Click For Photo: https://3c1703fe8d.site.internapcdn.net/newman/gfx/news/hires/2019/baseball.jpg
When most people think of a "game," they might imagine checkers or hopscotch. But in game theory, a game is defined as any type of scenario where there's an interaction between different decision-makers, or players, each of whom has well-defined preferences. Oftentimes, players have the option to pay to change the rules before the game is played, like bribing an umpire in baseball.
Game theorists study these decisions, but previous analyses assume the decision-makers always do what is best for them—they are fully rational—which is not always realistic.
SFI - Professor - David - Wolpert - Economist
So SFI Professor David Wolpert and economist Justin Grana, a former SFI postdoctoral scholar, wanted to inject some humanity into the players. They analyzed games with players who were subject to error, or "boundedly rational." The resulting framework was published in July in the paper "How Much Would You Pay to Change a Game before Playing It?" in Entropy.
To help understand their analysis, take the baseball example: Imagine you manage a baseball team and have the opportunity to pay the umpires to favor your team. Game theory says that how much you are willing to pay depends on whether your opponent can see that you have paid to change the rules...
Wake Up To Breaking News!
Do you exist for Something or Nothing?