James E. Parco

Two-Stage Contests with Budget Constraints: An Experimental Study

We report the results of an experiment on two-stage contests with budget-constrained agents competing to win an exogenously determined prize. We study a class of two-stage contests where in stage 1 agents first compete within their own groups by expending resources, and in stage 2 the winners of each group compete with one another to win the prize by expending additional resources subject to the budget constraint. Winners in each stage are determined by Tullocks proportional contest success function. We present the subgame perfect equilibrium solution for this model, derive predictions for our experiment, and then test them experimentally. The equilibrium model is flatly rejected mostly due to over expenditure in stage 1. A descriptive model that extends the equilibrium solution by allowing for 1) non-pecuniary utility of winning and 2) misperception of the probability of winning better accounts for some but not all of the behavioral regularities. We then turn to an adaptive learning model that accounts for several features of the dynamics of play but still significantly under-predicts the stage 1 expenditures.

Equilibrium Play and Adaptive Learning in a Three-Person Centipede Game

The two-person centipede game is one of the most celebrated paradoxes of backward induction in complete information extensive form games. An experimental investigation of a three-person centipede game shows that the paradoxical results are strongly affected by the size of the stakes. When the number of players in the game is increased from two to three and the game is played for unusually high stakes with group composition being randomly changed from trial to trial, the paradox is considerably weakened as players approach equilibrium play with multiple iterations of the stage game. When the game is played with low stakes, there is no evidence for equilibrium play or learning across iterations of the stage game. An adaptive learning model that assumes updating of the individual probabilities of choice outperforms alternative static and dynamic models in accounting for the major results observed in the high-stake experiment.

Effects of Financial Incentives on the Breakdown of Mutual Trust

Disagreements between psychologists and economists about the need for and size of financial incentives continue to be hotly discussed. We examine the effects of financial incentives in a class of interactive decision-making situations, called centipede games, in which mutual trust is essential for cooperation. Invoking backward induction, the Nash equilibrium solution for these games is counterintuitive. Our previous research showed that when the number of players in the centipede game is increased from two to three, the game is iterated in time, the players are rematched, and the stakes are unusually high, behavior approaches equilibrium play. Results from the present study show that reducing the size of the stakes elicits dramatically different patterns of behavior. We argue that when mutual trust is involved, the magnitude of financial incentives can induce a considerable difference.

The breakdown of cooperation in iterative real-time trust dilemmas

We study a class of trust-based cooperation dilemmas that evolve in continuous time. Characteristic of these dilemmas is that as long as all n players continue to cooperate, their payoffs increase monotonically over time. Simultaneously, the temptation to defect increases too, as the first player to defect terminates the interaction and receives the present value of the payoff function whereas each of the other n−1 players only receives a proportion δ (0 > δ > 1) of the defecting player’s payoff. We introduce a novel experimental institution that we call the Real-Time Trust Game (RTTG) to examine this class of interactions. We then report the results from an iterated RTTG in which the values of n and δ are varied in a between-subjects design. In all conditions, cooperation breaks down in the population over iterations of the game. The rate of breakdown sharply increases as n increases and more slowly decreases as δ increases. Copyright Economic Science Association 2006

Coordination in the Aggregate Without Common Knowledge or Outcome Information

In his book “Micromotives and Macrobehavior” Schelling set the stage for a systematic analysis that explores the relation “between the behavior characteristics of the individuals who comprise some social aggregate, and the characteristics of the aggregate” (1978, p.13). This analysis is both challenging and difficult because the entire aggregate outcome is evaluated, not merely how each individual does within the constraints of her own environment. Aggregate behavior necessarily involves some sort of coordination. In reflecting on how ant colonies work, Schelling noted (see also Gordon, 1999) that “why the system works as it does, and as efficiently as it does, is a dynamic problem of social and genetic evolution” (1978, p. 21).

