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In Game Changer, the podcast by TWS Partners, we want to share our enthusiasm and passion for game theory and its applications.
We invite guests from business and academia to discuss how they use the power of game theory in their profession to make a difference – and to learn some fun anecdotes, useful facts and valuable insights along the way. Join us on this journey, and find out that game theory is much more than a topic for ivory tower discussions.
We invite guests from business and academia to discuss how they use the power of game theory in their profession to make a difference – and to learn some fun anecdotes, useful facts and valuable insights along the way. Join us on this journey, and find out that game theory is much more than a topic for ivory tower discussions.
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In this episode, we dive into the world of online mediation mechanisms and how they can resolve disputes in digital marketplaces. As online transactions become more global and complex, the need for efficient, strategy-proof systems to mediate conflicts has never been more crucial. Selçuk Özyurt explains how these mechanisms should be designed to handle disputes fairly. In this context, we discuss properties like strategy proofness and efficiency and Selçuk explains under which conditions mediation mechanisms exist that fulfil these conditions. Selçuk Özyurt is an Associate Professor of Economics at York University, with a research focus on game theory, mechanism and market design, and conflict resolution. The content of this episode is based on his paper Strategy-proof Multi-Issue Mediation: An Application to Online Dispute Resolution, which he co-authored with Onur Kesten. --- Christmas raffle To participate in our Christmas raffle, just send an email to gamechanger@tws-partners.com and let us know which book you want to win. Deadline of the raffle is 15 December 2024.
In this episode, we explore the fascinating world of social norms and how they influence behavior through the lens of game theory. What exactly are social norms, and why do they matter? Cristina Bicchieri explains how these unwritten rules shape our everyday actions and how game theory helps us understand when and why people follow or break these norms. We also delve into how organizations use this knowledge to drive social change, from improving sanitation to reducing corruption. Cristina Bicchieri is the S. J. Patterson Harvie Professor of Social Thought and Comparative Ethics at the University of Pennsylvania. Her research focuses on the intersection of philosophy, psychology, and game theory, particularly in understanding how social norms develop and evolve. Cristina has worked with global organizations like UNICEF and the World Bank to apply her research in real-world settings. If you want to dive deeper into the topic of social norms, you can check out Cristina’s book “The Grammar of Society: The Nature and Dynamics of Social Norms”.
In this episode, we delve into the high-stakes negotiations between the EU and the UK during Brexit, exploring the strategies and tactics from a game-theoretic perspective. Stefaan De Rynck provides an insider's view of the process, discussing key moments, the differing objectives of both sides, and the strategic approaches taken to achieve their goals. We analyze how the EU maintained a united front and the challenges posed by the UK's shifting leadership during the negotiations. Stefaan De Rynck is Principal Advisor to the Director-General for Communication at the European Commission. During the Brexit negotiations, he served as Senior Advisor to Michel Barnier, the EU’s Chief Brexit Negotiator. His expertise lies in international negotiations and EU affairs, offering a unique perspective on one of the most complex political negotiations of recent times. He has shared his view on the Brexit negotiations in his book Inside the Deal: How the EU Got Brexit Done.
In this episode, we discuss overconfidence and its underlying psychological mechanisms. Our guest Collin Raymond shares his research (joint work with David Huffman and Julia Shvets) based on a field study he conducted with managers in the context of their Bonus payment. We discuss their findings on how managers make overconfident predictions about their individual future performance. In the study they can link the overconfidence to managers having an overly-positive memory of past performance. We finish the discussion by deep-diving into other facets of overconfidence. Collin Raymond is Associate Professor of Strategy and Business Economics at the Johnson School of Management of Cornell University. His research interests span Behavioural Economics, Experimental Economics, and Microeconomic Theory. He focuses on how individuals make decisions under uncertainty and the cognitive biases that influence these decisions. You can find the paper Collin describes in the interview here.
