Game Theory: China’s Air Crisis on Economy

China’s Environmental crisis has become one of the most counterproductive obstacle that challenges the colossus country’s rapid economic growth. As a country that had a GDP that grew more than 10 percent per year for more than a decade. It has shortly fallen off due to the factor of a toxic growth in the air. Last December, China was faced with two records of their highest red marks of air pollution in Beijing and almost 300 other cities. The toxic air has developed to a point that ceased the rapid industrialization of this country and caused a drop of 6.5 percent towards their GDP annually, additionally it has caused more than 1.6 mill people per year to die from breathing in this toxic smog.

In according to the topics that was covered in class. For the past decade, China focused their strategy on the “game” of rapid growth of their economy and industrialization. In this article, the writer talks about how China was too focused on climbing the ladder on an economic level to finally  to realize the damages that air pollution by economic growth has caused. The country is currently at a point where pollution has become deadly and thus changes to the strategies of the government had to be made in order to prevent devastating damages on bother the environmental and economical level in the country. In 2014, China’s government noticed that pollution has increased drastically and thus has called for a “war” against this factor. By changing their strategy, in reducing pollution and funding into recovery. China’s government will be able to save from further damages. Although, the funds of air recover was high, thus causing the decline in the GDP of the country.


Prisoner’s Dilemma between doctors and patients relationship

Currently, doctors are suffering from divided loyalties in treating patients. Patients require treatment that can alleviate the pain immediately as possible. but for doctors, they know that giving immediate treatments, like antibiotics or other drug treatments will not result in best outcome for patients themselves or for society as a whole either. However, with the new polices of doctors being evaluated by patient’s satisfaction, doctors cannot ignore the patient’s demand, which this kinds of conflicts with patients put doctors into position of divided loyalties.

In a paper written by a team of mathematicians and physicians from South Florida University, points out this kind of phenomenon as in accordance with Prisoner’s Dilemma. Prisoner’s dilemma is example of a game analyzed in game theory. It is a situation in which the outcome of choice depends not solely on the rational individual’s choice, but also on the choice individual is interacting with. When patient requires doctors to prescribe a drug for the treatment and when doctors accept the requirement they will gain patient’s satisfaction and also the reputation, and patient and doctor will both better-off. However payoff of both agreeing to use of drug will be worse than the payoff both not using the drug.

One of the author of the paper, Ioannidis, said that although government intended to initiate such health care system to cut costs and improve health, it would increase conflicts between patients and doctors which would eventually results in inefficiency of medical examination. To restore a trusty between doctors and patients, which originally had to be, alternative of current health care system seems desperate.
How the doctor-patient relationship has become a prisoner’s dilemma

Geography of Genius

In this article Eric Weiner, a travel writer, argues that geniuses are a product of their surroundings and upbringing rather then the individual possessing something intrinsic to their nature. Weiner believes that harsh conditions or challenges bring about geniuses through hardship because it is essentially a necessity. Weiner argues that people who face adversity early either become depressed by their experiences or they can come out of it with a way to solve those challenges and usually in very creative ways.

How does this relate the topics covered in our class? Well essentially Weiner is proposing that their is homophily among the network labeled “geniuses”. Weiner points out that many geniuses happen to also be immigrants and proposes that this exposure many people and culture may have added in developing that persons creativity. In other words Weiner is noticing that geniuses have many weak connections to local bridge nodes in a sense. These nodes are individuals that behave or think differently than the general population and utilizing this “geniuses” can make jumps and connect ideas that formerly were not grouped together. Weiner however does admit he does not know why some who are faced with challenges end up depressed and why some come out being labeled genius which in other words means he has yet to discern if this is selection or social influence or potentially something that arises from affiliation networks since he proposes location is a large part of the process.

Can Game Theory Predict The President?

Colonel Blotto, a specific type of Game Theory, has many believing that you can actually predict the outcomes of things such as presidential elections, baseball games, or even a war.  Computer scientists have developed an algorithm that can solve this Colonel Blotto game. What this algorithm does is it asks for two players to distribute soldiers over a “battlefield” and randomly selects an area, and the player with more soldiers in that area wins.

