Its all in Game Theory Stupid!!!

Posted on August 28th, 2004 in Random - 6 comments

Next time you meet a crazy b skooler who sleeps at 5 or may be 7 in the morning dont start arguing with him about the rationale behind his deviant act against nature laws. There is lots of thoery and practical application behind his/her insane act. Got curious???, Read on.

(Warning: The following text is ‘high’ly technical and sometimes you may need to look into the references to understand the proceedings of the article.)


Lets assume that there is a b skool call WTSLAT (We Torture Students Like Any Thing).

Lets also assume that there are only 2 students in WTSLAT named Global Govinda and CP Khanna. The assumption that there are only 2 students is pretty much in line with all other microeconomics assumptions and it makes the task at hand very easy.

Now, lets assume that Global Govinda (Glogo) and CP khanna (Kha) have 3 ways each to spend their time. they are,

– Sleeping (S)

– Reading (Re)

– Neither Sleep Nor Reading (NeS NoRe)

Now, lets look at the payoffs (ie, the final salary they get, here the game is a zero-sum game with total salary both of them can get is at 12 lakhs per annum) for each of them for pursuing these options.

Clearly both ‘Kha’ and ‘Glogo’ have dominant strtategies. They are,

Thus both of them end up reading and end up getting equal salaries of 6lpa which in the first place they can get by either sleeping together (uninted pun :p) or neither sleeping togeher nor reading individually. But alas, being managers they are they work hard and end up getting the same.

That is all. The conclusion is clear as to why they seldom sleep peacefully. Well, now it is upto you in what way you want to intrepret the above article.

References for the poor soul:

http://www.gametheory.net/

http://www.digitaleconomist.com/game_theory.html

http://www.econ.uniurb.it/imgta/

http://myphlip.pearsoncmg.com/cw/mpchapter.cfm?vbcid=2052

One More Link

– Microeconomics by Pindyck, Robert S, and Rubenfeld


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6 Responses to “Its all in Game Theory Stupid!!!”

  1. Anonymous says:

    Gud Sow Chandoo
    Hope you are having a nice time there.
    Puneet aka Virus aka Calendar
    PGP@IIM A

  2. Bhars says:

    ROTFL Chandoo !

    It is majorly because it is a repetitive game and all through the years, the same equilibrium resulted, building too much credibility and predictability on the players ;(( building up the Nash equilibrium

    Trust me, couldn't have put game theory fundas in a better way :)))

    Have a nice time there...

  3. Anonymous says:

    chandoo chancless.. this is the ultmate application.. u canbecome the next nash .. man wow u gong abs great guns blazing away all the insane realities that we learn in the name of studies is it 🙂

    fundoo,man looking for to more such articles

    venkat

  4. Chandoo says:

    Thanks everyone for the valuable comments. Hope we B-skoolers use this fundae and bring some sanity back to our lives.

    ~C~

  5. Anonymous says:

    That was really good :).
    -Deepti @ PG

  6. Chandoo says:

    thank you 😀

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