A refined utility function for modeling “me” vs. “us” allocation in a sequential group decision process
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Considering the psychological aspects of altruism and reciprocity in strategic interactions, we propose using the Cobb–Douglas utility function to refine standard utility functions as a weighted product of the player’s utility (“me” factor) and the jointly utility of players (“us” factor). We model an altruism willingness function to define the strategic allocation within “me” vs. “us” based on perceived kindness of the counterparts during the past agreements and unconditional altruism. Numerical examples are presented to show how the model represents the sequential group decision process of players with heterogeneous altruism profiles.
KeywordsMulti-criteria Vector games Nash equilibrium Dynamic games Cobb–Douglas function
Mathematics Subject Classification91B10 91B16
The authors acknowledge the anonymous reviewers for their significant suggestions for the improvement of this paper to the present version.
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