Game Changer - the game theory podcast

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 behavior in the realms of self-deception and lie detection. Marta's research, rooted in behavioral 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. Specializing in behavioral and experimental economics, her acclaimed work focuses on the dynamics of ethical decision-making and its influence on behaviors 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.

In this episode we are talking to Frank Zagare about deterrence. The term gained popularity in particular during the cold war to describe the role of nuclear weapons in Soviet-American relations and, in light of recent events, has surfaced again. Together with Frank we look at the concept from a Game Theoretic perspective and discuss the shortcomings of the classical way of modeling deterrence. Frank then walks us through his alternative theory, perfect deterrence theory. He explains to us how it differs from classical way of modeling and which insights it offers on the war in Ukraine.

Frank Zagare is UB Distinguished Professor of Political Science at the University at Buffalo and author of several books like ‘The Dynamics of Deterrence’ and ‘Game Theory, Diplomatic History and Security Studies’ among others.

In this episode we are talking to Michel Maréchal about honesty from an economist’s perspective. He shares with us two studies he has conducted on honesty: Firstly, we talk about a mega-study in which Michel and his colleagues have tested in more than 300 cities around the globe with more than 17000 wallets whether people would rather return lost wallets if there were a higher or lower amount of money in them. Secondly, he shares a lab experiment in which he studied whether humans are more honest when interacting with other humans versus interacting with machines. Both studies give an understanding on human’s behaviour when being incentivized to being dishonest.  

Michel Maréchal is a Visiting Professor of Economics at the Rady School of Management, UC San Diego and Professor of Economics at the Department of Economics from the University of Zürich. His research is interdisciplinary and lies at the intersections of economics, social psychology, criminology, political science and biology.

Here you can find Michel’s papers on civic honesty and honesty in the digital age. You can also check out his website for other research topics he is currently working on.

In this episode we are talking to Shengwu Li about simplicity in game theoretic concepts. He explains to us, what simple means in this context, how this notion facilitates application of game theory to the "real world" and what an obviously dominant strategy is. We discuss how this understanding of game theory can be particularly helpful when conducting auctions and what practitioners need to know beyond that to harness game theory's predictive powers.

Shengwu Li is Associate Professor of Economics at Harvard University. His research is focused on Microeconomic Theory, Market Design and Behavioral Economics.

For many companies reaching their self-imposed CO2 targets has become quite a tall order. While procurement has tried to rise to the occasion progress is often slow. In this episode we are talking to Daniel Helmig who explains to us how companies can get unstuck and move forward in reaching their CO2 targets. We discuss what the past can teach us about possible solutions, which three important questions CEOs and other leaders should answer for an honest assessment of their situation and what gradual progress for companies could look like in the future.

Daniel Helmig is founder and Managing Director of the Helmig Advisory, which supports organizations in uncovering hidden potential in their supply chain, procurement, or operations area. Prior to this he held positions such as Corporate Transformation Leader, Group Head of Operations & Quality, Chief Procurement Officer, Senior Vice President, and Managing Director in five different industries.

In this episode, our guest Florian Englmaier explores the effectiveness of monetary incentives in driving team efficiency and innovation. He shares insights from an experimental study conducted in an escape room setting, uncovering surprising findings about the impact of incentives on non-routine tasks and the emergence of leadership dynamics within teams. 

Florian Englmaier is professor of organisational economics at the Ludwig-Maximilians-University in Munich, Germany. His main research interests lie in the fields of the economics of organisations and human resources, where he focuses on agency problems in organisations.

You can find the papers on his studies conducted in the escape room setting here and here.

In this episode we are talking to Chris Voss. He is a former FBI hostage negotiator and has written a bestselling book “Never split the difference”. We discuss with him, what we can learn from hostage negotiations about negotiations in other settings, especially in the business context. Chris shares his approaches to negotiations and compares the importance of “tactical empathy” with Game Theoretic approaches. He also gives concrete and tangible proposals on how the listeners can improve their negotiation skills.

Chris Voss is a former FBI lead hostage negotiator, and founder and CEO of The Black Swan Group, a company focused on negotiation skills trainings. He is author of the bestselling book "Never Split the Difference".

In today’s episode, we discuss Game Theory in movies. Santiago shares in which movies the prisoner’s dilemma, the chicken game and other concepts are portrayed. The discussion brings us to many known movies, amongst them ‘The dark knight’, ‘A Beautiful Mind’, and many others. Below we have listed a list of links of the movie clips we discuss in this episode. Santiago also shares in the discussion which of them were successful in portraying Game Theory and which ones could have done a better job.

Santiago Sanchez-Pages is a Reader in Economics in the Department of Political Economy. His background is in economic theory, including bargaining, game theory and political economy, but one of his main research fields is also experimental economics. He has written a book on Economics in movies titled “The Representation of Economics in Cinema. Scarcity, Greed and Utopia”.

