Game Theory vs Psychology
Recently in class, we learned about a fundamental concept in game theory known as Nash equilibrium, which essentially refers to when the decisions of the players of a game are such that there is no impetus for anyone to change their strategy because he/she would not be able to benefit. There are many games where […]
Reject Unequal Pay: Payoffs as relative quantities
Links: http://www.jstor.org/stable/pdf/172653.pdf In the video shown above, two monkeys, side by side, are asked to perform the same task. As a reward for completing said task one is given a cucumber and the other a grape. When the first monkey is given a cucumber as a result of completing the task, he eats it, satisfied […]
Game Theory in World War 2
Game Theory is used around us from financial markets to board game strategy. It provides us with the means of quantifying decisions and their outcomes as well as justifying those decisions. Although the game theory that we have looked at so far in class have revolved around harmless hypothetical situations, game theory has been heavily […]
Dividend Signaling: Non-Cooperative Game Theory
In all public companies, the manager of the firm, whether it be the Board of Directors, or a sole CEO of the company must define and determine its dividend policy. There are two methods managers can return value back to their shareholders: by buying back shares or distributing dividends, each with different tax policies and […]
Rock Paper Scissors – How Social Networks Can Affects Mixed Strategies
It’s almost impossible to grow up in the United States without, at some point or another, playing the game “Rock Paper Scissors”. Its simplicity and elegance is matched only by its ubiquity on the playground. This children’s game proves to be a great window into game theory, as a game with no pure Nash equilibrium. […]
The Paradox of Braess’s Paradox
In class, we learned that networks of roads can be studied and modeled by using the same principles of game theory that we learned for games. Using this logic, we came to the counterintuitive conclusion that actually adding a road to a network of roads may actually have the effect of slowing traffic down, known […]
Game Theory in the context of Epidemics
One of the fundamental assumptions of game theory is that each player is rational or is a “rational decision maker” (RDM). Generally this means that each player is looking to maximize their payoff in a given game. We have exclusively been looking at games with complete information: each player knows the exact expected payoff of […]
Cheating on a Game Theory Exam
UCLA Professor Peter Nonacs teaches a Behavioral Economics class and he allowed his students to cheat on his Game Theory Exam. According to Professor Nonacs, he told his class “the Game Theory exam would be insanely hard.” And he also stated that because the exam will be so hard he would allow them to cheat. […]
The “Worst” Call in Super Bowl History
In Super Bowl 50, a drive that would have likely gone down as one of the best comeback drives in Super Bowl History was ended by arguably the best plays in Super Bowl History. After getting the ball with 2:00 minutes left in the fourth quarter, the Seattle Seahawks trailed the New England Patriots 28-24. After […]
Seoul and Braess’ Paradox
The Braess’ Paradox is, at first sight, very counter-intuitive. It reasons why a seeming improvement to a road network can actually worsen the traffic situation. There has been numerous cases, such as the construction of the Big Dig in Boston, where this phenomenon can be observed – a phenomenon in which the addition of a road to […]
« go back — keep looking »