Cooperative Behavior In Multi-participants Project Team Incorporating Bounded Rationality, Reciprocity, And Altruism

Modern technologies introduced to enhance efficiency and increase profit in joint projects have become considerably more common and at the same time more complex, and the activities of the agents (e.g. organizations, companies) who possess differential knowledge about these technologies have become progressively more interdependent. With few exceptions, the time when a single agent has proved sufficient for the technology requirements of a project is over; joint projects that require heterogeneous agents with differential knowledge of technology and multiple skills have become the norm. The multi-participant model is clearly the future form of project organization. But the increase in the number of participants who jointly contribute to the success of the project necessarily has its costs:it increases the difficulty of the project manager to supervise them. Based on this observation, it is important to understand the mechanisms that enhance cooperation, and consequently increase efficiency, in multi-participant project teams.Applying the methodology and procedures of economic research, the present dissertation focuses on the cooperation problem in multi-participant project teams. In contrast to previous approaches that endow the multiple agents with full rationality, the thesis makes the weaker, and more realistic, assumption that the agents’rationality is bounded, that they are altruistic to some extent, and that they possess preference for reciprocity. Based on the present literature in behavioral economics, the present study incorporates altruism and reciprocity preference into the team members’utility functions. It then examines how social preferences influence the behavior of individual agents, as well as the team performance. Additionally, using the tools of evolutionary game theory, this study also analyzes the dynamics of change in the social preferences of project participants as they gain more experience with the project. All of this is done in an attempt to provide theoretical guidelines and strategic suggestions to multi-participant projects in order to enhance the cooperative behavior of the agents.Firstly, I begin with a statement of the problem and elaborate on its theoretical and practical aspects. This is followed by a description of the purpose of the dissertation and the methods it employs. Secondly, using evolutionary game theory, I propose a cooperative model of multi-participant project team behavior under bounded rationality. Following that, the study analyzes in detail the impact of the nature of project and the contribution per unit effort of team members on team performance and choice of strategies.Thirdly, this study discusses the impact of altruism and reciprocity preference on the agent’s strategy, team performance, and optimal profit share. The joint effects of cooperative strategy choices and reciprocity preferences are discussed, as well as the interplay of altruism and selfish preferences. An asymmetric evolutionary game model is proposed under the assumption that the agents may be classified into two categories according to their preference: members in one category have reciprocity preferences, and members in the other category do not. Agents in the first category are assumed to choose between two strategies:"reciprocity" and "non-reciprocity", whereas members in the second category have to choose between "cooperative" and "Non-cooperative" strategies. In the altruism-selfish game, I propose a symmetric evolutionary game model with finite populations, which assumes that the agents choose one of the following two strategies:"altruism" and "selfish".Noticing that in real life agents may not have only one kind of preference, this study goes one step further by studying the case where agents express altruism and have reciprocity preferences at the same time. An asymmetric evolutionary game model is constructed in order to study how altruism and reciprocity preferences interact with the cooperative strategies of the agents.The theoretical results of each part are all tested, and a case study is used to indicate the practical implications of this study. In the final section of the dissertation, the major theoretical results are summarized, and the limitations of the study as well as future directions research are pointed out.