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🔗 Business 🔗 Game theory

A Keynesian beauty contest is a concept developed by John Maynard Keynes and introduced in Chapter 12 of his work, The General Theory of Employment, Interest and Money (1936), to explain price fluctuations in equity markets.

🔗 Economics 🔗 Education 🔗 Game theory 🔗 Games

A simulation game is "a game that contains a mixture of skill, chance, and strategy to simulate an aspect of reality, such as a stock exchange". Similarly, Finnish author Virpi Ruohomäki states that "a simulation game combines the features of a game (competition, cooperation, rules, participants, roles) with those of a simulation (incorporation of critical features of reality). A game is a simulation game if its rules refer to an empirical model of reality". A properly built simulation game used to teach or learn economics would closely follow the assumptions and rules of the theoretical models within this discipline.

🔗 Mathematics 🔗 Game theory

Fair cake-cutting is a kind of fair division problem. The problem involves a heterogeneous resource, such as a cake with different toppings, that is assumed to be divisible – it is possible to cut arbitrarily small pieces of it without destroying their value. The resource has to be divided among several partners who have different preferences over different parts of the cake, i.e., some people prefer the chocolate toppings, some prefer the cherries, some just want as large a piece as possible. The division should be unanimously fair – each person should receive a piece believed to be a fair share.

The "cake" is only a metaphor; procedures for fair cake-cutting can be used to divide various kinds of resources, such as land estates, advertisement space or broadcast time.

The prototypical procedure for fair cake-cutting is divide and choose, which is mentioned in the book of Genesis. It solves the fair division problem for two people. The modern study of fair cake-cutting was initiated during World War II, when Hugo Steinhaus asked his students Stefan Banach and Bronisław Knaster to find a generalization of divide-and-choose to three or more people. They developed the last diminisher procedure. Today, fair cake-cutting is the subject of intense research in mathematics, computer science, economics and political science.

🔗 Game theory

In game theory, a focal point (or Schelling point) is a solution that people tend to choose by default in the absence of communication. The concept was introduced by the American economist Thomas Schelling in his book The Strategy of Conflict (1960). Schelling states that "(p)eople can often concert their intentions or expectations with others if each knows that the other is trying to do the same" in a cooperative situation (at page 57), so their action would converge on a focal point which has some kind of prominence compared with the environment. However, the conspicuousness of the focal point depends on time, place and people themselves. It may not be a definite solution.

🔗 Economics 🔗 Robotics 🔗 Game theory

Mechanism design is a field in economics and game theory that takes an objectives-first approach to designing economic mechanisms or incentives, toward desired objectives, in strategic settings, where players act rationally. Because it starts at the end of the game, then goes backwards, it is also called reverse game theory. It has broad applications, from economics and politics (markets, auctions, voting procedures) to networked-systems (internet interdomain routing, sponsored search auctions).

Mechanism design studies solution concepts for a class of private-information games. Leonid Hurwicz explains that 'in a design problem, the goal function is the main "given", while the mechanism is the unknown. Therefore, the design problem is the "inverse" of traditional economic theory, which is typically devoted to the analysis of the performance of a given mechanism.' So, two distinguishing features of these games are:

• that a game "designer" chooses the game structure rather than inheriting one
• that the designer is interested in the game's outcome

The 2007 Nobel Memorial Prize in Economic Sciences was awarded to Leonid Hurwicz, Eric Maskin, and Roger Myerson "for having laid the foundations of mechanism design theory".

🔗 Game theory

Game theory studies strategic interaction between individuals in situations called games. Classes of these games have been given names. This is a list of the most commonly studied games

🔗 Environment 🔗 Economics 🔗 Law 🔗 Anthropology 🔗 Sociology 🔗 Game theory

The tragedy of the anticommons is a type of coordination breakdown, in which a commons does not emerge, even when general access to resources or infrastructure would be a social good. It is a mirror-image of the older concept of tragedy of the commons, in which numerous rights holders' combined use exceeds the capacity of a resource and depletes or destroys it. The "tragedy of the anticommons" covers a range of coordination failures, including patent thickets and submarine patents. Overcoming these breakdowns can be difficult, but there are assorted means, including eminent domain, laches, patent pools, or other licensing organizations.

The term originally appeared in Michael Heller's 1998 article of the same name and is the thesis of his 2008 book. The model was formalized by James M. Buchanan and Yong Yoon. In a 1998 Science article, Heller and Rebecca S. Eisenberg, while not disputing the role of patents in general in motivating invention and disclosure, argue that biomedical research was one of several key areas where competing patent rights could actually prevent useful and affordable products from reaching the marketplace.

🔗 Mathematics 🔗 Economics 🔗 Politics 🔗 Game theory

In game theory, the Nash equilibrium, named after the mathematician John Forbes Nash Jr., is a proposed solution of a non-cooperative game involving two or more players in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy.

In terms of game theory, if each player has chosen a strategy, and no player can benefit by changing strategies while the other players keep theirs unchanged, then the current set of strategy choices and their corresponding payoffs constitutes a Nash equilibrium.

Stated simply, Alice and Bob are in Nash equilibrium if Alice is making the best decision she can, taking into account Bob's decision while his decision remains unchanged, and Bob is making the best decision he can, taking into account Alice's decision while her decision remains unchanged. Likewise, a group of players are in Nash equilibrium if each one is making the best decision possible, taking into account the decisions of the others in the game as long as the other parties' decisions remain unchanged.

Nash showed that there is a Nash equilibrium for every finite game: see further the article on strategy.

