Who knows, maybe I’ll try to get to them all. Here’s the first:
What impact will algorithmic game theory have on economics?
I’d start by asking: will game theory pure and simple have (further) impact on economics? And I’d say basically "no." The common concepts and tricks of game theory are invaluable but we already have those and I don’t see any more coming down the pike. Algorithmic game theory will address problems internal to game theory and within that context it will flourish. Finding equilibria, and discriminating among multiple equilibria, are otherwise very difficult problems and AGT is a natural way to crack those nuts. So AGT will have continued practical applications in computer science and problems of engineering. But it won’t much affect how most economists think about the world or do their research.
As for NBA analysis, I’ll just say that a) Boston is still an odds-on favorite, b) No one ever really told us what happened to Andrew Bynum, and c) Even though Phoenix probably won’t make it, the Shaq trade was very clearly a good idea and all you doubters should offer up mea culpas.
We often think of an equilibrium as a calculation, sometimes easy (two curves intersecting), sometimes huge (millions of people interacting). In any case, there is a theoretical possibility of calculating the equilibrium, even though it is generally not feasible for lack of knowledge and computing power. So it is not impossible that the market indeed ‘tends toward equilibrium’.
But for some companies the discovery an algorithm can result in improving their P&L. Google, or the Netflix contest come to my mind, but this is true of brick & mortar companies, too. In this case, there is no possibility – not even theoretical – to be sure that a given strategy is optimal. The only proof of this kind of pudding is in the eating. Maybe this could influence the way we think about equilibrium in economics.
Hmmm, mea culpa?
Marion +7 on court/off court for the Suns this year; Shaq +.4. (I thought at the time of the trade that they were probably better off not even playing him, but he’s been fine.)
Win shares/loss shares: Marion-20:2; Shaq-5:4. Marion got hurt, but Shaq was a much much bigger injury risk at the time of the trade.
He has kind of improved their interior defense just by being big, and by not being Amare, but he’s also a terrible defender. And of course Marion is a great defender…
Remains one of the dumber trades out there.
I used html tags in the last post to denote sarcasm. Guess they didn’t show up.
Is the free rider problem really that much of a problem?
In politics, the first, last, and most effective justification given for just about every plausibly useful government program from public education to national defense is that one must pay “his share” to the cost of a civil society.
Well, nevermind that we spend more on national defense than all other nations combined and our borders are sieves. Nevermind that our schools suck. Anyway, is the free-rider argument really all that important.
My personal opinion is that capitalism provides the luxury of having a bloated and bellicose defense and the luxury of having lax schools.
1. Phoenix are now in a worse position against San Antonio than they were last, without Shaq.
2. Shaq is a 12 minute player: good in the first quarter and progressively worse as he gets tired. He can be effectively guarded by Kurt Thomas without help in the fourth quarter.
3. Marion could do something about Parker and Ginobilli, but Shaq’s help-defense is nonexistent.
4. Phoenix gets to pay him $40 million over the next two years, as shaq gets more decrepit.
Which of the foregoing is a “very clearly a good idea”? You should offer “all us doubters” up mea culpas.
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