5 ms·

The obscure game-theory problem that explains why rich countries are rich

• mynameishere 19y ago
  In real hunts, you have this one player called the "alpha male". If you think cooperation is the hallmark of such arrangements, try a bit of defiance...
  • eru 19y ago
    Sure, following a leader is a perfectly acceptable form of cooperation for game theorists.
• danteembermage 19y ago
  The Normal form of the game is linked in the article stag rabbit stag 10,10 0,8 rabbit 8,0 7,7 Both players choose stag or rabbit and score according to the cell on the grid that matches both moves. So 10, 10 is better than 7,7 for everyone so it is Pareto optimal however a player choosing rabbit gets 8 or 7 versus 10 or 0 for stag, so the uncertainty is higher for stag. I think a way to translate the article into this framework is to add players, reducing the likelihood of getting saddled with a zero if you trust. Then, when someone rabbits, redistribute from some 10s to the zero guy. Instead of 10 a lot and 0 some, you get 10 some and 9 a lot, better than 8 or 7 always. Hence credit card interest rates, and credit cards existing at all (you pay 14% because lots of folks default, but without a big pool it would be too risky for the lender) However, lots of rabbits can swamp this arrangement; a bank run would be a good example. Then you rationally go rabbit because your 10 9 is turning into a 5 3. So perhaps institutionalizing trust is approximately equal to diversification.
• kul 19y ago
  trust comes from a legal framework. he overlooks that.