The Impact of Managerial Opportunism on Earnings Reliability
Reputation, incentives, and opportunism (with Christian Hilbe)
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Transcript of Reputation, incentives, and opportunism (with Christian Hilbe)
Public Good game with positive or
negative incentives
Two players game for simplicity and to compare with Rand, Armao, Nakamaru and Ohtsuki (2010)
Public goods with punishment
)mostly and
, assume (we
cost at fine :punishment a
:player -co toincentivedeliver can player Second,
ccost at
player -co tob help providecan player First,
bc
Opportunistic Players
P] ,[O N], ,[O P], ,[O N],,[O strategies 4
Nor P stage, secondIn
Oor O stage,first In
)1:(
P)or (Nplayer -co of typeknowsplayer that prob.
DDCC
DC
Role of reputation in Punishment
Punishment as deterrent
Revenge economically useful
Revenge is sweet (=fitness-enhancing)
Anger is loud
Role of reputation in Punishment
Punishment as deterrent
Revenge economically useful
Revenge is sweet (=fitness-enhancing)
Anger is loud
Barclay (‚Don‘t mess with the enforcer‘)
Role of reputation in Punishment
Punishment as deterrent
Revenge economically useful
Revenge is sweet (=fitness-enhancing)
Anger is loud
Barclay (‚Don‘t mess with the enforcer‘)
Non-altruistic punishment
Role of reputation in Punishment
Punishment as deterrent
Revenge economically useful
Revenge is sweet (=fitness-enhancing)
Anger is loud
Barclay (‚Don‘t mess with the enforcer‘)
Non-altruistic punishment
Kurzban et al, Suter: ‚Audience effects‘
Similarity with Ultimatum
• Ultimatum with orwithout reputation
• (Fehr andFischbacher, Nature 2004)
The feeling of being watched
‚Conscience…the nagging feeling that someone may be watching‘
(Mencken)
Public goods with reward
for efficiency low
,
cost at benefit
:reward adeliver can player Second,
bccost at
player -co tob help providecan player First,
bc
Reward and Punishment
defects) O doubt; of casein cooperates O(
O and O types two:players ticOpportunis
AllD and AllC players nalUnconditio
:stagefirst in types4
N :neither do I,both do P,Punish R, Reward
:stage secondin moves 4
:Extension
DC
DC
Results:
],[],[],[ON][AllD,
:smaller for
],[],[],[ON][AllD,
:larger for pathway
if catalyses ],[
wins],[
D
D
POROR
POPON
bRO
PO
CC
CD
D
C
Antisocial Punishment
)(with
nothingpunish :N
(spite) everythingpunish : S
l)(antisocian Cooperatiopunish :A
Defectionpunish :P :stage Second
O ,O AllD, AllC, :stageFirst DC
Antisocial punishment
• Rand, Armao, Nakamaru, Ohtsuki (JTB 2010)
• Localised interaction:
Social life in groups of N+1 individuals
(introduces spite effects)
Modified replicator equation (or z-dynamics)
Antisocial Punishment
high nor too
low oneither to fine if evolves ],O[
) (if Sor
) (if Nby dominated weakly isA
dominated weakly AllD AllC,
C P
N
N