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February 04, 2004

Comments

Vinayak Nagaraj

Hehe... just starting out on game theory myself at the LSE... but it seems the kind Mr. Il's best response function would make for an interesting thought! Which is the more credible threat... that he has the nukes... or that he'd be crazy enough to use them?

P.S.Babcock

Yes, Vinayak, I agree. The interesting aspect of the problem is to discern Kim's valuations of the various outcomes! The task of finding "equilibrium" strategies is secondary at best and provides little insight. The West tends to focus on elaborate strategies that involve bluffs or cheap talk. "Abide by this agreement or else!" But we don't back up those threats. So anyone playing against us knows not to believe what we *pretend* will be our valuation function or best response function. Economics and game theory offer almost nothing in this context. Insight about your opponent's beliefs and pysche, knowledge of how real human beings behave (the type of knowledge economists rarely possess) is decisive here.

Hope you enjoy game theory! It's a lot of fun.

Vinayak Nagaraj

I cannot agree more! Since Im in the summer school course, we have three hour lectures every day, so we're covering stuff at a really fast pace. But each time I stop to think, it just seems like game theory can be a completely useless tool if we leave our analysis of the opponent to chance. Everything from the prisoner's dilemma straight until perfect bayesian nash equilibriums... they all depend upon this one factor that we NEVER seem to think about enough.

Simon

Maybe he knows kakutanis fpt though

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