectional: an individual i can punish j but j cannot punish i. In this paper, we propose a mechanism of mutual punishment, in which the two individuals will punish each other if their strategies are different. Because of the symmetry in imposing the punishment, one might expect intuitively the strategy to have little effect on cooperation. Surprisingly, we find that the mutual punishment can promote cooperation in the spatial public goods game. Other pertinent quantities such as the time evolution of cooperator density and the spatial distribution of cooperators and defectors are also investigated.     

The computation of a general equilibrium in a public goods economy

This paper presents an algorithm for computing approximations to a certain subset of Pareto optimal allocations in a public goods economy. Consumers are partitioned into a number of exogenous governmental jurisdictions, which provide public goods locally and raise revenue to cover their costs by means of a proportional wealth tax. The Pareto optimal allocations studied are consistent with profit maximization on the part of producers, and utility maximization over private goods bundles subject to after-tax budget constraints by consumers. The computational routine is based on the Scarf algorithm for computing fixed points.The origins of this research date back to the Dartmouth Workshop on Applications to economics of new methods of computing fixed points, held during the summer of 1972 under the direction of H. Scarf. The author wishes to thank the participants in this workshop for many stimulating discussions. Also the provision of computer time by the Computer Research Center of the National Bureau of Economic Research is gratefully acknowledged. FIXPOINT, an interactive computer system developed at the Computer Research Center, was used in performing the numerical computations presented in the paper.     

Endogenous effort in communication networks under strategic complementarity

This article examines individual incentives to produce information on communication networks. In our setting, efforts are strategic complements along communication paths with convex decay. We analyze the relationship between efforts and centrality on a set of networks which are unambiguous in terms of ordinal centrality. We first show that in both dominant and dominated equilibria central agents exert more effort. Second, we explore the issue of social coordination induced by our game.     

Endogenous network formation in a Tullock contest

We propose a model of network formation in a Tullock contest. Agents first form their partnerships and then choose their investment in the contest. While a link improves the strength of an agent, it also improves the position of her rival. It is thus not obvious that they decide to cooperate. We characterize all pairwise equilibrium networks and find that the network formation process can act as a barrier to entry to the contest. We then analyze the impact of network formation on total surplus and find that a social planner can increase total surplus by creating more asymmetry between agents, as long as this does not reduce the number of participating agents. We show that barriers to entry may either hurt total surplus, as the winner of the prize does not exploit all the possible network benefits, or improve total surplus since less rent is dissipated when competition becomes less fierce. Finally, when networking acts as an endogenous barrier to entry, no pairwise equilibrium network is efficient.     

Heuristics for multi-period capacity expansion in local telecommunications networks

In this paper, different heuristics are devised to solve a multi-period capacity expansion problem for a local access telecommunications network with a tree topology. This expansion is done by installing concentrators at the nodes and cables on the links of the network. The goal is to find a least cost capacity expansion strategy over a number of periods to satisfy the demand. A local search heuristic is first proposed to improve previously reported results on problem instances based on different cost and demand structures. This heuristic is then integrated into a genetic algorithm to obtain further improvements.     

Melioration learning in iterated public goods games: The impact of exploratory noise

Experimental observations in iterated public goods games are explained by a simple but empirically well-grounded model of long-term reinforcement learning. In many experiments, medium levels of cooperation at the beginning decrease with further repetitions. However, in some settings, the actors only slowly learn the individual benefits of defection. In the present model, the decay in cooperation is mitigated by high individual returns, a large group size or stability in the group’s composition. Results from agent-based simulations are presented, and the underlying mechanisms are disclosed. The proposed explanation stresses the role of exploratory noise: if multiple actors explore their alternatives simultaneously, the marginal benefit of defection diminishes and cooperation can be sustained.     

Reputation-based mutual selection rule promotes cooperation in spatial threshold public goods games

Most previous studies involving public goods games are investigated under a simplifying assumption that participation is either compulsive or unidirectional optional in collective interactions. Nevertheless, how the mutual selection rule, a more realistic participation mode, affects the evolution of cooperation in structured populations is still unclear. Here we introduce a reputation-based mutual selection rule for constituting participant groups into spatial threshold public goods games, where the public goods game can be conducted only if the participant number is not less than the threshold parameter. Interestingly, we find that moderate tolerance range results in the best environment for cooperators’ viability. Also, we show that lower member threshold is favorable for the evolution of cooperation, and correspondingly provide some typical snapshots for defectors, “active” cooperators (cooperators on which the public goods games are successfully conducted), and “inactive” cooperators. Moreover, we investigate the effects of memory factor in individuals’ reputation updating on the evolution of cooperation. Our work may provide an appropriate and alternative perspective in understanding the widespread cooperative behaviors in some realistic situations.     

Models for planning capacity expansion in local access telecommunication networks

The rapid progress of communications technology has created new opportunities for modeling and optimizing the design of local telecommunication systems. The complexity, diversity, and continuous evolution of these networks pose several modeling challenges. In this paper, we present an overview of the local telephone network environment, and discuss possible modeling approaches. In particular, we (i) discuss the engineering characteristics of the network, and introduce terminology that is commonly used in the communications industry and literature; (ii) describe a general local access network planning model and framework, and motivate different possible modeling assumptions; (iii) summarize various existing planning models in the context of this framework; and (iv) describe some new modeling approaches. The discussion in this paper is directed both to researchers interested in modeling local telecommunications systems and to planners interested in using such models. Our goal is to present relevant aspects of the engineering environment for local access telecommunication networks, and to discuss the relationship between engineering issues and the formulation of economic decision models. We indicate how changes in the underlying switching and transmission technology affect the modeling of the local telephone network. We also review various planning issues and discuss possible optimization approaches for treating them.This research was initiated through a grant from GTE Laboratories, IncorporatedSupported in part by an AT&T research award.Supported in part by Grant No. ECS-8316224 from the Systems Theory and Operations Research Program of the National Science Foundation.     

