Archive for the ‘game theory’ Category

“Exclusive Dealing: Before Bork, and Beyond”

August 15th, 2013 No comments

Mark Ramseyer and I have just posted a draft of a paper on monopoly law: “Exclusive Dealing: Before Bork, and Beyond”. Comments are welcomed. Here’s the abstract: Read more…

Categories: a.research, Antitrust, game theory, monopoly Tags:

How To Deal with a Powerful Oppressor: Frederick Douglass’s Story of Nelly

August 6th, 2013 No comments

From Frederick Douglass, My Bondage and My Freedom (1855):

There is no doubt that Nelly felt herself superior, in some respects, to the slaves around her. She was a wife and a mother; her husband was a valued and favorite slave. Besides, he was one of the first hands on board of the sloop, and the sloop hands — since they had to represent the plantation abroad — were generally treated tenderly. The overseer never was allowed to whip Harry; why then should he be allowed to whip Harry’s wife? Thoughts of this kind, no doubt, influenced her; but, for whatever reason, she nobly resisted, and, unlike most of the slaves, seemed determined to make her whipping cost Mr. Sevier as much as possible. Read more…

Categories: game theory, history, quotations Tags:

Dealing with Reporters on a Regular Basis

December 10th, 2009 No comments

Via Sailer, “The Michael Jordan/Tiger Woods Model: Why It Will Never Work With The Media,” . The title has it wrong, but the article is good. The strategy is to intimidate reporters and cut off access to any reporter who ever prints anything critical. The drawback is that if the athlete’s stock ever falls (e.g. Tiger Wood’s), even the hitherto friendly reporters hate him and have repressed stories to tell. The tradeoff can be worth it, though.

Categories: game theory, media, reputation Tags:

Flower Dutch Auction Clocks

October 14th, 2009 No comments
A Clock
The Room

I found these pictures of a Dutch auction at, which tells how you can go and visit such an auction in Aalsmeer. The best YouTube video of it I found is here.

Categories: auctions, game theory Tags:

Game Theory Notes on Subgame Perfectness and the Centipede Game

September 30th, 2009 No comments

I’ve just written up notes for my game theory class on a paradox of
sequential rationality
and on

the Centipede Game

Categories: game theory Tags:

The Blue-Eyed Islander Puzzle

September 5th, 2009 No comments

Here is a well-known puzzle that I will probably be teaching next week. An island starts with 2 blue-eyed people and 48 green-eyed, but the people do not know these numbers. If a person ever decides his eyes are blue, he must leave the island at dawn the next day. There are no mirrors and people may not talk about eye color, but they see each others’ faces.

What will happen? — nobody leaves.

Now an outsider comes to the island and says, “At least one of you has blue eyes”.

The next dawn, nobody leaves, but on the second dawn, both blue-eyed people leave.

The reason: Both blue-eyed people realize there are either 1 or 2 blue-eyed people. When nobody leaves on the first dawn, each realizes that there must be 2– and he is one of them.

Categories: game theory Tags:

Saul Alinsky: Rules for Radicals

July 5th, 2009 No comments

Saul Alinsky’s Rules for Radicals, via a Canadian site: (I have boldfaced the most noteworthy)

Rule 1: Power is not only what you have, but what an opponent thinks you have. If your organization is small, hide your numbers in the dark and raise a din that will make everyone think you have many more people than you do.

Rule 2: Never go outside the experience of your people.
The result is confusion, fear, and retreat.

Rule 3: Whenever possible, go outside the experience of an opponent. Here you want to cause confusion, fear, and retreat.

Rule 4: Make opponents live up to their own book of rules. “You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity.”

Rule 5: Ridicule is man’s most potent weapon. It’s hard to counterattack ridicule, and it infuriates the opposition, which then reacts to your advantage.

Rule 6: A good tactic is one your people enjoy. “If your people aren’t having a ball doing it, there is something very wrong with the tactic.”

Rule 7: A tactic that drags on for too long becomes a drag. Commitment may become ritualistic as people turn to other issues.

Rule 8: Keep the pressure on. Use different tactics and actions and use all events of the period for your purpose. “The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition. It is this that will cause the opposition to react to your advantage.”

Rule 9: The threat is more terrifying than the thing itself. When Alinsky leaked word that large numbers of poor people were going to tie up the washrooms of O’Hare Airport, Chicago city authorities quickly agreed to act on a longstanding commitment to a ghetto organization. They imagined the mayhem as thousands of passengers poured off airplanes to discover every washroom occupied. Then they imagined the international embarrassment and the damage to the city’s reputation.

