nash equilibrium

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A game of cartel combat

In a corporate landscape seemingly rife with dubious activity and insufficient regulatory reach, the ACCC’s game theory based whistleblower approach to cartels may be an unexpected diamond in the rough. Tingnan Li forgoes a cape but nevertheless investigates this unlikely hero.

Why Free Trade?

A Game theory analysis of the Trans-Pacific Partnership.

This article first appeared in Short Supply 2015 – check out the full magazine via the Short Supply tab at the top of this page!

Nuclear Deterrence and Profit Maximisation

In October 1962, the world watched on anxiously as the US and the USSR became precariously poised on the verge of mutually assured destruction during a confrontation known as the Cuban Missile Crisis. This tense 13-day period is considered by many as the point during the Cold War in which the two superpowers came closest to full scale nuclear warfare.

So why didn’t they?

And how is this relevant to economics?

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Irrational Strategies: Dealing with an Altruistic Prisoner

So you are presented with the following prisoner’s dilemma game. What is your choice? Most economics freshmen will have learnt that when presented with the choices of cooperation or finking, finking is the dominant strategy, and an all-fink nightmare is the only pure strategy Nash equilibrium. Against homo economicus, the cold and rational decision maker, your best bet would certainly be with finking. But against the average Joe, would you be able to assume rationality? Does the decision to cooperate necessarily imply irrationality on his behalf?

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