• L.A. Confidential (Prisoner's dilemma): L.A. Confidential (3/10) Movie CLIP - The Interrogation (1997) HD
• The Dark Knight (Prisoner's dilemma): Social experiment || Dark knight
• Rebel without a cause (chicken run): The Chicken Run: Rebel Without A Cause (1955)
• Footloose (Chicken run): Holding Out for a Hero  Bonnie Tyler Footloose
• A Beautiful Mind (Nash equilibrium – or lack thereof): A Beautiful Mind - Bar Scene John Nash's Equilibrium Game Theory [1080p english full scene]
• Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb (Commitment): Doctor Strangelove - Doomsday Machine

In this episode, our guest Stefano DellaVigna shares his approach to answering research questions through various data sources, including lab experiments, natural experiments, and field experiments. We explore the significance of seeking out natural experiments and their value in enhancing our understanding of human behavior. Using examples such as the impact of violent movies on violence and changes in Fox News subscriptions, Stefano reveals surprising findings and their implications. We also discuss the availability of experimental data and the establishment of nudging units for research purposes.

Stefano DellaVigna is the Daniel Koshland, Sr., Distinguished Professor of Economics, Professor of Business Administration at the University of California, Berkeley, and co-director of the Berkeley Initiative for Behavioral Economics and Finance. His research interests are, among others, in the area of behavioral economics, applied microeconomics and media economics.

You can find his paper on the influence of movie violence on violent crime here and his paper on the “Fox News effect” here.

In this episode Tommaso Bondi shares his research on cultural markets with us. We take a deep dive into the insights he gained when studying online reviews and he explains to us why, counterintuitively, earning public recognition does not necessarily lead to higher ratings. A finding which, as we learn from Tommaso, is closely related to how well customer preferences and product match. Tommaso’s result does not only have theoretical merit but also seems to be observable in practice. We then also discuss the impact of experts on reviews and finally take a short detour to strategies of brick-and-mortar bookstores.

Tommaso Bondi is Assistant Professor of Marketing and the Demir Sabanci Faculty Fellow of Marketing and Management at Cornell Tech and the SC Johnson Graduate School of Management at Cornell University. His research is mainly focused on economics of digitization, quantitative marketing, and behavioral and experimental economics.

You can find his papers “Alone, Together: A Model of Social (Mis)Learning from Consumer Reviews” and “The Good, The Bad and The Picky: Reference Dependence and the Reversal of Product Ratings” here and here.

In today’s episode, we explore one of the classics in Bargaining theory: The Rubinstein Bargaining Model. And we have found the perfect guest - who better to explain this bargaining model than its founder Ariel Rubinstein himself! Ariel not only shares how the idea of the model came to be, but he also comments on some results and critically discusses whether the Rubinstein Bargaining Model (and Game Theory in general) has predictive or normative power for real-life situations.

Ariel Rubinstein is Professor of Economics at the School of Economics at Tel Aviv University and the Department of Economics at New York University. His research is focused on Economic Theory, in particular Decision Theory and Game Theory.

You can download his books for free (also the book “Economic fables” mentioned in our episode) and check out his Atlas of Cafés on his website https://arielrubinstein.tau.ac.il/ .

There, you also find his original paper introducing what came to be know the “Rubinstein Bargaining Model”: “Perfect Equilibrium in a Bargaining Model”

Monetary incentives are a part of our daily lives, from work bonuses to fines for minor traffic violations. But can they lead us to make bad decisions? In this episode, our guest Sandro Ambühl presents an empirical study in which he investigates this very question. He explains what constitutes a bad decision in the economic/rational sense and how people's decisions are related to regret, information, and the size of the monetary incentive. 

Sandro Ambühl is Assistant Professor of Behavioural Economics of Financial Markets at the University of Zurich, where his research is focused on Behavioural Experimental Economics, Behavioural and Experimental Finance, Repugnant Transactions and Rational Inattention.

You can find his paper “Can Incentives Cause Harm? Tests of Undue Inducement” here.

In this episode, we explore how time pressure and regret can influence our search behavior as customers in the world of online shopping. Our guest, Timm Opitz, sheds light on his research paper titled "Time Pressure and Regret in Sequential Search", which investigates the impact of urgency and regret on optimal search behavior by conducting experiments in a controlled environment. He also shares some strategies we can use to overcome the influence of urgency and regret in our shopping behaviour.

Timm Opitz is economist currently pursuing his PhD at the Max-Planck-Institute for Innovation and Competition in Munich, Germany, where he is part of the Innovation and Entrepreneurship Research group. As such, his research interests are Entrepreneurship, Behavioral Market Design and Developmental Psychology.

You can find his paper on "Time Pressure and Regret in Sequential Search" here.