Geert Hofstede’s five-dimensional framework is widely used in social sciences and management scie... more Geert Hofstede’s five-dimensional framework is widely used in social sciences and management science to characterize cultures. It has been suggested to build culturally consistent agent characters based on his framework. This chapter stresses the relevance of culture and trust for trade, substantiates why a dimensional model offers a good basis for cultural differentiation of agents, and presents an approach to apply Hofstede’s model to develop culturally differentiated agents. The approach is based on knowledge acquisition on a dimension-by-dimension basis and a computational method to integrate the acquired knowledge. The approach has been applied to a multi-agent simulation of a trade game. It is instantiated for the processes of partner selection, negotiation, and the interaction between deceit and trust in trade.
Cross-cultural negotiation poses special challenges. In this paper an agent-based simulation mode... more Cross-cultural negotiation poses special challenges. In this paper an agent-based simulation model is presented that tackles these challenges. The model represents a trade network for a good with a hidden quality attribute. Agents have culture scripts that are based on Hofstede's dimensions of culture. They have visible group membership and status attributes that are used by their hidden cultural rules of behaviour. They bargain according to the ABMP bargaining model that has a utility function consisting of expected gain, quality, and risk. The paper presents the model and shows results of test runs. These test runs have face validity when compared with real negotiations. Formal tests of correspondence between the model and the trade game on which is it based have yet to be conducted. Extensions will make it a useful tool for training traders who engage in cross-cultural bargaining. The present version is helping to explain the behaviours of actors in international trade networks. It proves that Hofstede's dimensions can be used to generate agents that are believable negotiators.
We study the evolution of trading strategies in double auctions as the size of the market gets la... more We study the evolution of trading strategies in double auctions as the size of the market gets larger. When the number of buyers and sellers is balanced, Fano et al. [2] show that the choice of the order-clearing rule (simultaneous or asynchronous) steers the emergence of fundamentally different strategic behavior. We extend their work to unbalanced markets, confirming their main result as well as that allocative inefficiency tends to zero. On the other hand, we discover that convergence to the competitive outcome takes place only when the market is large and that the long side of the market is more effective at improving its disadvantaged terms of trade under asynchronous order-clearing. 1 Introduction Recently, Fano et al. [2] have studied the evolution of trading strategies for a double auction when the number of traders increases. They provide two main results. First, the competitive outcome obtains under different market architectures, provided that the size of the market is sufficiently large. Second, the choice of the order-clearing rule affects trading behavior. Under simultaneous order-clearing, marginal traders learn to act as price takers and make offers equal to their valuations or costs. Under asynchronous order-clearing, the intramarginal traders learn to act as price makers and make offers equal to the competitive price. An important feature of their study is the assumption that buyers and sellers populate the market in equal numbers; that is, the market is balanced. Moreover, using a simulative approach, agents' learning is modeled by means of a genetic algorithm. Curiously enough, although it is well known that "traders on the long side of a market wind up holding the short end of the stick" [8], the agent-based literature has paid scant attention to the study of unbalanced markets; however, see Gode and Sunder [5] or Anufriev et al. [1] for the special case of one seller, one intramarginal buyer and n extramarginal buyers. This paper explores what happens in double auctions when we remove the assumption that the market is balanced. A second methodological contribution is that we model agents' learning by means of genetic programming, extending the reach of genetic algorithms. We confirm and extend the main results in Fano et al. [2] when the market is balanced.
This paper presents an approach to formalize the influence of culture on the decision functions o... more This paper presents an approach to formalize the influence of culture on the decision functions of agents in social simulations. The key components are (a) a definition of the domain of study in the form of a decision model, (b) knowledge acquisition based on a dimensional theory of culture, resulting in expert validated computational models of the influence of single dimensions (c) a technique for integrating the knowledge about individual dimensions. The approach is developed in a line of research, studying the influence of culture on trade processes. Trade is an excellent subject for this study because it is ubiquitous, relevant both socially and economically, and often cross-cultural in a globalized world.