🔗 Biography 🔗 Computing 🔗 Mathematics 🔗 Military history 🔗 Military history/North American military history 🔗 Military history/United States military history 🔗 Military history/Military science, technology, and theory 🔗 Physics 🔗 Economics 🔗 Philosophy 🔗 Philosophy/Logic 🔗 Biography/science and academia 🔗 Philosophy/Philosophy of science 🔗 Philosophy/Contemporary philosophy 🔗 Military history/Military biography 🔗 Biography/military biography 🔗 History of Science 🔗 Computing/Computer science 🔗 Philosophy/Philosophers 🔗 Education 🔗 Hungary 🔗 Military history/World War II 🔗 Military history/Cold War 🔗 Physics/History 🔗 Physics/Biographies 🔗 Game theory 🔗 Eastern Europe

John von Neumann (; Hungarian: Neumann János Lajos, pronounced [ˈnɒjmɒn ˈjaːnoʃ ˈlɒjoʃ]; December 28, 1903 – February 8, 1957) was a Hungarian-American mathematician, physicist, computer scientist, engineer and polymath. Von Neumann was generally regarded as the foremost mathematician of his time and said to be "the last representative of the great mathematicians"; who integrated both pure and applied sciences.

He made major contributions to a number of fields, including mathematics (foundations of mathematics, functional analysis, ergodic theory, representation theory, operator algebras, geometry, topology, and numerical analysis), physics (quantum mechanics, hydrodynamics, and quantum statistical mechanics), economics (game theory), computing (Von Neumann architecture, linear programming, self-replicating machines, stochastic computing), and statistics.

He was a pioneer of the application of operator theory to quantum mechanics in the development of functional analysis, and a key figure in the development of game theory and the concepts of cellular automata, the universal constructor and the digital computer.

He published over 150 papers in his life: about 60 in pure mathematics, 60 in applied mathematics, 20 in physics, and the remainder on special mathematical subjects or non-mathematical ones. His last work, an unfinished manuscript written while he was in hospital, was later published in book form as The Computer and the Brain.

His analysis of the structure of self-replication preceded the discovery of the structure of DNA. In a short list of facts about his life he submitted to the National Academy of Sciences, he stated, "The part of my work I consider most essential is that on quantum mechanics, which developed in Göttingen in 1926, and subsequently in Berlin in 1927–1929. Also, my work on various forms of operator theory, Berlin 1930 and Princeton 1935–1939; on the ergodic theorem, Princeton, 1931–1932."

During World War II, von Neumann worked on the Manhattan Project with theoretical physicist Edward Teller, mathematician Stanisław Ulam and others, problem solving key steps in the nuclear physics involved in thermonuclear reactions and the hydrogen bomb. He developed the mathematical models behind the explosive lenses used in the implosion-type nuclear weapon, and coined the term "kiloton" (of TNT), as a measure of the explosive force generated.

After the war, he served on the General Advisory Committee of the United States Atomic Energy Commission, and consulted for a number of organizations, including the United States Air Force, the Army's Ballistic Research Laboratory, the Armed Forces Special Weapons Project, and the Lawrence Livermore National Laboratory. As a Hungarian émigré, concerned that the Soviets would achieve nuclear superiority, he designed and promoted the policy of mutually assured destruction to limit the arms race.

🔗 Environment 🔗 Economics 🔗 Philosophy 🔗 Politics 🔗 Philosophy/Ethics 🔗 Game theory 🔗 Fisheries and Fishing

In economic science, the tragedy of the commons is a situation in which individual users, who have open access to a resource unhampered by shared social structures or formal rules that govern access and use, act independently according to their own self-interest and, contrary to the common good of all users, cause depletion of the resource through their uncoordinated action. The concept originated in an essay written in 1833 by the British economist William Forster Lloyd, who used a hypothetical example of the effects of unregulated grazing on common land (also known as a "common") in Great Britain and Ireland. The concept became widely known as the "tragedy of the commons" over a century later after an article written by Garrett Hardin in 1968. Faced with evidence of historical and existing commons, Hardin later retracted his original thesis, stating that the title should have been "The Tragedy of the Unmanaged Commons".

Although taken as a hypothetical example by Lloyd, the historical demise of the commons of Britain and Europe resulted not from misuse of long-held rights of usage by the commoners, but from the commons' owners enclosing and appropriating the land, abrogating the commoners' rights.

Although open-access resource systems may collapse due to overuse (such as in overfishing), many examples have existed and still do exist where members of a community with regulated access to a common resource co-operate to exploit those resources prudently without collapse, or even creating "perfect order". Elinor Ostrom was awarded the 2009 Nobel Memorial Prize in Economic Sciences for demonstrating this concept in her book Governing the Commons, which included examples of how local communities were able to do this without top-down regulations or privatization. On the other hand, Dieter Helm argues that these examples are context-specific and the tragedy of the commons "is not generally solved this way. If it were, the destruction of nature would not have occurred."

In a modern economic context, "commons" is taken to mean any open-access and unregulated resource such as the atmosphere, oceans, rivers, ocean fish stocks, or even an office refrigerator. In a legal context, it is a type of property that is neither private nor public, but rather held jointly by the members of a community, who govern access and use through social structures, traditions, or formal rules.

In environmental science, the "tragedy of the commons" is often cited in connection with sustainable development, meshing economic growth and environmental protection, as well as in the debate over global warming. It has also been used in analyzing behavior in the fields of economics, evolutionary psychology, anthropology, game theory, politics, taxation, and sociology.