Transgender Military Personnel in the Post-DADT Repeal Era A Phenomenological Study

This study is the first to systematically inquire into the lives of transgender men and women currently serving across the branches of the US military in the post-“Don’t Ask, Don’t Tell” (DADT) repeal era. We employed an interview protocol from a stratified convenience sample (n = 14) of clandestinely serving active duty, guard and reserve military members from the US Army, Navy, Air Force, and Marine Corps who self-identified as transgender or transsexual. Using phenomenology as a methodological foundation, we present a revelatory case study based on lived experiences from firsthand accounts furthering the collective understanding of gender dysphoria in a contemporary military context.

Population Learning of Cooperative Behavior in a Three-Person Centipede Game

We consider mixed populations (N 1/4 21) of genuine (humans) and arti.cial (robots) agents repeatedly interacting in small groups whose composition is changed randomly from round to round. Our purpose is to study the spread of cooperative or non-cooperative behavior over time in populations playing a 3-person centipede game by manipulating the behavior of the robots (cooperative vs. noncooperative) and their proportion in the population. Our results convey a positive message: adding a handful of cooperative robots increases the propensity of the genuine subjects to cooperate over time, whereas adding a handful of non-cooperative agents does not decrease this propensity. If there are enough hard-core cooperative subjects in the population, they not only negate the behavior of the non-cooperative robots but also induce other subjects to behave more cooperatively.

Multistage Sealed-Bid k-Double Auctions: An Experimental Study of Bilateral Bargaining

Mechanisms that structure bargaining between a potential buyer and potential seller are of perpetual interest to both academics and practitioners. An ‘ideal bargaining mechanism’ would enable bargaining parties to reach an agreement 100 per cent of the time when a deal is possible and collectively realize all possible gains from trade. However, the only individually rational way to achieve maximum efficiency would be for the bargaining parties truthfully to reveal their private valuation, which is typically not in the players’ unilateral best interests. The result: bargaining parties end up ‘walking away’ from a potentially profitable deal, especially when there is a narrow trading range. The single-stage sealed-bid κ-double-auction mechanism is no exception. This particular trading mechanism requires that both buyer and seller simultaneously and independently submit an offer to buy/sell (the seller submits an ask s and the buyer submits a bid b). Each player has an independent predetermined reservation value for the indivisible object of potential trade denoted by vs and vb, for the seller and buyer, respectively. Only when both parties have made their offers, are the offers revealed. If the buyer is willing to pay at least as much as the seller is asking, trade occurs at price p and gains from trade for the seller and buyer are p — v s and v b — p, respectively. If there is no trade, then neither trader incurs any cost and the gain for each is taken to be zero.

Beyond DADT Repeal: Transgender Evolution within the US Military

ABSTRACT We present a revelatory case study that investigated the effects of an open gender transition within a U.S. military organization. The research subject, a retired military officer and civil servant, made an open gender transition while remaining in the same job with the same chain of command and within the same organization. Relying on extensive interview data, we analyze the effect of how an open gender transition impacted an active-duty military unit during a 2-year period (2012–2014) prior to the Department of Defenses 2015 decision to pursue open inclusion of transgender men and women in the U.S. armed forces.

Comparing Institutional Level and Technical Core Leaders: How Personality and Organizational Roles Affect Leadership Choices

Conventional wisdom suggests that leaders should conform to a style best suited for one’s organization, or at least the best style for a particular role. Yet, this approach implies a unitary approach to leadership and assumes chameleon-like capabilities. (Conger 2004) Recent work on the power of authenticity (e.g., George, et al, 2007) and the persistence of personality make it seem unlikely that would-be leaders are sufficiently malleable to change his or her leadership style at will. Instead, we should expect leaders to gravitate toward the roles in which they can be most authentic. We demonstrate this expected, natural sorting by examining US military organizations using Thompson’s (1967) division of responsibility and control within organizations. In particular, we apply Yukl’s (2008) leadership dimensions and Gangestad and Snyder’s (2000) self-monitoring scale to demonstrate that technical core and institutional level leaders rely on very different leadership styles. We then show that the need for authenticity drives different personalities into very different leadership roles.