|
Chain-store Paradox
The chainstore paradox is an apparent game theory paradox involving the chain store game, where a "deterrence strategy" appears optimal instead of the backward induction strategy of standard game theory reasoning. The chain store game A monopolist (Player A) has branches in 20 towns. He faces 20 potential competitors, one in each town, who will be able to choose or . They do so in sequential order and one at a time. If a potential competitor chooses , he receives a payoff of 1, while A receives a payoff of 5. If he chooses , he will receive a payoff of either 2 or 0, depending on the response of Player A to his action. Player A, in response to a choice of , must choose one of two pricing strategies, or . If he chooses , both player A and the competitor receive a payoff of 2, and if A chooses , each player receives a payoff of 0. These outcomes lead to two theories for the game, the induction (game theoretically optimal version) and the deterrence theory (weakly dominated theory ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chain Store
A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many parts of the world. A franchise retail establishment is one form of chain store. In 2005, the world's largest retail chain, Walmart, became the world's largest corporation based on gross sales. History In 1792, Henry Walton Smith and his wife Anna established W.H. Smith as a news vending business in London that would become a national concern in the mid-19th century under the management of their grandson William Henry Smith. The world's oldest national retail chain, the firm took advantage of the railway boom during the Industrial Revolution by opening news-stands at railway stations beginning in 1848. The firm, now called WHSmith, had more than 1,400 locations as of 2017. In the U.S., chain stores likely began with J. Stiner & Company, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Irrational
Irrationality is cognition, thinking, talking, or acting without inclusion of rationality. It is more specifically described as an action or opinion given through inadequate use of reason, or through emotional distress or cognitive deficiency. The term is used, usually pejoratively, to describe thinking and actions that are, or appear to be, less useful, or more illogical than other more rational alternatives. Irrational behaviors of individuals include taking offense or becoming angry about a situation that has not yet occurred, expressing emotions exaggeratedly (such as crying hysterically), maintaining unrealistic expectations, engaging in irresponsible conduct such as problem intoxication, disorganization, and falling victim to confidence tricks. People with a mental illness like schizophrenia may exhibit irrational paranoia. These more contemporary normative conceptions of what constitutes a manifestation of irrationality are difficult to demonstrate empirically because it ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Theory And Decision
Theory and Decision is a peer-reviewed multidisciplinary journal of decision science published quarterly by Springer Science+Business Media. It was first published in 1970. The current editor-in-chief is Mohammed Abdellaoui. The journal publishes research in fields such as economics, game theory, management science, and artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machines, as opposed to intelligence displayed by animals and humans. Example tasks in which this is done include speech re .... References External linksOfficial Website Economics journals Academic journals established in 1970 Springer Science+Business Media academic journals Logic journals {{management-journal-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Unexpected Hanging Paradox
The unexpected hanging paradox or surprise test paradox is a paradox about a person's expectations about the timing of a future event which they are told will occur at an unexpected time. The paradox is variously applied to a prisoner's hanging or a surprise school test. It was first introduced to the public in Martin Gardner's March 1963 Mathematical Games column in ''Scientific American'' magazine. There is no consensus on its precise nature and consequently a canonical resolution has not been agreed on. Logical analyses focus on "truth values", for example by identifying it as paradox of self-reference. Epistemological studies of the paradox instead focus on issues relating to ''knowledge''; for example, one interpretation reduces it to Moore's paradox. Some regard it as a "significant problem" for philosophy. Description The paradox has been described as follows: Other versions of the paradox replace the death sentence with a surprise fire drill, examination, pop quiz, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Traveler's Dilemma
In game theory, the traveler's dilemma (sometimes abbreviated TD) is a non-zero-sum game in which each player proposes a payoff. The lower of the two proposals wins; the lowball player receives the lowball payoff plus a small bonus, and the highball player receives the same lowball payoff, minus a small penalty. Surprisingly, the Nash equilibrium is for both players to aggressively lowball. The traveler's dilemma is notable in that naive play appears to outperform the Nash equilibrium; this apparent paradox also appears in the centipede game and the finitely-iterated prisoner's dilemma. Formulation The original game scenario was formulated in 1994 by Kaushik Basu and goes as follows: "An airline loses two suitcases belonging to two different travelers. Both suitcases happen to be identical and contain identical antiques. An airline manager tasked to settle the claims of both travelers explains that the airline is liable for a maximum of $100 per suitcase—he is unable to find out ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Repeated Game
