The Price of Anarchy
This short piece is an attempt to explain a theorem from computer science
which provides a lower bound on the performance of unregulated networks. You
can read about this concept in wikipedia (just type in the title into google to
get
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Michael Peters
September 2, 2014
One of the problems with taking a standard Arrow Debreu model to real
markets arises because real markets have a lot of heterogeneity. The same
good trades at many dierent prices, brands proliferate, and, p
GAME THEORY PROBLEMS
1. (Braess paradox) The following picture shows a simple directed graph which
is to be interpreted as a trac network. Cars travel along the edges of this graph,
or the roads
C
x
1
A
B
1
x
D
There are two cars that want to get from nod
Problem Set
1. A seller is privately informed of the value v of the good that she sells to
a buyer. The buyer prior belief on v is uniformly distributed on [x, y]
with 0 < x < y. The good is worth 3v to the buyer. Suppose the buyer
proposes a price p and
BAYESIAN EQUILIBRIUM
MICHAEL PETERS
The games like matching pennies and prisoners dilemma that form the core of
most undergrad game theory courses are games in which players know each others
preferences. Notions like iterated deletion of dominated strateg