Rule 10: The price of a successful attack is a constructive alternative. Avoid being trapped by an opponent or an interviewer who says, “Okay, what would you do?”

Rule 11: Pick the target, freeze it, personalize it, polarize it. Don’t try to attack abstract corporations or bureaucracies. Identify a responsible individual. Ignore attempts to shift or spread the blame.

According to Alinsky, the main job of the organizer is to bait an opponent into reacting. “The enemy properly goaded and guided in his reaction will be your major strength.”

Some quotes:

We had to construct experience for our students. Most people do not accumulate a body of experience. Most people go through life undergoing a series of happenings, which pass through their systems undigested. Happenings become experiences when they are digested, when they are reflected on, related to general patterns, and synthesized. (p. 68)

That idea is important. It explains the rate at which people gain wisdom– or remain as foolish as they were in their youth. People who analyze when young will gain on their non-analytic friends, so we would expect ability and income gaps to rise with age.

Most people have gone to church and mouthed Christian doctrines, and yet this is really not part of their experience because they haven’t lived it. Their church experience has been purely a ritualistic decoration…

[Of someone who found God and tried giving away his money to bums.] Our friend attempting to emulate Christian life and emulate St. Francis of Assisi found that he could only do so forty minutes before being arrested by a Christian police officer, driven to Bellevue Hospital by a Christian ambulance doctor, and pronounced non compos mentis by a Christian psychiatrist. Christianity is beyond the experience of a Christian-professing-but-not-practicing population. …

I’ve been asked, for example, why I never talk to a Catholic priest or a Protestant minister or a rabbi in terms of the Judaeo-Christian ethic or the Ten Commandments or the Sermon on the Mount. I never talk in those terms. Instead, I approach them on the basis of their own self-interest, the welfare of their Church, even its physical property.

If I approached them in a moralistic way it would be outside their experience, because Christianity and Judaeo-Christianity are outside of the experience of organized religion. … The moment I walked out they’d call their secretaries in and say, “If that screwball ever shows up again, tell him I’m out.”

Communication for persuasion, as in negotiation, is more than entering the area of another person’s experience. It is getting a fix on his main value or goal and holding your course on that target. (p. 89)

This last passage is a devastating criticism of Christianity in America. Alinsky would have applied his rule of making people play by their own rules if he thought it would work. He didn’t, with Christian pastors. He doubts they can even conceive of genuine Christianity.

Categories: game theory, living, teaching, thinking Tags:


April 9th, 2009 No comments

On the radio I heard NPR interview Gen. Tom Wilkerson on piracy in the Indiana Ocean. Somali pirates just attacked a U.S.-flag cargo vessel. The crew disabled the ship, and the captain volunteered to go away with the pirates as a hostage. He is now in a little boat with 4 pirates, closely watched by the US Navy.

Gen. Wilkerson pointed out that navy patrols aren’t going to stop this in advance– we don’t know which ships pirates are in till they attack. He said we should go after their land bases.

Every officer in the armed forces needs to read Schelling’s Strategy of Conflict. The solution here is game theory. Here are some possibilities:

1. Tell the pirates that unless they the hostage remains alive they will all be killed, but otherwise their lives will be spared. Then attack them. See if they kill the hostage then or not. Tell them in the initial offer that even if they do not surrender the hostage, so long as nobody shoots him while the US is attacking, their lives will be spared. (By the way: if you think international law doesn’t apply to piracy, that means we are free to torture or kill pirates without trial. Traditional international law explicitly allowed their summary execution, at least.)

2. Surround the pirate boat and don’t let them land anywhere. They will run out of water. When they are all unconscious, capture them.

If either policy is followed, and if it is made clear that any US-Flag ship attack will fail in this way, then piracy against US vessels will cease, without any need for naval patrols or attack on Somali bases. We could, if we wanted, extend the protection to foreign ships too, perhaps for a large payment.

Categories: game theory Tags:

French Preface

February 16th, 2009 No comments

I finally got round to scanning in the 688K Francis Bismans preface to the French edition of Games and Information. It’s actually a 14 page essay.

Categories: game theory, research Tags:

Game Theory and Blackmail of Politicians

January 23rd, 2009 No comments

The FBI had highly incriminating tapes of Martin Luther King indulging in adultery, dirty jokes, etc. This was illegal, I think, since it was not taped at his office but at home or sleeping place, so it has been suppressed by court order till 2027.