Studies in the philosophy of sociality, Oct 11, 2013
For the study of complex social processes, both gaming simulation and multi-agent simulation have... more For the study of complex social processes, both gaming simulation and multi-agent simulation have been proposed as research methods. The combination of gaming and multi-agent simulation has proved useful for the formulation of theories underlying trade network processes. However, validation remains a problematic issue in that type of research. Two important sources of difficulties are the sensitivity of gaming simulations to the participants’ cultural background and the complexity of the agent model. The sensitivity to culture may be managed by incorporating it in the agent model. The complexity of the agent model may be managed by compositional process modeling. However, both solutions require additional validation. This chapter proposes a validation approach for a culturally adaptive, composed, process model.
Misunderstandings arise in international trade due to difference in cultural background of trade ... more Misunderstandings arise in international trade due to difference in cultural background of trade partners. Trust and the role it plays in trade are influenced by culture. Considering that trade always involves working on the relationship with the trade partner, understanding the behaviour of the other is of the essence. This presentation proposes to involve cultural dimensions in the modelling of trust in trade situations. When playing trading games with people from different parts of the world, different patterns of trade and trust emerge [1]. This presentation focuses on the influence of culture on traders' decision making. Hofstede's theory [2] forms the basis of our analysis. We first discuss dimensions of national culture, and then we show how decision rules for the trading agents are affected by culture. The model of trade processes is based on transaction cost economics [3]. It involves the processes of searching, bargaining, contracting, monitoring, and enforcing of contracts. Traders' perceptions, beliefs and decisions are influenced by cultural background. In the process of searching, culture sets preferences and limits to whom to do business with, and sets protocols for the way to open negotiations. When bargaining, culture defines what behavior is acceptable and what the role of personal relations and status differences is. The level of detail, conditions, and guarantees of contracts differ considerably across the world. So does the extent to which it is acceptable to use an opportunity to defect. Monitoring a contract and explicitly showing distrust is interpreted as an offense in some parts of the world, but is usual in other parts. When enforcing contracts, some cultures are more forgiving than others. Trust plays an important role in trade processes. However, it does not work in the same way across cultures. For instance, in some societies the emphasis is on interpersonal trust based on kinship; in others it is on interpersonal trust based on other markers; yet in others it is in impersonal institutions such as certification or law. Gorobets [4] demonstrated on the basis of a multi-agent simulation that economic systems based on trust as well as systems based on opportunism may be viable in different societies. Our work analyses the influence of culture on trade for each of Hofstede's dimensions, and formulates a set of rules for implementation in trading agents [5
This article presents two versions of a negotiation game, the LEMON CAR GAME, that is used to inv... more This article presents two versions of a negotiation game, the LEMON CAR GAME, that is used to investigate cross-cultural variation in negotiation behaviour. The game is about trading a secondhand car with a possible hidden defect. One version is a specific research setup destined to investigate face to face negotiation between participants with different acculturation on the cultural dimension of power distance. The other is a first Web-based version of the game. Both games are described. At the time of writing there are no experimental data yet.
ISPRS international journal of geo-information, Jun 28, 2022
This article is an open access article distributed under the terms and conditions of the Creative... more This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY
In cross-cultural business negotiation, culture is known to influence negotiation processes. As a... more In cross-cultural business negotiation, culture is known to influence negotiation processes. As a lens to study this effect we deployed the Lemon Car Game, an online negotiation game developed for this purpose (Hofstede et al. in: Proceedings of 39th international simulation and gaming association conference (ISAGA). Technologia, Kaunas, pp 39-46, 2009a; Hofstede et al. in: David, Sichman (eds) Multi-agentbased simulation IX, international workshop, MABS 2008, revised selectedpapers, LNAI 5269. Springer, Berlin, pp 1-16, 2009b). In this article we report the results from the game, obtained from over 800 players from more than 70 countries. We employ several complementary analyses in a mixed-methods approach. Our findings show that to make sense of the players' actions during negotiation, economic rationality falls short. A pan-cultural individual-level analysis of actions and stated intentions also fails to yield a coherent picture. Within countries, however, actions and intentions do cohere, as shown by an ecological country-level factor analysis, from which three factors emerge for the sellers at country level: trustworthiness, opportunism, and fairness. We conclude from these findings that, in this game, players are driven by what we call relational rationality: they are rational from the perspective of the social world in which they live, with interpersonal relationships weighing heavily. Relational rationality changes players' perspective of economic rationality, and thus their observed behaviour in negotiation. Based on this evidence, we extrapolate that relational rationality significantly influences negotiation processes in all cultures.
