Summary of Presh Talwalkar's The Joy of Game Theory

Everest Media

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 There are hundreds of gas stations around San Francisco in the California Bay Area. They are highly clustered, and this is partly due to population clustering. The phenomenon is also explained by a simple game about location competition.
#2 There are two players in this game: a hot dog stand and a beach. The beach is a straight shoreline, in which customers are uniformly spread out. The beach is represented by a number line ranging from -1 at one endpoint to 1 at the other.
#3 You can approach the game of business by ignoring the competition. Assume you are the only hot dog stand on a beach. Where would you want to locate. The answer is simple: any place you want. You are a monopolist, and customers will have to walk to you no matter where you are.
#4 The logic behind game theory is that if either hot dog stand chooses the center point, the other will want to copy since it is better to split the market than end up on one side that yields less than half the market.

Sujets

• Game theory

Informations

• Publié par: Everest Media LLC
• Date de parution: 13 mars 2022
• Nombre de lectures: 0
• EAN13: 9781669353911
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Insights on Presh Talwalkar's The Joy of Game Theory
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8 Insights from Chapter 9 Insights from Chapter 10 Insights from Chapter 11 Insights from Chapter 12 Insights from Chapter 13 Insights from Chapter 14 Insights from Chapter 15 Insights from Chapter 16 Insights from Chapter 17 Insights from Chapter 18 Insights from Chapter 19 Insights from Chapter 20 Insights from Chapter 21 Insights from Chapter 22
Insights from Chapter 1

#1

There are hundreds of gas stations around San Francisco in the California Bay Area. They are highly clustered, and this is partly due to population clustering. The phenomenon is also explained by a simple game about location competition.

#2

There are two players in this game: a hot dog stand and a beach. The beach is a straight shoreline, in which customers are uniformly spread out. The beach is represented by a number line ranging from -1 at one endpoint to 1 at the other.

#3

You can approach the game of business by ignoring the competition. Assume you are the only hot dog stand on a beach. Where would you want to locate. The answer is simple: any place you want. You are a monopolist, and customers will have to walk to you no matter where you are.

#4

The logic behind game theory is that if either hot dog stand chooses the center point, the other will want to copy since it is better to split the market than end up on one side that yields less than half the market.

#5

There is a mathematical way to describe how each stand would react to the other's choice. A best response is a location that one stand would choose optimally in response to a given position of the other stand's location. The two stands will split the market evenly when both pick the center.

#6

The equilibrium of the hot dog game is an annoying situation for many customers. The stands are located in the center of the beach instead of spreading out and being closer to beachgoers.

#7

The model explains the strategy behind why competitors locate so close to each other and compete on real estate. It can also be applied to political candidates, who seek the average vote. It explains why it is so hard to distinguish between candidates while they are campaigning for an election.

#8

When a store advertises it will match the price of any competitor, it sounds like the store is offering a good deal. But not only are they confident their prices are the lowest, but if you find a lower price anywhere else, they will even match it.

#9

The Bertrand Duopoly is a game in which two firms compete solely on price to customers that have no loyalty. It is often thought that a market with just a few firms will have high prices, but the stunning result of the Bertrand Duopoly model is that a market with only two firms can end up competing to the lowest price due to a bidding war.

#10

The Bertrand Duopoly model does not imply that heavily concentrated markets are price competitive. Businesses do not simply compete on price for customers; they take actions to maintain profits by locking in customers and trying to increase loyalty.

#11

A store may institute a price matching policy for a number of reasons. It is a good public relations technique, and it makes the claim that the business has the lowest price more believable.