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97 - ”Do IJnnas Srnanfiarts T111111 yen mew 15ng A News...

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Unformatted text preview: ”Do IJnnas- Srnanfiarts. T111111» yen mew 15ng A. News CEJHBJmmns: Cum-m Dow Jones Reprints: This copy is for your personai non— —oommerciai use only. To order presentaticn- ready copies for distribution to your colieagues clients or customers use the Order Reprints tool at the bottom of any article or visit VWWV. djrepnnts. corn See a sampre reprint in PDF format. Order a reprint oithls article now "EHEGAME é OCTOBER14,2009 In NBC Deal, Learn From Game Theory By DENNIS K. BERMAN You read it here first. The much-discussed Comcast—NBC Universal deal is going to happen. Vivendi, which is deciding what to do with its 20% ownership in Generai Electric's NBC Universal, will flirt with IPOing its stake, but will relent to the Comcast plan. Surprisingly, the price will be lower than many expect. - Or at least, that's what the numbers on the spreadsheet predict. That spreadsheet is the work of Bruce Bueno de Mesquite, an unassuming-looking New York University and Stanford University researcher prone to big claims: Namely, that by using a mathematical model, he is uncommonly good at predicting the future. Dr. Bueno de Mesquita is in the wonky business of applied game theory. This is the stuff of Cold War strategists, who deployed computers to find the most logical choices for fighting a war. Dr. Bueno de Mesquita's innovation is to update many of those Atari-era concepts for a Wii generation. That means bringing sophisticated game theory and prediction techniques into everyday choices: local WSJ's Dennis Barman tells skeptical colleague Evan Newmark now sophisticated game misery and strategies _ _ _ applied during the Cold 'War could help predict the politics, legal battles, and yes, Wall Street deal making. outcome of a ComcastrNBC Universal deal. The 62—year—old has honed down many of these concepts into a new book, called "The Predictioneer‘s Game." If you can stomach the author's self—regard, it's a bracing, eye—opening primer into the strategic decision—making that lies at the heart of the merger game. Dr. Bueno de Mesquita is hostile to human sentiment. In his worldview, the world's actors —— be it priests, politicians, or bankers -- are cunning calculators of BRUCE BUENO DE . MESQUITA self interest. Mother Teresa? A do~gooder with a materialistic need for acclaim. ' What about a CEO considering the sale of her company? Like many people on Wall Street, Dr. Bueno de Mesquita favors big "golden parachutes" as a way to motivate CEOS to sell, and thus deliver a pay out for sharehoiders. This world may be brutal, but it is rational. And because it is rational, it can be observed, understood and quite often predicted or manipulated, says Dr. Bueno de Mesquite. The key to unlocking all this rests inside his mathematical model, which was developed over 30 years with early lof2 7/19/2010 11:09 PM ...
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