Cooperation for Better Competition: Group Formation Among Strategic Decision Makers

PASSCODE: 239319

The formation of groups plays an important role in the organization of individuals, often driven by the simultaneous need for cooperation and competition. Existing literature on the formation of groups in strategic settings includes frameworks such as coalitional games and signed network games. This thesis adds to this literature by explicitly modeling the benefit of belonging to a group in different settings, including intangible benefits such as group identity and reputation and more tangible benefits such as protection or access to resources. It also uses unique real-world datasets to help motivate the underlying mathematical model as well as to connect results from the game analysis to observations in the real world.

Specifically, this thesis studies two types of game models: (1) a simultaneous game to investigate how spatially distributed strategic agents decide to form groups; (2) a sequential game to investigate how strategic agents decide to “travel” together or form “flocks”. The first type of game captures the tradeoff between resource pooling and spatial cohesion. Several types of equilibria are introduced to study the structural stability of the groups. These structural properties provide novel perspectives in understanding the spatial and territorial relationships among a set of well-established criminal gang groups in Los Angeles County. The second type of game focuses on the tradeoff between cooperation and competition. A number of properties of the Subgame Perfect Equilibria are characterized and conditions that give rise to the emergence of a variety of grouping patterns are derived.

CHAIR: Professor Mingyan Liu