In this episode, we delve into the common pitfalls that negotiators face which lead to value drain in dealmaking. Our guest Paul Papayoanou identifies four types of value-destructive behaviours and shares insights on avoiding these traps. He also outlines the characteristics of an effective dealmaker, emphasising the importance of being a savvy strategist who can balance toughness with fairness. Furthermore, we explore the role of preparation and reputation in successful negotiations, and how game theory can be applied to enhance negotiation strategies. Paul Papayoanou is a Senior Advisor with Decision Frameworks, a boutique consultancy based in Houston, Texas, serving clients worldwide. He has taught at the University of California San Diego and Harvard University, and is the author of "Game Theory for Business: A Primer in Strategic Gaming." Paul's extensive experience in game theory and dealmaking provides invaluable insights for anyone looking to improve their negotiation skills. You can read his recent article on addressing value drain in dealmaking here (or e-mail Paul for the pdf version: paul@decisionframeworks.com). Paul has already been a guest on our show. You can check out his episode on how to bid in an auction here or here.
In this episode, we discuss with Eduardo Azevedo his research on adverse selection in insurance markets. Eduardo gives details on recent developments in genomic advances, also in light of the significant price decrease for obtaining the individual genome. We discuss the possible long-term effect on the insurance market (e.g. specific health insurances) if individuals had access to their genome and obtained their individual risk profile. Based on that we discuss the potential for adverse selection and Eduardos initial heuristic findings. Eduardo Azevedo is Professor of Business Economics and Public Policy at the Wharton School, University of Pennsylvania. His research focuses on market design, applied microeconomic theory, and industrial organisation.
In this episode, we discuss with Greg Kubitz his research on loss aversion. Greg shares his research in which he targets to explain loss aversion using Game Theoretic approaches. He combines approaches such as the principal agent model to be able to look at loss aversion through the evolutionary lens considering realistic assumptions on biological constraints given through our neural system. Greg Kubitz is senior lecturer in the School of Economics and Finance at the Queensland University of Technology in Brisbane, Australia. His research interests lie mainly within the field of game theory, with particular emphasis on information design and its applications to industrial organisation and behavioural economics.
In this episode, we engage with Yan Chen to unravel the underlying mechanisms of group identity and group discrimination. Yan discusses her research on ingroup favoritism. We learn how ingroup favoritism can occur even in assigned, artificial groups, and that people with a strong group identity even have a willingness to pay to shield themselves from outgroup information. Yan also provides insights into societal issues such as political polarisation and group-based conflicts. Yan Chen is the Daniel Kahneman Collegiate Professor in the School of Information at the University of Michigan and a Research Professor at the U-M Institute for Social Research. Her academic work combines theoretical and experimental research to examine market and mechanism design, as well as public economics, providing insights into the mechanics of human interaction in social settings.
In this episode, we explore the fascinating intersection of developmental psychology and economic theory through the lens of children's strategic decision-making abilities: Our discussion focuses on how the evolving capacities of children's brains influence their ability to engage in complex strategic thoughts. Our guest Isabelle Brocas shares the fascinating findings from long-term experimental studies she conducted with children from kindergarten to young adulthood. Isabelle Brocas is a Professor of Economics at the University of Southern California, where she co-directs both the Los Angeles Behavioral Economics Laboratory (LABEL) and the Theoretical Research in Neuroeconomic Decision-making (TREND) Institute. Her research primarily examines the decision-making processes in humans, with a focus on how young people make choices, the influences behind these decisions, and the cognitive limitations that may affect their rationality. For more on Isabelle's work, you can visit her personal homepage.
In this episode, we delve into the complex world of fostering civic responsibility. Our guest Tore Ellingsen explains how the interplay of regulation, personal sacrifice, and culture can build socially responsible societies or organisations. The conversation is rooted in the perspectives offered in Tore’s recent book, "Institutional and Organizational Economics: A Behavioral Game Theory Introduction," where he uses insights from behavioural game theory, psychology, and sociology to understand the dynamics of human interactions in groups. Tore Ellingsen is Professor of Economics at the Stockholm School of Economics, holding the Ragnar Söderberg Chair in Economics. His research interests span institutional, organisational, and behavioural economics, focusing on understanding the factors that contribute to the success or failure of human groups. Through his work, Tore seeks to answer pivotal questions regarding human cooperation and organisational effectiveness, providing valuable insights for both academia and real-world applications. For more information on Tore’s current research, you can check out his homepage.
