logging in or signing up Smith F09 Belly Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINTLite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 125 Category: Entertainment License: All Rights Reserved Like it (0) Dislike it (0) Added: October 13, 2007 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Nash’s Nobel: Nash’s Nobel Presentation by: Andrew Smith andrewdsmith8@bw-deloitte.comJohn F Nash Jr: John F Nash Jr 1928 - Seminal work 1950 Nobel prize 1994Cournot Equilibrium: Cournot EquilibriumRock Paper Scissors: Rock Paper Scissors Zero sum game Symmetric payoffs Scissors cut paper Paper covers rock Rock sharpens scissors Losing strategies exist Randomise to avoid losingRole Play Game: Role Play Game Invitation to tender to supply 10 units Bids allowed: €1 through €5 per unit in intervals of €1 Contract awarded to cheaper supplier Split 50/50 if a tie Red: production cost €1 per unit Blue: production cost €2 per unitGame Payoffs: Game Payoffs 0 -10 0 10 0 0 0 20 0 30 0 -5 0 0 0 0 0 0 0 0 0 -10 10 0 5 0 10 0 10 0 0 -10 10 5 0 0 20 0 20 0 0 0 0 10 0 0 15 10 30 0 No bid 1 2 3 4 Red Bid (cost €1) 1 2 3 4 5 Blue bid (cost: €2) 0 -10 0 0 0 10 0 20 20 15 0 0 0 0 10 0 20 0 30 0 40 0 No bid 5Equilibrium: Equilibrium 0 -10 0 10 0 0 0 20 0 30 0 -5 0 0 0 0 0 0 0 0 0 -10 10 0 5 0 10 0 10 0 0 -10 10 5 0 0 20 0 20 0 0 0 0 10 0 0 15 10 30 0 No bid 1 2 3 4 Red Bid (cost €1) 1 2 3 4 5 Blue bid (cost: €2) 0 -10 0 0 0 10 0 20 20 15 0 0 0 0 10 0 20 0 30 0 40 0 No bid 5Bargaining Game: Bargaining Game Player A wishes to sell an asset Player B wishes to buy Third party dealer sells at €10 and buys at €5 Model negotiation between A and B Many Nash equilibria Unique Selten equilibriumIs the Theory Correct?: Is the Theory Correct? Mathematically, yes But do real games converge to Nash equilibria? Difficult to specify a game and to calibrate a model My “get out of jail” card is to invoke imperfect calibration when my model fails to predict actual outcomes(Possible) Applications: (Possible) Applications Auction design (eg Telecom licenses) Military / anti-terrorist Regulation / response Capital allocation Underwriting Social policy Premium cycleNash’s Nobel: Nash’s Nobel Presentation by: Andrew Smith andrewdsmith8@bw-deloitte.com You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
Smith F09 Belly Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINTLite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 125 Category: Entertainment License: All Rights Reserved Like it (0) Dislike it (0) Added: October 13, 2007 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Nash’s Nobel: Nash’s Nobel Presentation by: Andrew Smith andrewdsmith8@bw-deloitte.comJohn F Nash Jr: John F Nash Jr 1928 - Seminal work 1950 Nobel prize 1994Cournot Equilibrium: Cournot EquilibriumRock Paper Scissors: Rock Paper Scissors Zero sum game Symmetric payoffs Scissors cut paper Paper covers rock Rock sharpens scissors Losing strategies exist Randomise to avoid losingRole Play Game: Role Play Game Invitation to tender to supply 10 units Bids allowed: €1 through €5 per unit in intervals of €1 Contract awarded to cheaper supplier Split 50/50 if a tie Red: production cost €1 per unit Blue: production cost €2 per unitGame Payoffs: Game Payoffs 0 -10 0 10 0 0 0 20 0 30 0 -5 0 0 0 0 0 0 0 0 0 -10 10 0 5 0 10 0 10 0 0 -10 10 5 0 0 20 0 20 0 0 0 0 10 0 0 15 10 30 0 No bid 1 2 3 4 Red Bid (cost €1) 1 2 3 4 5 Blue bid (cost: €2) 0 -10 0 0 0 10 0 20 20 15 0 0 0 0 10 0 20 0 30 0 40 0 No bid 5Equilibrium: Equilibrium 0 -10 0 10 0 0 0 20 0 30 0 -5 0 0 0 0 0 0 0 0 0 -10 10 0 5 0 10 0 10 0 0 -10 10 5 0 0 20 0 20 0 0 0 0 10 0 0 15 10 30 0 No bid 1 2 3 4 Red Bid (cost €1) 1 2 3 4 5 Blue bid (cost: €2) 0 -10 0 0 0 10 0 20 20 15 0 0 0 0 10 0 20 0 30 0 40 0 No bid 5Bargaining Game: Bargaining Game Player A wishes to sell an asset Player B wishes to buy Third party dealer sells at €10 and buys at €5 Model negotiation between A and B Many Nash equilibria Unique Selten equilibriumIs the Theory Correct?: Is the Theory Correct? Mathematically, yes But do real games converge to Nash equilibria? Difficult to specify a game and to calibrate a model My “get out of jail” card is to invoke imperfect calibration when my model fails to predict actual outcomes(Possible) Applications: (Possible) Applications Auction design (eg Telecom licenses) Military / anti-terrorist Regulation / response Capital allocation Underwriting Social policy Premium cycleNash’s Nobel: Nash’s Nobel Presentation by: Andrew Smith andrewdsmith8@bw-deloitte.com