Posts Tagged ‘game theory

17
Aug
09

Bruce Bueno de Mesquita

Starting today, One-post-daily will also feature personalities. We would try profiling them and figuring out their claim to fame. We start off with “Bruce Bueno de Mesquita”

Can a fringe branch of mathematics forecast the future? This special adviser to the CIA, Fortune 500 companies, and the U.S. Department of Defense certainly thinks so.

Mesquita says that a computer model he built and has perfected over the last 25 years can predict the outcome of virtually any international conflict, provided the basic input is accurate. And his predictions are alarmingly specific. His predictions about issues that concern the CIA were 90% accurate as compared to the experts on the subject who were less than 50% accurate.

An Instance

Back in March 2004, when al-Qaeda bombed a Madrid train station, influencing the course of Spain’s general election three days later, a lot of U.S. security folks were nervous. Worried that al-Qaeda might try something similar here in the run-up to the November, 2004, presidential elections, the Pentagon hired Bueno de Mesquita to run some data through his forecasting model to tell them what to expect. The results were unequivocal. He said there would be no homeland attack. He also indicated that bin Laden’s second-in-command, Ayman al-Zawahiri, would resurface around Thanksgiving, 2004. Just after the elections in November that year, Zawahiri released a new videotape. Bueno de Mesquita was right on both counts. One of the things government needs most is advice that’s precise and not wishy-washy and that’s where Mesquita comes into picture.

And to do this he starts with some basic assumptions, uses game theory frameworks and mathematical computations to find a plaussible solution.

His next prediction is on the future of Iran and how it would handle the pressures of the USA and the European Union and whether Iran would go ahead and make nuclear weapons. His theory, simulation and results are explained in this talk @ TEDtalks.

The same are explained in fair detail in this blog

Very Interesting!

Some more reads include wiki and this post on The new Nostradamus

25
Jul
09

Prisoner’s Dilemma – Real life situations

People always shouting over the phone are a major irritant for me at my workplace. Just thinking about it made me realize that this is just a case of prisoner’s dilemma. Just a note on prisoner’s dilemma before I explain my views.

Loosely defined, it’s a game theory situation where each person tries to maximize his own payoff regardless of whatever the other people do, and ultimately everybody in the situation end up being worse off than what they had been had they been more considerate about the other people. Wiki provides elaborate details for interested readers.

Coming back to the situation, when one person starts shouting, the other person shouts because otherwise he can’t hear. Similarly others follow and soon, everybody start shouting. Thus it becomes inconvenient for everybody when just by talking softly everybody could have been better off.

Some more interesting real life examples are as below (read more here):

  • A club has a fire, and all rush for the exits, preventing the exit of anyone; as a result, all perish.
  • Athlete A uses steroids, which gives him a competitive advantage. Other athletes are forced to use steroids to retain parity. As a result, no athlete is given a competitive advantage, but all are subjected to the hazards of steroids.
  • Big kids “pick on” little kids, and society allows it (“you have to learn how to defend yourself”). Thus, a kid must “act tough” to develop a “rep,” and avoid being singled out. Soon kids become teens become adults, and fists become knives become guns, and gangs become organized gangs become organized crime.
  • The pollution which results from the collective actions of individual drivers who believe that their one act of driving “doesn’t matter,” resulting in air no one wants to breathe.
  • A depositor hears that a bank is in trouble, and goes to pull out his savings. Others are forced to pull out their savings as a “run” begins on the bank’s savings, and the bank collapses.



So what’s this blog about?

Another attempt? Well yes. Attempting to figure out another sustainable model (there are some other attempts going on parallel-ly). Well, we have a lot of questions in mind. we read up stuff, we do some research to find answers to these questions. This is an attempt to publish that little 15-20 minute research.
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