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Old 11-26-2010, 12:25 AM
 
Location: Conejo Valley, CA
12,470 posts, read 18,274,430 times
Reputation: 4343

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Quote:
Originally Posted by Mathguy View Post
So what? Well....there were those in this thread saying it could be expressed...
I guess you didn't get the part where I was refuted what you stated? You see, most of mathematics is not "physical" (actually....all), so the fact that some outcomes of games are not physical doesn't matter.

But yes, some of a branch of mathematics can't be expressed mathematically, that makes a lot of sense.
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Old 11-26-2010, 09:59 PM
 
111 posts, read 278,311 times
Reputation: 79
Quote:
Originally Posted by wilson1010 View Post
I hope you get some takers, but I kind of doubt it since you do not have a clue as to how to advance this topic. Go back to class, tell your Economics professor you tried but the people were too mean.

USER: Go to Great Debates and post there. You'll fit right in.

Is this at me? I hope not man. Anyway, now that some responses have been given I can be more specific and advance the discussion where you couldn't. My interests in GT are much more basic, or less mathematical. I feel that conventional economics fails to figure in the chaos that is the human decision making process.

Basically, my question is this: what do you think of the following paraphrase of Heyne:

Assume some seller knows with great accuracy the cost to himself to sell various quantities of his goods, and how many units of his goods consumers would be willing to purchase at different prices. So he can calculate precisely how much to charge. Economics, right?

But now what if his competitors monitor this behavior and adjust accordingly. So now the original seller's sales will be altered. So now what he does depends on what others expect him to do and ALSO what he expects them to do in anticipation of what they expect him to do.

Heyne's final point here is this: These situations are common in business, but they seem to introduce a fundamental indeterminacy into the relatively determinate world of supply, demand, and prices.


Seems to me, if you have not bored of this long post already, that the strategy of competition is looked at in a very cavalier manner in macroeconomics. The whole point of this post was to maybe play a game in the microeconomic world so maybe I could wrap my head around this better. Maybe we should pick a type of business to start?

I'm hoping for suggestions on ways to take a very empirical approach to this in hopes of applying it on a macro level eventually. Thanks for reading
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Old 11-28-2010, 01:06 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,274,430 times
Reputation: 4343
Quote:
Originally Posted by Jerksticks View Post
Heyne's final point here is this: These situations are common in business, but they seem to introduce a fundamental indeterminacy into the relatively determinate world of supply, demand, and prices.
They don't induce indeterminacy, they introduce non-linearity. From the perspective of the seller it may be indeterminate, but that is just because he doesn't know all the variables and perhaps doesn't have the computational power to analyze them. Physicist deal with deterministic non-linear systems all the time, so claiming that economics is some how in a poor position because economies are non-linear dynamical systems doesn't make much sense, the mathematical tools exist to analyze these systems, one of which is of course Game Theory.

Anyhow, models in marcoeconomics are often linear and don't look at the details you are speaking of, but that is exactly how it should be. Micro and Macro are two very different animals, trying to think of Macro as you would Mirco and vice versus is a big category mistake. Complex dynamical systems have emergent properties, these are marco properties that emergent from all the micro details. Due to the non-linearity its extremely difficult to predict the emergent property from the micro details, so we instead develop easier to work with linear models.

This same relationship exists throughout science, for example psychology and neuroscience, neuroscientists study the details of the brain where as psychologist study the emergent properties of all the detailed interactions that occur in the brain. A neuro-scientist would be almost clueless when it comes to predicting human behavior, and the psychologist is almost clueless when it comes to the exact neurological basis of memory.
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Old 11-29-2010, 01:19 PM
 
60,032 posts, read 46,737,580 times
Reputation: 37218
Quote:
Originally Posted by user_id View Post
I guess you didn't get the part where I was refuted what you stated? You see, most of mathematics is not "physical" (actually....all), so the fact that some outcomes of games are not physical doesn't matter.

But yes, some of a branch of mathematics can't be expressed mathematically, that makes a lot of sense.
On a side note....

Interesting concept though in that if a guy walks by a roulette table and sees 8 reds in a row....and thinks now is the time to bet black....he's using game theory. Now it's based upon faulty assumptions but it is game theory no less.
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Old 11-29-2010, 08:32 PM
 
Location: Vancouver, BC
547 posts, read 1,461,553 times
Reputation: 515
Game theory is a branch of microeconomics. Keynes is a macroeconomist. What are you trying to discuss?

Quote:
Originally Posted by txgolfer130 View Post
Agree in general, however, I don't agree that Economics is not a science. It is many things to many people based on view points. It is a social science, it is a scientific mathematical exercise, it is a behavioral science. And at the same time can be a philosophy as well as a means to a financial decision making process.

But I agree that in the end, game theory has to be reduced to a mathematical result, however even with a clear mathematical "winner", in game theory that is not always the winning choice.
Economics can not be a true science because it is impossible to conduct good experiments. The scientific method requires the use of experiments. Social science is not really a "science". Not that its results are any less valid, but you can't call it a science.

Quote:
Originally Posted by Jerksticks View Post
Is this at me? I hope not man. Anyway, now that some responses have been given I can be more specific and advance the discussion where you couldn't. My interests in GT are much more basic, or less mathematical. I feel that conventional economics fails to figure in the chaos that is the human decision making process.

Basically, my question is this: what do you think of the following paraphrase of Heyne:

Assume some seller knows with great accuracy the cost to himself to sell various quantities of his goods, and how many units of his goods consumers would be willing to purchase at different prices. So he can calculate precisely how much to charge. Economics, right?

But now what if his competitors monitor this behavior and adjust accordingly. So now the original seller's sales will be altered. So now what he does depends on what others expect him to do and ALSO what he expects them to do in anticipation of what they expect him to do.

Heyne's final point here is this: These situations are common in business, but they seem to introduce a fundamental indeterminacy into the relatively determinate world of supply, demand, and prices.
Did you learn about Cournot or Bertrand competition? Those two are some fairly basic economic theories to describe duopolies. However, those are fairly theoretical and are not very valid for all real world situations. But, price behaviour is definitely not chaos. There are some fairly stable equilibriums in most markets.
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