Related papers: Defaults: a double-edged sword in governing common…
The sustainable use of common-pool resources (CPRs) is a major environmental governance challenge because of their possible over-exploitation. Research in this field has overlooked the feedback between user decisions and resource dynamics.…
We study a game of resource extraction of a common good under one-dimensional diffusive dynamics with player actions corresponding to singular stochastic control up to absorption at $0$, implying a trade-off between profitable resource…
Cooperation is a key driver of human social progress. Studies of the evolution of cooperation typically assume a deterministic outcome for social interactions. But in real-world social interactions, interaction outcomes are often subject to…
We consider the problem of repeatedly choosing policies to maximize social welfare. Welfare is a weighted sum of private utility and public revenue. Earlier outcomes inform later policies. Utility is not observed, but indirectly inferred.…
In natural phenomena, data distributions often deviate from normality. One can think of cataclysms as a self-explanatory example: events that occur almost never, and at the same time are many standard deviations away from the common…
In this paper we analyze the resilience of a network of banks to joint price fluctuations of the external assets in which they have shared exposures, and evaluate the worst-case effects of the possible default contagion. Indeed, when the…
In this paper, we introduce a model that adds a non-linearity to discounting: the discounting factor may depend on the notional (i.e., discounted values are no longer linear in the notional). In the first part of the paper, we provide a…
In many real-life settings, agents must navigate dynamic environments while reasoning under incomplete information and acting on a corpus of unstable, context-dependent, and often conflicting norms. We introduce a general, non-modal,…
The conditions that can lead to the exploitative depletion of a shared resource, i.e, the tragedy of the commons, can be reformulated as a game of prisoner's dilemma: while preserving the common resource is in the best interest of the…
We use a controlled laboratory experiment to study the causal impact of income decreases within a time period on redistribution decisions at the end of that period, in an environment where we keep fixed the sum of incomes over the period.…
Situations where people have to decide between hurting themselves or another person are at the core of many individual and global conflicts. Yet little is known about how people behave when facing these situations in the lab. Here we report…
Individuals often aim to reverse undesired outcomes in interactions with automated systems, like loan denials, by either implementing system-recommended actions (recourse), or manipulating their features. While providing recourse benefits…
Common-pool resource governance requires users to cooperate and avoid overexploitation, but defection and free-riding often undermine cooperation. We model a human-environmental system that integrates dynamics of resource and users'…
The importance of adequately modeling credit risk has once again been highlighted in the recent financial crisis. Defaults tend to cluster around times of economic stress due to poor macro-economic conditions, {\em but also} by directly…
Evolution of cooperation in the prisoner's dilemma and the public goods game is studied, where initially players belong to two independent structured populations. Simultaneously with the strategy evolution, players whose current utility…
Cooperation and defection may be considered as two extreme responses to a social dilemma. Yet the reality is much less clear-cut. Between the two extremes lies an interval of ambivalent choices, which may be captured theoretically by means…
The multiple extension problem arises frequently in diagnostic and default inference. That is, we can often use any of a number of sets of defaults or possible hypotheses to explain observations or make Predictions. In default inference,…
Direct reciprocity is a mechanism for the evolution of cooperation in repeated social interactions. According to this literature, individuals naturally learn to adopt conditionally cooperative strategies if they have multiple encounters…
A dynamic model of collective consumption and saving decisions made by a finite number of agents with constant but different discount rates is developed. Collective utility is a weighted sum of individual utilities with time-varying utility…
Reducing the peak energy consumption of households is essential for the effective use of renewable energy sources, in order to ensure that as much household demand as possible can be met by renewable sources. This entails spreading out the…