In this episode, our guest Maarten Janssen helps us to explore the field of consumer (online) search. We discuss why economists are particularly interested in this topic and explore the reliability and dynamics of sponsored search results, uncovering the nuances and implications of these prevalent online phenomena. The insights from Maarten’s research (which he conducted together with Thomas Jungbauer, Marcel Preuss and Cole Williams on one paper and with Eeva Mauring on another paper) shed light on the complex interplay between consumer behaviour, search algorithms, and market dynamics. Maarten Janssen is Professor of Microeconomics at the University of Vienna. In addition to his role at the University, he is a fellow of the Centre for Economic Policy Research, a member of the Royal Holland Society of Sciences and Humanities, a research associate at the Centre for European Economic Research (ZEW), and an academic affiliate at CEG Europe. Apart from consumer search, his research focusses on auctions and markets with asymmetric information. For more information about Maarten's work and to read his papers, visit his homepage here and check out his paper on sponsored search positions.
In this episode, we explore with Dmitry Taubinsky economic approaches on regulating sin goods such as alcohol or sugary beverages. We discuss the classical approach of taxation and Dmitry compares the approach to nudging approaches. Our discussion leads us into many further economic details: From externalities and internalities, over the question who bears the tax burden to the price elasticity of demand. Dmitry explains to us, why these effects are relevant, how they relate to each other and how they also affect the optimal taxation. Dmitry Taubinsky is an associate professor of economics at UC Berkeley and a research associate at the NBER. His research interests include Behavioral Economics and Public Economics with a special focus on the intersection of both fields using a combination of theory, experiments, and surveys as methods for the analysis of his research questions. His papers referenced in the podcast on sin taxes and nudging can be found here and here.
In this episode, we explore the often misunderstood relationship between game theory and human behaviour. Our guest Moshe Hoffman challenges the conventional belief that game theory only applies to rational actors. As Moshe explains in his book “Hidden games” (co-authored with Erez Yoeli), even seemingly irrational behaviours and preferences can be explained through game theory. We dive into the concept of 'hidden games' and their influence on our daily actions and decisions, revealing the subtle complexities of human social behaviour. Moshe Hoffman is a lecturer at Harvard's Department of Economics and at Boston College as well as an independent scholar. His interdisciplinary research bridges game theory, models of learning and evolution, and experimental methods to unravel the underpinnings of social behaviour, preferences, and ideologies. For more information on Moshe Hoffman and his work, you can visit his homepage.
In this episode we are talking to Uri Gneezy about his latest book publication “Mixed Signals – How Incentives Really Work”. He explains to us what mixed signals are and makes us aware that we encounter them far more frequently than one would expect. We deep dive into the topic in the context of negotiations where signaling plays a major role. Uri walks us through the different effects that are at play when the opening offer in a negotiation is communicated to the other party and makes clear why it should neither be too high nor too low. Uri Gneezy holds the Epstein/Atkinson Endowed Chair in Behavioral Economics at the University of California, San Diego's Rady School of Management. His research interests are at the intersection of economic theory and application and include topics such as incentives-based interventions to increase good habits and decrease bad ones, Pay-What-You-Want pricing, and the detrimental effects of small and large incentives. In addition to this he is author of the books “The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life” and “Mixed Signals – How Incentives Really Work” which was published in 2023.
In this episode, we explore together with our guest Juan D. Carrillo the confluence of economics and neuroscience in understanding human decision-making processes. We delve into how the combination of these two disciplines can illuminate the biological basis of decision making, with a particular focus on complex scenarios like multi-task decision making, self-control, and impulsivity. Juan shares insights from his papers, discussing the innovative approach of neuroeconomic theory and its real-world applications. Juan D. Carrillo is a Professor of Economics at the University of Southern California and a Research Fellow in the Industrial Organization and Public Policy programs at the Center for Economic Policy Research (CEPR). His research spans Neuroeconomic Theory and Experimental Economics, blending insights from neuroscience and economics to understand decision-making processes. Additionally, Juan co-directs the Los Angeles Behavioral Economics Laboratory (LABEL), focusing on experimental research in economic decision-making and strategic interactions. You can find out more about his research on his homepage and read the papers that are discussed in this episode here and here.
