• [2013-04-02]

  Progress made in the study of Effective Resources Allocation

Recently, Ph.D. candidate Te Wu has found that adaptive role switching favors the emergence and maintenance of fairness in networked ultimatum game, providing a new insight into allocating resources effectively. His work was supervised by Professor Long Wang in the Department of Industrial Engineering and Management. The article was admitted by Scientific Reports. (Te Wu, Feng Fu, Yanling Zhang, Long Wang. Adaptive role switching promotes fairness in networked ultimatum game. Scientific Reports, 2013, 3:1550, doi:10. 1038/srep01550).

In recent years, thanks to the effectiveness of the ultimatum game in characterizing and elucidating the issues surrounding the allocation of resource, and especially its practical implications for international bargains, mechanisms favoring fair split in the ultimatum game have attracted growing interests. In the ultimatum game, two players are randomly assigned two different roles respectively to split an offer. The proposer advices how to split the offer. The responder’s strategy finalizes the result of allocating.

Traditional studies assume the symmetry in gaining the initiative to divide the offer. Wu pointed out that it is of importance and interest to break the symmetry in role assignment especially when the game is repeatedly played in a heterogeneous population. They consider an adaptive role assignment: whenever the split fails, the two players switch their roles probabilistically. The results show that this simple feedback mechanism proves much more effective at promoting fairness than other alternatives. More importantly, this mechanism is robust to external noise such as the ‘trembling hand’ effect. In other words, the system may transiently deviate from, while can be quickly pulled back to the state of fair split. The role switching can be realized by players’ spontaneous willingness, or enforced by the third-party’s supervision.

Furthermore, results demonstrate that whenever individuals of large social ties gain more chance to be the first-mover in splitting the offer, they gradually reduce their giving rate by tempting a fraction of the partners to accept, driving the system towards the sub-game perfect equilibrium: the first-movers claim almost all of the offer. However, endowing sparsely-connected individuals more chance to divide the offer, the giving and asking rate can be extracted out of the perfect equilibrium. These findings are instructive in resource allocation, firm management, institutions regulation and so on.  

The study was supported by National 973 Program (2012CB821203) and NSFC (61020106005 and 10972002).

The fairness, the egalitarianism and the average payoff of the system as a function of the role switching rate.