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Game Theory, Conditional Preferences, and Social Influence

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  • Wynn C Stirling
  • Teppo Felin

Abstract

Neoclassical noncooperative game theory is based on a simple, yet powerful synthesis of mathematical and logical concepts: unconditional and immutable preference orderings and individual rationality. Although this structure has proven useful for characterizing competitive multi-player behavior, its applicability to scenarios involving complex social relationships is problematic. In this paper we directly address this limitation by the introduction of a conditional preference structure that permits players to modulate their preference orderings as functions of the preferences of other players. Embedding this expanded preference structure in a formal and graphical framework provides a systematic approach for characterizing a complex society. The result is an influence network that allows conditional preferences to propagate through the community, resulting in an emergent social model which characterizes all of the social relationships that exist and which leads to solution concepts that account for both group and individual interests. The Ultimatum game is presented as an example of how social influence can be modeled with conditional preferences.

Suggested Citation

  • Wynn C Stirling & Teppo Felin, 2013. "Game Theory, Conditional Preferences, and Social Influence," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-11, February.
  • Handle: RePEc:plo:pone00:0056751
    DOI: 10.1371/journal.pone.0056751
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    References listed on IDEAS

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    1. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107015432, January.
    2. Martin Shubik, 2002. "Game Theory and Operations Research: Some Musings 50 Years Later," Operations Research, INFORMS, vol. 50(1), pages 192-196, February.
    3. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107695122, January.
    4. Arrow, Kenneth J, 1986. "Rationality of Self and Others in an Economic System," The Journal of Business, University of Chicago Press, vol. 59(4), pages 385-399, October.
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    Cited by:

    1. zhao, guo & Chai, Yingming, 2024. "A Sufficient Condition for Weakly Acyclic games with Applications," MPRA Paper 120789, University Library of Munich, Germany.

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