In this episode, we discuss with Canice Prendergast how market design mechanisms can be applied in social services. Canice shares how he collaborated with Feeding America on optimally allocating about 300 million pounds of food per year to hundreds of food banks across the United States. They were developing a market-based allocation mechanism introducing an internal currency to bid for available food on a daily basis. Canice shares the process itself as well as many anecdotes on its development and introduction. Canice Prendergast is W. Allen Wallis Distinguished Service Professor at the University of Chicago Booth School of Business. He is an economist specialising in economic theory, labour economics, and organizational behaviour.
In this episode, we discuss with Jeff Ely a topic that has gotten significant public attention last year with the introduction of Chat GPT and similar programmes: The role of AI. Jeff shares his research with Balazs Szentes on a natural selection model on AI. They set up a model to study the AI control problem in the context of decentralized economic production. The study illustrates the importance of AI transparency as already deviating from ‘perfect transparency’ leads to catastrophic consequences. In our discussion he shares all details of the model, and we also discuss potential consequences for future development of AI technology. Jeff Ely is the Charles E. and Emma H. Morrison Professor of Economics at Northwestern University. With interests ranging from pure game theory to behavioral economics, Jeff has made significant contributions to various facets of economics, including mechanism design and the evolution of preferences. You can find the paper titled “Natural Selection of Artificial Intelligence”, which he wrote together with Balazs Szentes, here.
In this episode, we explore with Marta Serra-Garcia the paradoxes of human behaviour in the realms of self-deception and lie detection. Marta's research, rooted in behavioural and experimental economics, questions why lying persists in a society that values morality. We delve into her experiments that examine how people reconcile their self-image with material interests, the timing of incentive information in ethical decision-making, and the effectiveness of algorithms in detecting deception. Marta Serra-Garcia is an Associate Professor of Economics and Strategy at the UC San Diego Rady School of Management. Specialising in behavioural and experimental economics, her acclaimed work focuses on the dynamics of ethical decision-making and its influence on behaviours like lying and charitable giving. A prolific researcher, Marta's work has been published in esteemed journals, earning her a place among the 2020 Best 40 under 40 MBA Professors. You can find her paper on self-deception here and her paper on lie detection here.
In this episode, our guest Alain Cohn helps us to understand the complex relationship between wealth and perceptions of fairness in society. We explore his innovative research methodology, which move beyond traditional surveys to more accurately reflect the nuances of economic behaviors. The conversation also highlights the differences in attitudes towards inequality among the wealthy, particularly contrasting those with inherited wealth and the newly affluent. Through Alain's studies, we gain a deeper understanding of the dynamics at play between wealth, fairness, and policy influence in today’s society. Alain Cohn is Associate Professor at the University of Michigan School of Information, focused on the social and psychological determinants of economic behaviors. His work has significantly contributed to our understanding of honesty, financial risk-taking, and the impact of wealth on fairness perceptions and redistribution policies. In the episode, we also briefly mention the ultimatum game and the dictator’s game. If you want to find out more about these games, you can also check out our episode on first offers in bargaining with Lionel Page.
In this episode, our guest Marc Robinson, strategy and risk management expert, shares details on the recent UAW strikes and negotiations. With his rich background in the automotive industry and his experience as an economist at General Motors in the past, Marc observed the recent negotiations from a Game Theorist perspective. He shares the key success factors for the UAW to complete the union negotiations in their favor ranging from historical developments to changes in the UAW’s strategic moves compared to past union negotiations. We also discuss the broader implications of these negotiations for the automotive industry, its supply chain, and future union negotiations. Marc Robinson works as an independent strategy and risk management consultant, following a career as an internal consultant and economist at General Motors. It was there that he first introduced game theoretic concepts and tools, applying them to a vast range of applications such as strategic product or investment decisions, or negotiations with partners, suppliers, and unions. He also taught at UCLA and Stanford and worked on the Council of Economic Advisers under President George H.W. Bush. If you want to read more on the 2023 UAW strikes, you can check out Marc’s website https://www.csuitenewsletter.com/, where he covered the topic extensively in several blog posts.
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