Games such as baseball gambling and lotteries many

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Unformatted text preview: etworks, water, and other infrastructure. • Games, such as baseball, gambling, and lotteries: Many games involve complex calculations with probabilities. For example, a professional baseball pitcher’s choice of pitch has a complex interplay with the anticipation of the batter. For another example, computer rankings of sports teams based on win-loss records is a subject of interesting modeling. • Commerce, such as online auctions: Sellers post items online auction sites, setting initial prices and possibly hidden reserve prices, without complete knowledge of the total demand for the objects sold. 1.1. EMBRACING UNCERTAINTY 5 • Online search and advertising: Search engines decide which webpages and which advertisements to display in response to queuries, without knowing precisely what the viewer is seeking. • Personal financial decisions: Individuals make decisions about major purchases, investments, and insurance, in the presence of uncertainty. • Personal lifestyle decisions: Individuals make decisions about diet, exercise, studying for exams, investing in personal relationships, all in the face of uncertainty...
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