Stability analysis of data-driven local model networks

This article discusses stability analysis of data-driven dynamic local model networks. In contrast to traditional fuzzy modelling, the structure and complexity of such model architectures is not unique when only observed input- and output data are available for their parametrization. The present article complements the well-known trade-off between accuracy and complexity by the notion of stability. For this purpose, existing Lyapunov stability criteria for local model networks are extended by a decay rate which represents a scalar and quantitative stability measure. It allows to compare models with different degrees of complexity also in view of their stability. For some of the commonly available Lyapunov stability criteria, the individual local model transitions are crucial. Therefore, in this article, an approach is introduced to determine the actually occurring model transitions by means of the identification data. The methods presented in the article are illustrated and discussed by means of a simulation example. It is shown how model complexity and the related approximation quality can have an adverse impact on the stability and how the outcome of different Lyapunov criteria is affected by the proper determination of local model transitions.     

The emergence of local norms in networks

We develop an explanation of the emergence of local norms and the associated phenomenon of geographical variation in behavior. Individuals are assumed to interact locally with neighbors in an environment with a network externality. Although many patterns of behavior are possible, the dispersed interactive choices of agents are shown to select behavior that is locally uniform but globally diverse. The range of applications of the theory includes regional variation in the practice of medicine, technology choice, and corruption. The framework is also useful for further developing our understanding of important phenomena like lock‐in, critical thresholds, and contagion. © 2006 Wiley Periodicals, Inc. Complexity 11: 65–83, 2006     

An improved local branching approach for train formation planning

The train formation plan (TFP) determines routing and frequency of trains, and assigns the demands to trains. In this paper, an improved local branching algorithm is proposed for the TFP model in Iranian railway. This solution strategy is exact in nature, although it is designed to improve the heuristic behavior of the mixed integer programming (MIP) solver at hand. In the local branching algorithm, additional constraints are built in the model for the binary variables, but in the improved local branching algorithm, the additional constraints are built in the model for integer variables. A state-of-the-art method is applied for parameter tuning using design of experiments approach. To evaluate the proposed solution method, we have simulated and solved twenty test problems. The results show the efficiency and effectiveness of the proposed approach. The proposed algorithm is implemented for Iranian Railway network as a case study.     

A collective model for the formation of public opinion: An application to nuclear public acceptance

A collective model is proposed for the formation of public opinion and applied to the problem of public acceptance for nuclear energy in Japan. The selection of attitude for the people to a certain subject is assumed to be made depending on the sociopsychological pressure suffering from the surroundings, and on the quality and quantity of information on that subject released from the newsmedia. The reportorial stance of the newsmedia, on the other hand, is assumed to vary depending on, not only public opinion, but also the resultant of the mutual watch of the newsmedia to each other, concerning the state of information on the subject. Both an individual person and an individual medium are regarded as an interactive but structureless particle, and the interactions between the particles of the people and of media are described by introducing respective potentials of the type of molecular dynamics. Applying this model to the issue of electricity generation by nuclear energy, it was found to well reproduce the observed movement of public opinion in Japan. It also became clear that this sort of physical model is quite useful for understanding the status of socially collective phenomena in which nonlinearity and self-organization are strongly concerned.     

Evaluation and optimization of urban public transportation networks

So far, not much attention has been given to the problem of improving public transportation networks. In many cities these networks have been built sequentially and do not fit to the needs of the users any more. The results are long travel times and an unnecessarily high number of people who have to transfer. Compared to other investments for improving the service level of public transportation systems, the costs of rerouting the public vehicles are low and can, yet, highly improve the performance of the system.To evaluate a public transportation network, the shortest distance and the shortest route from node x to node y, taking the waiting times for a vehicle into account, must be known.It is shown in this paper, how to compute distances and routes efficiently for large networks. Using this algorithm it is described how to evaluate the average transportation cost of the passengers in a public transportation network.In the second part of the paper a heuristic algorithm is stated that improves a public transportation network using the average transportation cost as the objective.Finally, some experiences with real world problems are reported.     

An improved public goods game model with reputation effect on the spatial lattices

How to model the evolution of cooperation within the population is an important and interdisciplinary issue across the academia. In this paper, we propose an improved public goods game model with reputation effect on spatial lattices to investigate the evolution of cooperation regarding the allocation of public resources. In our model, we modify the individual utility or fitness as a product of the present payoff and reputation-related power function, and strategy update adopts a Fermi-like probability function during the game evolution. Meanwhile, for an interaction between a pair of partners, the reputation of a cooperative agent will be accrued beyond two units, but the defective player will decrease his reputation by one unit. Extensive Monte Carlo numerical simulations indicate the introduction of reputation will foster the formation of cooperative clusters, and greatly enhance the level of public cooperation on the spatial lattices. The larger reputation factor leads to the higher cooperation level since the reputation effect will be enormously embedded into the utility evaluation under this scenario. The current results are vastly beneficial to understand the persistence and emergence of cooperation among many natural, social and synthetic systems, and also provide some useful suggestions to devise the feasible social governance measures and modes for the public resources or affairs.