Why, though, didn’t the FBI leak this information back in 1964? I can think of two reasons:

1. The FBI really wasn’t trying to snoop on King’s personal life. The FBI was just doing its job, checking out his communist connections, and having found that though he did consort with communists, he wasn’t one, they figured their job was done.

2. The FBI (i.e., J. Edgar Hoover) blackmailed King, somehow changing his behavior.

I don’t know why the FBI would like to blackmail King, but if you think J. Edgar Hoover was anti-King, reason 2 is your only explanation. If he was anti-King, why didn’t he leak the adultery info– or somehow set up King to be exposed by a third party?

Reason 2 might be verifiable. After the dates when the FBI adultery tapes were made, did King somehow change his behavior?

The idea of blackmail is important in other contexts too.

1. I had the impression that Dole was going easy on Clinton in the 1996 campaign. Was this because Clinton had info on Dole?

2. Rep. Rangel has gotten away with tax evasion for years, it seems. Did presidents use his vulnerability to prosecution to get him to be cooperative on tax policy?

Categories: corruption, game theory, politics Tags:

Pivotal Voting

June 26th, 2008 No comments

I was talking with Bernie Groffman just now and thought I’d make a record of the simple example of why apparent voting strength is not real voting strength. Suppose we have a committee on which Spain gets 50 votes, France gets 50 votes, and Andorra gets 1 vote. All have equal voting power, in fact. A winning coalition needs 2 and only 2 of the countries, and it doesn’t matter which two.

Categories: game theory, politics Tags:

Are the Tories Helping Gordon Brown?

June 16th, 2008 No comments

A prominent Tory MP recently resigned to re-fight his election in protest against an extension of the 28-day imprisonment-without-cause rule to 42 days. That in itself doesn’t make sense to me (his party already opposes the change, 28 vs. 42 seems to miss the point of suspending habeas corpus anyway, … ), but TV pundits were saying that his party leader must be angry with him for shifting news attention away from Prime Minister Brown’s unsteady position within the Labor Party.

I wonder whether the motivation might not be just that. Perhaps the Tories like Brown being at the head of Labor and are helping him out. The very oddity of the Tory resignation helps distract attention from Brown and allows the public mood to improve for him.

Categories: game theory, politics Tags:

Two Game Theory Terms

June 11th, 2008 No comments

From Wikipedia (my boldfacing):

A game in game theory is considered a potential game if the incentive of all players to change their strategy can be expressed in one global function, the potential function. The concept was proposed by Dov Monderer and Lloyd Shapley. Games can be either ordinal or cardinal potential games. In cardinal games, the difference in individual payoffs for each player from individually changing one’s strategy ceteris paribus has to have the same value as the difference in values for the potential function. In ordinal games, only the signs of the differences have to be the same.

A game is a common interest game if it has a unique payoff-dominant outcome. Thus, a pure coordination game is not a common interest game, but ranked coordination is.

Categories: game theory, games Tags:

December 20th, 2007 No comments

An Example Where Imperfect Message Transmission Helps. Myerson has an example on page 842 of this Handbook chapter with two possible states and three actions where communication fails if the messages always gets through, but helps some if they only get through half the time. Suppose the Sender knows the state of the world is A orB, with equal probability. The Receiver can choose X, Y, or Z. If the state is A, the Sender-Receiver payoffs are (2,3), (0,2), (-1,0). If the state is B, the Sender-Receiver payoffs are (1,0), (2,2), (0,3). If messages always get through, the Sender’s message is irrelevant and the Receiver chooses Y, for a an expected payoff of 2 instead of 1.5 or 1.5. If the message is sent by a pigeon who gets shot down on the way with probability .5, then an equilibrium (not unique) is for the Sender to send the pigeon if the state is A but not if it is B and for the Receiver to choose X if the pigeon arrives and Y otherwise. Both players get higher expected payoffs as a result of using the “noisy” pigeon. See the link for more explanation.

Categories: Economics, game theory Tags:

October 28th, 2007 1 comment

Price Discrimination Terminology. Last week at the I.O. workshop someone had a good idea for replacing the old 1st, 2nd, 3rd degree price discrimination terminology. Exogenous-feature price discrimination is based on things the buyer can’t change that the seller observes, such as his age. Endogenous-feature price discrimination is based on things the buyer can change, such as the quantity he buys or the quality he buys.

Categories: Economics, game theory Tags:

King Offa’s Border Policy

October 12th, 2007 1 comment

I was reading about the border policies of King Offa, the Anglo-Saxon king of Mercia. He made no attempt to conquer Wales. Instead, he built Offa’s Dyke, a boundary-marking ridge, and every few years he raided Wales. (Click here to read