|
Screening Games
A screening game is a two-player principal–agent type game used in economic and game theoretical modeling. Principal–agent problems are situations where there are two players whose interests are not necessarily matching with each other, and where complete honesty is not optimal for one player. This will lead to strategies where the players exchange information based in their actions which is to some degree noisy. This ambiguity prevents the other player from taking advantage of the first. The game is closely related to signaling games, but there is a difference in how information is exchanged. In the principal-agent model, for instance, there is an employer (the principal) and a worker (the agent). The worker has a given skill level, and chooses the amount of effort he will exert. If the worker knows his ability (which is given at the outset, perhaps by nature), and can acquire credentials or somehow signal that ability to the employer before being offered a wage, then the p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Principal–agent Problem
The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the "agent") takes actions on behalf of another person or entity (the " principal"). The problem worsens when there is a greater discrepancy of interests and information between the principal and agent, as well as when the principal lacks the means to punish the agent. The deviation from the principal's interest by the agent is called " agency costs".''Pay Without Performance'', Lucian Bebchuk and Jesse Fried, Harvard University Press 2004preface and introduction Common examples of this relationship include corporate management (agent) and shareholders (principal), elected officials (agent) and citizens (principal), or brokers (agent) and markets (buyers and sellers, principals). In all these cases, the principal has to be concerned with whether the agent is acting in the best interest of the principal. The concepts of moral hazard and conflict of interest re ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic
An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of scarcity, scarce resources'. A given economy is a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure, legal systems, and natural resources as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two grou ... [...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] |
Signaling Games
In game theory, a signaling game is a simple type of a dynamic Bayesian game.Subsection 8.2.2 in Fudenberg Trole 1991, pp. 326–331 The essence of a signalling game is that one player takes an action, the signal, to convey information to another player, where sending the signal is more costly if they are conveying false information. A manufacturer, for example, might provide a warranty for its product in order to signal to consumers that its product is unlikely to break down. The classic example is of a worker who acquires a college degree not because it increases their skill, but because it conveys their ability to employers. A simple signalling game would have two players, the sender and the receiver. The sender has one of two types that we might call "desirable" and "undesirable" with different payoff functions, where the receiver knows the probability of each type but not which one this particular sender has. The receiver has just one possible type. The sender moves first ... [...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] |
Incomplete 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] |
Signalling (economics)
In contract theory, signalling (or signaling; see spelling differences) is the idea that one party (the agent) credibly conveys some information about itself to another party (the principal). Although signalling theory was initially developed by Michael Spence based on observed knowledge gaps between organisations and prospective employees, its intuitive nature led it to be adapted to many other domains, such as Human Resource Management, business, and financial markets. In Spence's job-market signaling model, (potential) employees send a signal about their ability level to the employer by acquiring education credentials. The informational value of the credential comes from the fact that the employer believes the credential is positively correlated with having the greater ability and difficulty for low ability employees to obtain. Thus the credential enables the employer to reliably distinguish low ability workers from high ability workers. The concept of signaling is also app ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Signalling Theory
Within evolutionary biology, signalling theory is a body of theoretical work examining communication between individuals, both within species and across species. The central question is when organisms with conflicting interests, such as in sexual selection, should be expected to provide honest signals (no presumption being made of conscious intention) rather than cheating. Mathematical models describe how signalling can contribute to an evolutionarily stable strategy. Signals are given in contexts such as mate selection by females, which subjects the advertising males' signals to selective pressure. Signals thus evolve because they modify the behaviour of the receiver to benefit the signaller. Signals may be honest, conveying information which usefully increases the fitness of the receiver, or dishonest. An individual can cheat by giving a dishonest signal, which might briefly benefit that signaller, at the risk of undermining the signalling system for the whole population. Th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
_per_capita_in_2020.png "Click for more on -> Economic")