Geert Hofstede’s five-dimensional framework is widely used in social sciences and management scie... more Geert Hofstede’s five-dimensional framework is widely used in social sciences and management science to characterize cultures. It has been suggested to build culturally consistent agent characters based on his framework. This chapter stresses the relevance of culture and trust for trade, substantiates why a dimensional model offers a good basis for cultural differentiation of agents, and presents an approach to apply Hofstede’s model to develop culturally differentiated agents. The approach is based on knowledge acquisition on a dimension-by-dimension basis and a computational method to integrate the acquired knowledge. The approach has been applied to a multi-agent simulation of a trade game. It is instantiated for the processes of partner selection, negotiation, and the interaction between deceit and trust in trade.
Cross-cultural negotiation poses special challenges. In this paper an agent-based simulation mode... more Cross-cultural negotiation poses special challenges. In this paper an agent-based simulation model is presented that tackles these challenges. The model represents a trade network for a good with a hidden quality attribute. Agents have culture scripts that are based on Hofstede's dimensions of culture. They have visible group membership and status attributes that are used by their hidden cultural rules of behaviour. They bargain according to the ABMP bargaining model that has a utility function consisting of expected gain, quality, and risk. The paper presents the model and shows results of test runs. These test runs have face validity when compared with real negotiations. Formal tests of correspondence between the model and the trade game on which is it based have yet to be conducted. Extensions will make it a useful tool for training traders who engage in cross-cultural bargaining. The present version is helping to explain the behaviours of actors in international trade networks. It proves that Hofstede's dimensions can be used to generate agents that are believable negotiators.
We study the evolution of trading strategies in double auctions as the size of the market gets la... more We study the evolution of trading strategies in double auctions as the size of the market gets larger. When the number of buyers and sellers is balanced, Fano et al. [2] show that the choice of the order-clearing rule (simultaneous or asynchronous) steers the emergence of fundamentally different strategic behavior. We extend their work to unbalanced markets, confirming their main result as well as that allocative inefficiency tends to zero. On the other hand, we discover that convergence to the competitive outcome takes place only when the market is large and that the long side of the market is more effective at improving its disadvantaged terms of trade under asynchronous order-clearing. 1 Introduction Recently, Fano et al. [2] have studied the evolution of trading strategies for a double auction when the number of traders increases. They provide two main results. First, the competitive outcome obtains under different market architectures, provided that the size of the market is sufficiently large. Second, the choice of the order-clearing rule affects trading behavior. Under simultaneous order-clearing, marginal traders learn to act as price takers and make offers equal to their valuations or costs. Under asynchronous order-clearing, the intramarginal traders learn to act as price makers and make offers equal to the competitive price. An important feature of their study is the assumption that buyers and sellers populate the market in equal numbers; that is, the market is balanced. Moreover, using a simulative approach, agents' learning is modeled by means of a genetic algorithm. Curiously enough, although it is well known that "traders on the long side of a market wind up holding the short end of the stick" [8], the agent-based literature has paid scant attention to the study of unbalanced markets; however, see Gode and Sunder [5] or Anufriev et al. [1] for the special case of one seller, one intramarginal buyer and n extramarginal buyers. This paper explores what happens in double auctions when we remove the assumption that the market is balanced. A second methodological contribution is that we model agents' learning by means of genetic programming, extending the reach of genetic algorithms. We confirm and extend the main results in Fano et al. [2] when the market is balanced.
This paper presents an approach to formalize the influence of culture on the decision functions o... more This paper presents an approach to formalize the influence of culture on the decision functions of agents in social simulations. The key components are (a) a definition of the domain of study in the form of a decision model, (b) knowledge acquisition based on a dimensional theory of culture, resulting in expert validated computational models of the influence of single dimensions (c) a technique for integrating the knowledge about individual dimensions. The approach is developed in a line of research, studying the influence of culture on trade processes. Trade is an excellent subject for this study because it is ubiquitous, relevant both socially and economically, and often cross-cultural in a globalized world.
