Saturday, July 18, 2009

Theory of the Games - A Criminal Research on Organized Crime

Some decades after the formulation of John von Neumann, there is today in the resumption of the scientific research involving the application of the theory of games, whose base is the mathematics that aims to explain and quantify all forms of human interaction and living beings in general.

Its object of study includes areas of biology, economy, the law, the psychology, the philosophy, that of computing, that of linguistics and political science. Two French, Augustin Cournot and Bertrand Joseph, in 1838, created the theory of games.

A " Cournot "model applied to the economy the argument of the strengthens market, as a mediator of all conflicts; Bertrand built something similar, but took a different conclusion: The need of state intervention to regulate the oligopoly.

A century later, these studies would be taken up by the mathematician John von Neumann, who created the Minimax theorem of: "My most of its minimum is equal to its minimum of my most" . Von Neumann pointed out that in highly competitive situations, the random behavior may be the best strategy, created the "zero sum game of" whose principle is to winning everything, the loser nothing, the book The theory of games and economic behavior, published in 1944, whose co-author was the German economist Oskar Morgenstern.

The Theory of Games and Economic Behavior had a serious limitation, which was really to focus on zero-sum games,e.g. interactions in which a gain for one player meant a loss equivalent to another player.

The paradigm of Von Neumann was the game of poker, which account exactly for the bluff and cheating, leaving the door for the initiative, creativity, intelligence and skill of each player, their inferences about the scene beyond the scope generated by chance.

The theoretical tools that allowed "analyze a greater variety of models of strategic interaction would be produced, from 1950, by John F. Nash Jr., John C. Harsanyi and Reinhard Selten, which would reward those three with the Nobel in economics in 1994.

The contribution of John Forbes Nash Jr., the American mathematician who was a disciple of Von Neumann, was the creation of a theorem which takes its name.

Nash developed a concept of equilibrium for models of games, which is not restricted only to the zero-sum games. This notion would be known as' balance of Nash.

The Hungarian economist John Harsanyi developed a model to deal with games with asymmetric information. Many times, some players have the inside information in relation to the other on some important aspect of the game. In other words, we have a situation of asymmetric information.

Harsanyi developed a model to address this type of situation, which called the model of incomplete information. He showed that the concept of the Nash equilibrium could be extended to the models of incomplete information.
A third and fundamental contribution was the German mathematician and economist Reinhard Selten. He was responsible for a refinement in the concept of balance - it is known as the perfect balance in sub games means that a particular strategy to be taken as a perfect balance in sub games must be considering all the possible ramifications of the game.

This refinement (which leads to a more restrictive notion of balance than the "balance of Nash") was of fundamental importance in strategic analysis, because in games that involve commitments and threats, which allowed discrimination commitments and threats were plausible and what not were.

There are several possibilities of classifying types of games that move the business of organized crime in their constant symbiotic movement on the state.

However, a trace is essential: the use of inside information in relation to other players, on any important element of the game which results in a situation of asymmetric information.

In general, by having a strong control over the strategic game, organized crime uses the gun in an attempt to bill when the awards and leave the state with the leftovers: it is estimated that only 10% of drugs seized is produced. In other words, the criminal organization performs the full cycle of business from production to sale directly to consumers, then the different stages of the process of "washing", by the integration of "dirty capital" to the legal economy. The role of information in the theory of games is well defined.

You could say that an essential condition for the theory of games is the use of information by staff, or players involved in competition.

This information is of four types: complete, incomplete, simultaneous and sequential. ". The author explains the types of information:

(a) Complete: contains all the knowledge needed to take a particular decision. That is, all players have the same information, including the array of awards,

(b) Incomplete: it does not contain all the necessary knowledge,

(c) Simultaneously is only revealed after the decision of the players, (d) sequential: only is known as one player after the intervention of another.

From the information, it has also two other types:

a) Symmetrical: the players have access to such information, in equal conditions for making its decisions,

b) Asymmetric: two or more players have different information, or is one that has the most complete information tends to win the dispute.

In general, the games are considered: cooperative and non-cooperative (or competitive). The rules governing the behavior of the players are different: The cooperative games are those in which it is possible in the planning of strategies by all players. The non-cooperative games are those where it is not possible to plan strategies together, and these are the most common.