The trick with this problem is to reduce things and scale it so it is applicable to real life. The algorithm has been tested and proved to be able to accurately predict how certain situations will play out and determine what needs to be improved upon to have a successful strategy. If this algorithm is applied to real life, it could be very useful for upcoming presidential campaigns. This “game” could show the nominees what they need to do to win the campaign, which area they need to focus on, and what they need to do to win the election. Of course, there are some issues with the algorithm in such that it cannot accurately account for random factors that may occur. This may allow to take a lot of the risk and guessing out of the equation when it comes to events. Imagine living in a world where you know if your sports team is going to win the game before the game even starts. What would even be the point of watching the game?


Link for the article:

Can game theory explain the Greek debt crisis?

During the summer of 2015, Greece was affected by a terrible economic situation. Greece was in the middle of a, (almost)  default and running on fumes. The Greek finance minister (Yanis Varoufakis) is an expert on game theory and this is what he applied when making decisions about Greece’s economic situation. He had to make a decision, either offer a three point plan, or let Greece fall into a default. This is not an easy choice for anyone to make, as there are a lot of possible outcomes and failures that could come with this decision. So, he weighed his choices and decided how to play the “game” that is planning his strategy.

The eurozone could either accept his plan or reject it, which would lead to a series of payoffs. Yanis wagered his bets on the fact that the eurozone would HAVE to accept the deal because game theory suggests that both players will use the strategy that provides the highest payoff, in this case, it was accepting the proposed deal. Ultimately, eurozone ended up accepting the plan and Yanis was correct in his predictions. Greece did not default and was able to pay back its debts. This shows that Game Theory can easily be applied to every realm of society and this is a very interesting interpretation of how Game Theory was applied when facing a financial crisis.

The whole article with diagrams that depict the choices of the minster can be found here:

Replacing Supreme Justice Scalia and the Prisoner’s Dilemma

Over the weekend we lost one of the nine justices on the Supreme Court, Anton Scalia. Sadly, Scalia died in his sleep. Shortly after the news broke about the Death of Justice Scalia, many politician’s and political analysts began to speculate on who his replacement would be. President Obama has the executive authority to name the next justice on the supreme court. Many politicians, mainly republicans, were in an uproar over Obama wanting to name a new Justice during the remaining months of his Presidential term. I am no political expert and have no insight or major political opinion on this matter. So what does this have to do with a class about the Economic Theory of Networks?


Actually the death of Justice Scalia has created a huge Prisoner’s Dilemma. A prisoners dilemma is when there are two players, and each player acts in their own best interest to pursue a course of action that does not result in an ideal outcome. In other words, each party chooses what gives them the best possible outcome.

You may be wondering, what does this have to do with the death of a Supreme Court Justice? First of all, any executive decision made by President Obama to nominate a new Justice must go through Congress. Easy, right? Not so much in this case. As most of you know President Obama is a Democrat, but the House and the Senate is controlled by the Republican party. This is where the prisoner’s dilemma comes into play. President Obama will most likely make his nomination for a Justice that fit in the Democratic mind set.The leaders of the House and Senate have already made it clear that any nomination by President Obama would be shot down if the nominee was part of the “Left Wing” way of thinking. 


Consumers Lose by More Product Choices

Ever since Dietrich Braess came up with the idea, people have been using Braess’ Paradox to clear up traffic in congested cities. It basically means that it is better to close a road that is jammed up instead of adding another road in that area, because it will only make travel times worse instead of helping. The article discusses how this same notion can be used when talking about consumer choices.

It explains how people are better off when they have less products to choose from instead of more. The article describes that when people have to choose a new computer, having many different options makes it difficult for them to research about each one. This in turns makes it harder to pick the best one. If they had less options, an increased number of people would be more fortunate in buying the better choice of computer.

The article goes on to state how Braess’ Paradox would be beneficial for product managers to give them an idea of when it would be good to initiate a new product into the market, or if it would be ideal to remove a certain product.

Within book Networks, Crowds, and Markets it states, “we all have an informal sense that upgrading a network has to be a good thing, and so it is surprising when it turns out to make things worse (233).” I always thought the opposite as well, that having more things to choose from would be beneficial. However, that is not always true and many times having to pick from a limited number of products is actually better.