Level-k Thinking: New modeling possibilities?

有趣的觀點:

Consider a game where everyone in a classroom picks a number between 0 and 100. The person closest to half the average wins.

Obviously, picking a number over 50 would be silly. Based on this, picking a number over 25 would be silly. Similarly, picking a number over 12.5 would be silly. Continuing this line of thought, picking any number other than 0 would be silly. These thoughts show the level of thinking of those involved, from level-1 to level-infinity.

Level-k thinking analyzes such games. In actual experiments, players never pick 0, which would be suggested by a Nash equilibrium. Instead, they utilize many different levels of thinking.

使用 Level-k 來 model 不外乎就是讓均衡符合實際的狀況。但是他有一個很強的假設，level-2 的 player 一定要假設他認為其他的 player 是 level-1 或更低，他不能認為有其他 player 是 level-3 或以上的。因為若他認為有人是 level-3，則理性的他，就不再是 level-2 了。

所以為了讓結果更符合實際狀況，level-k thinking 使用了同樣不合理的假設。

Good Book: The Logic of Life - Uncovering the New Economics of Everything

我只有讀第一章，但是已經馬上愛上 Tim Harford 的文筆了。

第一章，Harford 就解釋為何經濟學是一個很好的工具。念經濟學的人，念到最後會時常對這科目失去信心，不相信自己念的東西。然而，Harford 這本書是試圖說服大眾經濟思維裡的 "理性" 的強大力量，他同時也讓我重新找回對這科目的興趣。他寫道:

Does this mean that rational choice theory is as much use as flat earth theory? No. It's more like a perfectly spherical earth theory. The earth isn't a perfect sphere, as anyone who has climbed Mount Everest will tell you. But it's nearly a sphere, and for many purposes, the simplification that the earth is spherical will do nicely.

歐巴馬的經濟智囊團

From

Like Bill Clinton in 1992, Obama's campaign boasts a cadre of credentialed achievers. Intellectually, however, the Obamanauts couldn't be more different. Clinton delighted in surrounding himself with big-think public intellectuals--like economics commentator Robert Reich and political philosopher Bill Galston. You'd be hard-pressed to find a political philosopher in Obama's inner wonk-dom. His is dominated by a group of first-rate economists, beginning with Goolsbee, one of the profession's most respected tax experts. A Harvard economist named Jeff Liebman has been influential in helping Obama think through budget and retirement issues; another, David Cutler, helped shape his views on health care. Goolsbee, in particular, is an almost unprecedented figure in Democratic politics: an academic economist with a top campaign position and the candidate's ear.

可以從台灣身上學的寶貴經驗

今天早上在德州上演了一場對決: Obama vs. Clinton 的辯論

我個人認為Obama四平八穩，有領導者的風範，而Clinton的表現也非常有風度，雖然落後但是仍然很有風度 (不像台灣的政治人物)。但是很顯然的Clinton很想強調自己的健保提案比Obama的更好。而觀察家竟然一致同意，Clinton的確在健保上勝Obama。

But it was by no means a poor performance for Clinton, and she did successfully draw some contrasts with Obama on his health care stance — an issue in which she holds the upper hand. Obama's plan could leave many uninsured, and Clinton effectively stressed this point in one of her strongest moments of the debate. She immediately put Obama on the defensive about his own plan and proved she understands this issue through and through.

????!!!!!!

這太可笑了! Clinton的健保是一個mandante。也就是所有的人都要購買健保，不購買者會被罰錢的! 但是Obama是降低價格好讓大家都有機會享有健保。一個是有選擇餘地的，另一個是被逼迫的，你要哪一種!?

Clinton的政策不只違反經濟sense，也違反了美國建國的精神!

只是一場選舉

Great Piece!

This election is certainly important. But based on the historical record, it isn’t likely to result in a major swing in economic policy. Fundamentally, democracy is not a finely tuned mechanism that can be used to direct economic policy as a lever might lift a pulley. The connection between what voters want, or think they want, and what ultimately happens in the economy, is far less direct.

.....THAT might sound pessimistic, but it’s not. Many Americans will be living longer, finding new sources of learning and recreation, creating more rewarding jobs, striking up new loves and friendships, and, yes, earning more money. Just don’t expect most of these gains to come out of the voting booth or, for that matter, Washington.

這是在講美國的選舉。但是廣義而言這也可以當成今年所有面臨抉擇的選民所必須面對的事實，其實，你今年選誰對你的影響其實是有限的。

Wisdom of the Crowd

Terrific website!

以後有什麼國際大事應該參考這個! 不知道什麼時候會放台灣大選的預測?

ps. 看樣子，Obama 極有可能被民主黨提名! Which is great!

Pedal to the Metal: What happens when signals change

上星期有一則新聞:

在紅綠燈上加裝倒數計時器日漸普及，但交通部運輸研究所的報告指出，加裝綠燈倒數器的路口肇事件數比設置前多一倍，加裝紅燈倒數器則減少一半，兩者兼有的路口肇事件數增加一九％。運研所建議，儘速拆除綠燈倒數計時器，或關閉功能。

這個跟 prospect theory 下的 loss aversion 有沒有關係? 我個人覺得有。

我猜想(也希望)若期望理論的基礎能更穩固，他能解釋更多元的人類行為，也能帶給個經一些新的刺激。

老虎伍茲 vs. 其他選手: 其他選手會變弱?

答案是:會!

簡單來講，老虎伍茲太強了!所以搞的其他選手都沒有誘因好好打。

What Every Economics Lecture Should be Like

Steven Levitt 寫說他有一次請了一位特別來賓到他的課堂上:

I brought in a very high-priced call girl to guest lecture at my undergraduate
Economics of Crime class.

那堂課的評價呢?:

The next day, I asked my students whether they liked the lecture. More than one-third of them said it was the single best lecture they had attended in their
four years of college. I had to agree with them.

話說那一堂課有一些有趣的對話:

One of his research subjects is a former computer programmer who charges $300 an hour as a high-end call girl. Levitt asked her if she was happy when her “client line” rang on her Palm Pilot. She told him that she wasn’t happy, but indifferent. He told her that meant she was not charging enough for her services. Later,Levitt offered to pay her the hourly rate she charged clients if she would come speak to his economics class. He was surprised, however,when one of the students asked the prostitute what she charged and she replied, “$400 an hour.” The student then asked her how she had determined that rate. “She turned to me,” Levitt recalled, “flashed me this huge smile and said, ‘Well, I was talking with Professor Levitt and he convinced me that my services were worth more than I was previously charging.