Doria and Doria (1999) describe a typical situation in which two offenders are caught by police and questioned separately.

Outlining the range of alternatives has been:

(a) Fairness: both decided not to speak, and are released,

(b) Dual culture: both speak and take penalty of five years imprisonment,

(c) Impeachment Unilateral: only one decision tells the truth, the informer is released and the other sentenced to ten years imprisonment.

You can express the "dilemma" through an array of prizes, as follows: Nets universe theory some fundamental concepts, which analyze situations involving interactions among rational agents, whose strategic behavior can be considered formally as a game:

a) Formal model: This means that the theory of games involves technical description and analysis, or, in other words, there are rules to provide pre and study a game,
b) Interactions: The actions of each agent, standing alone, affect the others. (...) We like games that involve interaction processes between actors, c) Agent: Any individual or group of individuals with the capacity to affect the decision to others: an individual agent can be alone, as in the case of the employee who decides whether or will not request an increase to the boss,
d) Rationality: Assume that agents are rational means believing that individuals employ the most appropriate means to that target goals, whatever these goals,
e) Strategic Behavior: It is understood that each player, to make its own decision, takes into account the fact that players interact with each other, and therefore its decision will have consequences on the other players and the decisions of others will have complex consequences for him.

In the category of strategic games belong to the disputes involving the State, represented by public officials, and organized crime - in their different hues, sections and related products. Indeed, "situations that are involved in gender world economic enterprise, where the interdependence between business, government and consumers demand the consideration of their interdependence.

Rather than create an array of pay-off (prizes) representing the symbiotic relationship between organized crime and state (in its various forms of social representation), the application of the theory of games, the type of strategic non-zero sum in general non-cooperative, sequential and involving some kind of coalition (tacit agreement) has to do with this possibility: elucidate the behavior of the major criminal players, the time at which points in the direction of another treatment.

Criminal organizations in its action against the democratic society and their national states should be treated like players who act strategically, and execute their actions in the exact size of a "State", but do not constitute a "parallel state" as the common sense consolidated through the media believes.

The rationale is needed as a concept central to the theory of games. However, it is possible to say that the operators of organized crime along rational act? How far from the action itself is also qualified by the state human rationality and politics? Not all people, or organizations, if a component in a rational way, e.g. to employ the means available in an appropriate manner to its purposes.

The highest level of control of criminal acts in a strictly rational, from a business point of view typically. In the levels immediately below the 'hierarchy', however, the action is dictated by elements.

The universe of transcontinental organized crime is akin to a jungle. The only law is respected vendetta. No word committed, no signed contract has the lowest chance to last. Many public killings, mutilations and discrete deletions that constitute the fabric of daily activity of cartels can only be explained by personal hatred, love the passion, the vanity, the desire for revenge or a desire to be delusional.

Conditions of the game were established by Ken Binmore (1992), one of the most important theorists in today's game:

1) The game (e.g. the representation of the process of strategic interaction) is relatively simple;
2) The players played the game many times before, and so were able to learn through trial; and error;
3) The incentives to play well (e.g.rational) are appropriate.

However, the characterization of strategy games in RAPOPORT (1998) by combining three distinct elements, is the path to the desired application. They are:

(a) conflict of interest,

(b) number of alternatives at each stage of the situation,

(c) people (or agents) in a position to assess the consequences of their choices.

From the viewpoint of a possible pattern of behavior from the perspective of building an array of pay-off giving an account of the crime & state, should it be considered such factors. However, what would then be the strategy when it comes to theory of games? It is a technical term the precise meaning. Means a full program made by a player before the game starts (let's say he delivered to an arbitrator), stating what will each conceivable situation in which they find in the course of the game.

In short, there is another definition: "a strategy is a plan of action that specifies, for a player, what action to take in all the times that will to decide what to do.

Resuming the discussion of the central concept, that of rationality, there is the perception of RAPOPORT complementary to a thought of Fiano (2004): We call an individual "rational" when it takes into account the possible consequences of each course of action that is before him, when a perceived order of preference between the consequences and therefore chooses the line of action which in his estimation, could lead to the preferred result. Sometimes the result will depend not only on the line of action to be chosen by the individual but also the lines of action that others choose, and on which he has no control.