In game theory, a repeated game is an extensive form game that consists of a number of repetitions of some base game (called a stage game). The stage game is usually one of the well-studied 2-person games. Repeated games capture the idea that a player will have to take into account the impact of his or her current action on the future actions of other players; this impact is sometimes called his or her reputation. ''Single stage game'' or ''single shot game'' are names for non-repeated games. For the real-life example of a repeated game, consider two gas stations that are adjacent to one another. They compete by publicly posting pricing and have the same and constant marginal cost c (the wholesale price of gasoline). Assume that when they both charge p = 10, their joint profit is maximized, resulting in a high profit for everyone. Despite the fact that this is the best outcome for them, they are motivated to deviate. By modestly lowering the price, anyone can steal all of their ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Complete Information
In economics and game theory, complete information is an economic situation or game in which knowledge about other market participants or players is available to all participants. The utility functions (including risk aversion), payoffs, strategies and "types" of players are thus common knowledge. Complete information is the concept that each player in the game is aware of the sequence, strategies, and payoffs throughout gameplay. Given this information, the players have the ability to plan accordingly based on the information to maximize their own strategies and utility at the end of the game. Inversely, in a game with incomplete information, players do not possess full information about their opponents. Some players possess private information, a fact that the others should take into account when forming expectations about how those players will behave. A typical example is an auction: each player knows his own utility function (valuation for the item), but does not know the utili ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Theory
Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed two-person zero-sum games, in which each participant's gains or losses are exactly balanced by those of other participants. In the 21st century, game theory applies to a wide range of behavioral relations; it is now an umbrella term for the science of logical decision making in humans, animals, as well as computers. Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum game and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathema ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Paradox
A paradox is a logically self-contradictory statement or a statement that runs contrary to one's expectation. It is a statement that, despite apparently valid reasoning from true premises, leads to a seemingly self-contradictory or a logically unacceptable conclusion. A paradox usually involves contradictory-yet-interrelated elements that exist simultaneously and persist over time. They result in "persistent contradiction between interdependent elements" leading to a lasting "unity of opposites". In logic, many paradoxes exist that are known to be invalid arguments, yet are nevertheless valuable in promoting critical thinking, while other paradoxes have revealed errors in definitions that were assumed to be rigorous, and have caused axioms of mathematics and logic to be re-examined. One example is Russell's paradox, which questions whether a "list of all lists that do not contain themselves" would include itself, and showed that attempts to found set theory on the identification ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Backward Induction
Backward induction is the process of reasoning backwards in time, from the end of a problem or situation, to determine a sequence of optimal actions. It proceeds by examining the last point at which a decision is to be made and then identifying what action would be most optimal at that moment. Using this information, one can then determine what to do at the second-to-last time of decision. This process continues backwards until one has determined the best action for every possible situation (i.e. for every possible information set) at every point in time. Backward induction was first used in 1875 by Arthur Cayley, who uncovered the method while trying to solve the infamous Secretary problem. In the mathematical optimization method of dynamic programming, backward induction is one of the main methods for solving the Bellman equation. In game theory, backward induction is a method used to compute subgame perfect equilibria in sequential games. The only difference is that optimizat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Reinhard Selten
Reinhard Justus Reginald Selten (; 5 October 1930 – 23 August 2016) was a German economist, who won the 1994 Nobel Memorial Prize in Economic Sciences (shared with John Harsanyi and John Nash). He is also well known for his work in bounded rationality and can be considered one of the founding fathers of experimental economics. Biography Selten was born in Breslau (Wrocław) in Lower Silesia, now in Poland, to a Jewish father, Adolf Selten (blind bookseller; d. 1942Roberts, Sam"Reinhard Selten, Whose Strides in Game Theory Led to a Nobel, Dies at 85" New York ''Times'', September 2, 2016. Retrieved 2016-09-03.), and Protestant mother, Käthe Luther.O'Connor, J J, and E F Robertson"Reinhard Selten" ''www-history.mcs.st-and.ac.uk'', November 2010. Retrieved 2016-09-03. Reinhard Selten was raised as Protestant. After a brief family exile in Saxony and Austria, Selten returned to Hesse, Germany after the war and, in high school, read an article in Fortune magazine about ga ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Non-credible Threat
A non-credible threat is a term used in game theory and economics to describe a threat in a sequential game that a ''rational'' player would not actually carry out, because it would not be in his best interest to do so. A threat, and its counterparta commitment, are both defined by American economist and Nobel prize winner, T.C. Schelling, who stated that: "A announces that B's behaviour will lead to a response from A. If this response is a reward, then the announcement is a commitment; if this response is a penalty, then the announcement is a threat." While a player might make a threat, it is only deemed credible if it serves the best interest of the player.Heifetz, A., & Yalon-Fortus, J. (2012). Game Theory: Interactive Strategies in Economics and Management. Cambridge University Press. ProQuest Ebook Central In other words, the player would be willing to carry through with the action that is being threatened regardless of the choice of the other player. This is based on the ass ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
