Game theory behind the health care plan?

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Game theory behind the health care plan?

Post  Lauren Victory on Thu Jun 04, 2009 10:07 pm

http://www.cqpolitics.com/wmspage.cfm?parm1=5&docID=news-000003132800

In this piece, former democratic congressional staffer John Edgell analyzes the decisions made by the Obama administration behind the national helath care plan using behavioral economics, game theory, prospect theory, and prisoner’s dilemma.
The piece to me is a bit verbose, but its an effort to explain the actions of the Congressional Budget Office appeasing not only the American citizens but also the drug companies, hospitals and medical device makers as well. He says these actions are trying to culminate in a Nash equilibrium and an incentive for these two sides to cooperate (meaning Americans stop being so demanding and the companies to not try to lobby against this plan) is that neither want to end up on "the wrong side of the pareto efficiency."

Lauren Victory

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Game theory in Terrorism

Post  Brooke Stanislawski on Fri Jun 05, 2009 3:42 am

http://www.antiwar.com/henderson/?articleid=7647

In this article, the writer comments on the influence of game theory in terrorism. He examines the reasons behind terrorism by stepping into their shoes to learn their motives in order to successfully apply game theory. He concludes that terrorists harm the countries with governments who are most likely to hinder the accomplishment of their goals. He comments, "If you want to avoid acts of terrorism carried out against people in your country, avoid getting involved in the affairs of other countries." Pushing on isolationism in the US international affairs, he proposes this solution to overcome the unfortunate Nash equilibrium outcomes that are not necessarily socially optimal.

On an additional note, this writer has some pretty extreme ideas as solutions to the problems that arise from game theory. For example, he advocates "completely abolishing U.S. immigration restrictions on nuclear engineers, bio-technicians, and the other technical professions whose practitioners could build weapons of mass destruction, as a carrot to entice them to settle in the United States." This seems to just be shifting the pay-offs around in the game theory matrix so that we have the advantage.

Brooke Stanislawski

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Burglary and Terrorism from the above link

Post  Philip Goins on Fri Jun 05, 2009 8:21 pm

Brooke Stanislawski wrote:http://www.antiwar.com/henderson/?articleid=7647

In this article, the writer comments on the influence of game theory in terrorism. He examines the reasons behind terrorism by stepping into their shoes to learn their motives in order to successfully apply game theory. He concludes that terrorists harm the countries with governments who are most likely to hinder the accomplishment of their goals. He comments, "If you want to avoid acts of terrorism carried out against people in your country, avoid getting involved in the affairs of other countries." Pushing on isolationism in the US international affairs, he proposes this solution to overcome the unfortunate Nash equilibrium outcomes that are not necessarily socially optimal.

On an additional note, this writer has some pretty extreme ideas as solutions to the problems that arise from game theory. For example, he advocates "completely abolishing U.S. immigration restrictions on nuclear engineers, bio-technicians, and the other technical professions whose practitioners could build weapons of mass destruction, as a carrot to entice them to settle in the United States." This seems to just be shifting the pay-offs around in the game theory matrix so that we have the advantage.
I think that burglary is not so simple. Because the payoff matrix for the resident vs. burglar for each decision are different, the burglar is likely to flee. If the burglar flees, he or she usually gets away. However, if there is a conflict, the family (one assumption made here) of the resident will likely call 911. This means that the survival rate of the resident is not terrible. However, the burglar is less likely to survive, because residents have incentive to make wounds lethal (surviving burglars can sue the resident in some cases). Also, the burglar, if he wins the conflict, will now be a murderer, which means that a large investigation will ensue, meaning that the likelihood of arrest and punishment are both far larger than before. So using the assumptions made here, the dominant strategy is for the burglar to flee, which is often the case. If the resident kills the burglar, it is usually considered self-defense, which results in no real loss.

Also, if nobody ever confronts the burglars, the possible penalties for burglaries are much lower, because they won't be caught as often, or risk their lives in the process. This could convince some people to engage in this activity who otherwise find it too dangerous.

As far as terrorism and war goes, the problem is similar to a modified dove-hawk problem. It is unlikely quite the same, because instead of a pool to draw from, many things in terrorism and war are zero-sum, and the gain from one equals the loss from the other, or is at least a negative gain. The best example is land. If you conquer 10 square miles, someone has lost 10 square miles. Now, one side may make better use of the land than the other, but one has a positive payoff, and the other player gets a negative one. If one side feels like it can get away with some aggression and get some gain, be it economic or military, they will probably try it. Terrorism is the same way. If there is no conflict back, then the terrorist or military action got what it wanted. This will only serve as a precedent to validate future engagement of the same behavior. Although peace is desirable for both parties, being aggressive vs. a passive target is even more desirable, because you get everything you want without compromising. So if there is an aggressive world leader, the isolationist, passive stance is weak, and will have a negative payoff. The best example of that of the concessions in the 1930's. Because there is no dominant strategy in such a game, saying "just be isolationist" will not be a viable option. The best solution is to figure out when peace is possible, and when it is not, using common sense and judgment.

Philip Goins

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