Individual must, as a first step, make an initial hypothesis about how best to act to achieve their goals.
Defined the initial hypothesis, it should seek to collect information to test the validity of this hypothesis. In the process of collecting information this hypothesis may be valid, be corrected, or even be replaced by another more appropriate hypothesis, according to information obtained.

Finally, based on the assumption that final results from the collection of information, the agent chooses the best action to take.

There are three types of behavior that lead to non-rationality:

(a) when the guide this collection of information is the compass of emotions, comes into play unconscious patterns of behavior that are imposed on the ability of the agent of choice - resulting in the common sense identifies as "acting without thinking";

(b) when the vector of choice is the tradition, e.g. the way that all "always acted" may coincide with the rational behavior, to "break with tradition" has cost more than the possible benefits;

(c) a third type of behavior is guided by the values that cultivated by agent, or when he "open hand" of a particular choice in the name of an imperative ethical, religious or political - to "do what must be done."

In none of the three types of non-rational behavior there is no trace of strategic interaction among players: In the case of emotional behavior, there is no strategic interaction because the player does not consider the information necessary for decision making and thus acting without knowing the possible responses of other players (or their probabilities).

The need for integrated and coordinated institutional articulation remains vital decision as to the possibility of minimum balance in favor of the state and society, in dispute with organized crime in its various levels and aspects.

In another perspective, it establishes a difference between rational attitude and luck, considering that "a game between two real people, not to have the right to assume that B make their choices taking the chance. The presumption of the theory of games is that players are rational. Player A must therefore assume that B thinks exactly like himself: if I do this and do the things, what happens next. " The representation of a game is summarized in a matrix of premiums (pay-off).

There are two typical forms: the normal, such as that set up the "prisoner's dilemma" and the extensive or extended, also known as "the tree games" - which will be detailed in the next item.

Is a table in which the strategies of a player are listed in lines and strategies of the other players are listed in columns. The possible actions are "renewing" and "not renewing" in the classic "game of the banks."
To talk in theory of games today is mister discussing another concept paradigmatic: the balance of Nash. Succinctly, "it says that a combination of strategies is a Nash equilibrium of when each strategy is the best possible response to the strategies of other players, and this is true for all players. The formulation of the mathematician John Nash would solve a major impasse in the development of the theory of games: games like shape whose sum is different from zero.

The array of awards below illustrates the rewards of each country, generated from the option price of each. Note that "rewards" can be construed as losses (loss in any trade) of the two countries. The values are estimated in thousands of dollars. The games foreign trade in a brief analysis is that, if both countries adopt low tariffs the final result will be a surplus of $ 1.7 million dollars for each. If both adopt a high tariff policy, this result is reduced, so fair to the home of the $ 800 thousand dollars for each, positive. However, if one of them (Country "A" or "B") adopting a high rate, while others take the lowest percentage, the country that adopts the highest level pricing $ 2.3 million profit at the expense of another, that ends with a deficit of $ 700 thousand. The conclusion is that, no matter the decision by the country B, country A should always adopt high tariff on imports from B. The high rate strategy is the best response for both country A to country B as to any strategy that the other choice.

The Nash equilibrium of this game is given, then the combination of strategies (high-rate, high rate). What is shown in the example of the game of trade is that of Nash equilibrium does not necessarily mean the best possible result.

Indeed, the concept of Nash equilibrium of only requires that each player make the best strategic option or action against the other, without discussing in advance the nature of resulting interaction. Accordingly, there is no reason to expect that the outcome is Pareto optimal: it will depend on the nature of the interaction between the players

In almost all the higher forms of play, the elements of repetition and alternation (as in the refrain) are as the yarn and fabric of the object. The description and identification of patterns of organized crime, from the conceptual tools of the theory of games, seem to be fairly anchored in the latter feature: repetition as essential quality.

Organized crime has always, despite its mutant trait, accommodate their actions in a certain modus operandi that is recognized by its agents and operators. Near the end of the process, the schemes of money laundering, this pattern can be identified as synonymous with credibility in each internal organization.

Moreover, such a procedure just offering the other side to the organs of intelligence and prosecution of the State, an eternal game of hunting and hunter.

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