In order to prepare students to work on a pre set exam question based on two readings, one from Kreps (Ch 23 Credibility and Reputation, Micro for Managers) , the other from Dixit and Skeath (Games of strategy – 10 steps to credibility!) . This was done “impromptu” , using a document camera – but as it turned out the “slower” pace of hand written material “works” well. Maybe better than regular “pre prepared, slick, presentation slides”?
A component of our module on sequential games. The game tree for these two games is a little simpler than for the 2×2 entry deterrence games. Yet each game captures a fundamental strategic problem . When should we, and when should we not, trust people? How can aggressive behaviour be sustained when one party clearly doesn’t want it to?
The first we is a situation of strategic loss of trust (in the face of predictable opportunism) – and one might wonder whether a promise would fix the problem of mistrust. The second is how non-cooperative, strategic avoidance of mutual arm can sustain one sided aggression/violence – and one might wonder whether a threat would fix the problem.
Note the adjective “strategic” applied to these games of (mis)trust and aggression . As per the definitions of game theory, conscious, intelligent rational thinking and reasoning about rational lines of play, and an awareness of each other’s rationality sustains the mistrust, the aggression.
This is a short clip about what rationality is usually taken to mean in models of rational action and what game theory brings to this important concept of rationality the social sciences. Generally the rational agent model for deicison making uses 3 key ideas to delineate the notion of rationality : (1) objectives and goals, (2) resources and feasibility constraints, and (3) contingencies and risks. Each of these ideas contributes to the key idea of constrained optimal choice in decision theory. But Game Theory adds a new dimension ….an awareness of the mutual awareness that all players are rational, with each being well aware that the other players know they are rational, and that they know they know…… This mutual awareness of rationality introduces some very distinctive ideas – and puzzles – about rational play in strategic situations that aren’t present in single person models of rational decision making where the “environment” for a decision, however complex, is explicitly viewed as either non-intelligent or blissfully ignorant of the roles of mutual conscious awareness of rationality.
It’s been a little while since I have posted any material. …..Don’t ask!!
As my sabbatical year begins I want to post more regulary, especially about the list of “to-do” tasks i have set for myself for the year, but also to get back into the habit of writing regularly about topics of interest. At the moment I have three things on the go that turn out to be interconnected….a bit:
As far as #1 goes I have been collecting a number of interesting papers and web resources. First and foremost is Daphne Kholler’s talk at Columbia in mid 2013 about Coursera , but also the review panel videos about the history and development of MIT’s open courseware experiment. here on Youtube, here and here at the 2007 conference . (there is a video on youtube from 2001 and a later 2011 video, both conferences on open courseware initiatives that i need to locate FOUND IT HERE) .From my participation in UC’s e-learning group I have compiled a number of interesting working papers from Nikki Davis, but as importantly I am an active consumer (and producer) of MOOC content – as an economist I wish to reflect on and interact with arguments being made about “business models”. So I began to ask – what are universities all about? – and, to answer this question am currently reading two intersting papers and an e-book :
Naturally there is a personal issue here as well…connected with all this reading on the purpose and nature of universities, and MOOCS,…..and moi! a professional academic economist entering autumn years of his career….
As you may know there are remarkable, and draconian, human capital disinvestments happening at my home University. At first I ignored what was happening in surrounding Departments and kept myself only vaguely informed about proposed reductions – but when my friends and former colleagues (Don, Terry) in Management Science got the axe – well their “department” was nuked – some said submarined – with only a few survivors I began to prick up my ears. Of course what really got my attention was a further planned reduction in numbers in the Econ department from current 13 EFTs down by at least another one full time staff member. As I took initiative to check out the possibilities for phased retirement and/or fractional continuing academic appointment I discovered much about how the current management regime works. I don’t like it. Then, when with a group of 7 other experienced academics I was selectively targeted for termination I learned even more…and I like it – the current administration policies and objectives – even less.
In the last two years we in Econ have gone from 18 to 13 , and from 21 to 13 in the last 7 years, yet another body is required for sacrifice. Although I am sure you will find the official record saying that most staff reductions were “voluntary” exits, and the necessity for such reductions due to post earthquake problems with student numbers and finances, don’t you believe it. The centrally determined, internal inter departmental wealth redistributions that are going on and have been going on inside UC for the last few years are draconian – but perhaps not even as bad as the proposals to be implemented across the Arts faculty.
We are over staffed according to central admin senior managers, and so have to shed bodies. That is rubbish claim – in fact we are understaffed as a department even using just current enrolments of students and we are massively over taxed by a centralised managerial bureaucracy hell bent of reshaping the University of Canterbury in its managers and outside funders (all non academics) own vision. The over taxing isn’t new. The review of the Economics Department in 1999 (review panel ) headed by Professors Les Oxley and Peter Kennedy recorded that for decades central
The second of two sceencast lectures on how intelligent players reason about states and signals in a game ; the first is here
This lecture uses the two practise problems from class (one on breast cancer screening, the other on witness reports in a courtroom case) to develop a “language” of probability in a way that is (1) easily understandable for ANY type or level of student – whether trained in statistics or not and (2) useful for students of game theory . Simple numerical examples using Gigerenzer style natural frequency/count reasoning are developed to explain a wide range of concepts connecting uncertainties about “states” and “signals” sensitivity, specificity, conditional probabilities, predictive probabilities, inverse probabilities, etc.