Studies in the philosophy of sociality, Oct 11, 2013
For the study of complex social processes, both gaming simulation and multi-agent simulation have... more For the study of complex social processes, both gaming simulation and multi-agent simulation have been proposed as research methods. The combination of gaming and multi-agent simulation has proved useful for the formulation of theories underlying trade network processes. However, validation remains a problematic issue in that type of research. Two important sources of difficulties are the sensitivity of gaming simulations to the participants’ cultural background and the complexity of the agent model. The sensitivity to culture may be managed by incorporating it in the agent model. The complexity of the agent model may be managed by compositional process modeling. However, both solutions require additional validation. This chapter proposes a validation approach for a culturally adaptive, composed, process model.
Misunderstandings arise in international trade due to difference in cultural background of trade ... more Misunderstandings arise in international trade due to difference in cultural background of trade partners. Trust and the role it plays in trade are influenced by culture. Considering that trade always involves working on the relationship with the trade partner, understanding the behaviour of the other is of the essence. This presentation proposes to involve cultural dimensions in the modelling of trust in trade situations. When playing trading games with people from different parts of the world, different patterns of trade and trust emerge [1]. This presentation focuses on the influence of culture on traders' decision making. Hofstede's theory [2] forms the basis of our analysis. We first discuss dimensions of national culture, and then we show how decision rules for the trading agents are affected by culture. The model of trade processes is based on transaction cost economics [3]. It involves the processes of searching, bargaining, contracting, monitoring, and enforcing of contracts. Traders' perceptions, beliefs and decisions are influenced by cultural background. In the process of searching, culture sets preferences and limits to whom to do business with, and sets protocols for the way to open negotiations. When bargaining, culture defines what behavior is acceptable and what the role of personal relations and status differences is. The level of detail, conditions, and guarantees of contracts differ considerably across the world. So does the extent to which it is acceptable to use an opportunity to defect. Monitoring a contract and explicitly showing distrust is interpreted as an offense in some parts of the world, but is usual in other parts. When enforcing contracts, some cultures are more forgiving than others. Trust plays an important role in trade processes. However, it does not work in the same way across cultures. For instance, in some societies the emphasis is on interpersonal trust based on kinship; in others it is on interpersonal trust based on other markers; yet in others it is in impersonal institutions such as certification or law. Gorobets [4] demonstrated on the basis of a multi-agent simulation that economic systems based on trust as well as systems based on opportunism may be viable in different societies. Our work analyses the influence of culture on trade for each of Hofstede's dimensions, and formulates a set of rules for implementation in trading agents [5
This article presents two versions of a negotiation game, the LEMON CAR GAME, that is used to inv... more This article presents two versions of a negotiation game, the LEMON CAR GAME, that is used to investigate cross-cultural variation in negotiation behaviour. The game is about trading a secondhand car with a possible hidden defect. One version is a specific research setup destined to investigate face to face negotiation between participants with different acculturation on the cultural dimension of power distance. The other is a first Web-based version of the game. Both games are described. At the time of writing there are no experimental data yet.
ISPRS international journal of geo-information, Jun 28, 2022
This article is an open access article distributed under the terms and conditions of the Creative... more This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY
In cross-cultural business negotiation, culture is known to influence negotiation processes. As a... more In cross-cultural business negotiation, culture is known to influence negotiation processes. As a lens to study this effect we deployed the Lemon Car Game, an online negotiation game developed for this purpose (Hofstede et al. in: Proceedings of 39th international simulation and gaming association conference (ISAGA). Technologia, Kaunas, pp 39-46, 2009a; Hofstede et al. in: David, Sichman (eds) Multi-agentbased simulation IX, international workshop, MABS 2008, revised selectedpapers, LNAI 5269. Springer, Berlin, pp 1-16, 2009b). In this article we report the results from the game, obtained from over 800 players from more than 70 countries. We employ several complementary analyses in a mixed-methods approach. Our findings show that to make sense of the players' actions during negotiation, economic rationality falls short. A pan-cultural individual-level analysis of actions and stated intentions also fails to yield a coherent picture. Within countries, however, actions and intentions do cohere, as shown by an ecological country-level factor analysis, from which three factors emerge for the sellers at country level: trustworthiness, opportunism, and fairness. We conclude from these findings that, in this game, players are driven by what we call relational rationality: they are rational from the perspective of the social world in which they live, with interpersonal relationships weighing heavily. Relational rationality changes players' perspective of economic rationality, and thus their observed behaviour in negotiation. Based on this evidence, we extrapolate that relational rationality significantly influences negotiation processes in all cultures.
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