Game Theory. Mike Shor Topic 1 (continued). “ I don ’ t skate to where the puck is, I skate to where it ’ s going to be. ”. - Wayne Gretzky. Defining the Game. Review Strategic interdependence of players You pursue your goals So does everyone else
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Mike ShorTopic 1 (continued)
“I don’t skate to where the puck is, I skate to where it’s going to be.”
- Wayne Gretzky
Ron Paul, Sarah Palin, or Al Gore?
Ronto Sarahto Al( R > S > A )
Sarahto Alto Ron( S > A > R )
Alto Ronto Sarah( A > R > S )
Then, Ron/Sarah winner versus Al
Then, Ron/Al winner versus Sarah
Then, Sarah/Al winner versus Ron
4 (R>S>A) 3 (S>A>R) 2 (A>R>S)
“The battle is won before it is ever fought”
— Sun Tzu
When the rules of the game are flexible manipulate them to your advantage.
The rule of three
The rule of infinity
“I can calculate the motions of heavenly bodies, but not the madness of people”
- Sir Isaac Newton
(upon losing £20,000 in the South Sea Bubble in 1720)
If you knew the exact date of the next stock market crash, what would you do?
“Almost every generation, it seems, has its October stock-market crash.”
— Wall Street Journal, October 2008
If, in each month, the stock market is equally likely to go up or go down, then there is over an 80% chance that some month will be “bad” three years in a row!
“October. This is one of the peculiarly dangerous months to speculate in stocks.
– Wall Street Journal, quoting Mark Twain
Front Page Story:
“Clear Road Ahead …”
“Increased supply after the lock-up expiration will drive price down. It is simply economics of supply and demand.”
— Wall Street Journal reporter
What are the outcome of games?