Game theory in the popular press.


Game theory and economics in the news

August 18, 2006 Ventura County Star, Health plan for small firms to shut down
Insurers participating in pooled-employer programs lose money, possibly due to adverse selection, as high-risk employees are more likely to select certain plans. (by Allison Bruce)
August 17, 2006 BBC News, All is fair in love, war and poker
Game theory can be used to become the world champion of poker and to understand the commitment power of engagement rings. (by Tim Harford)
August 11, 2006 Globe and Mail, Taxpayers will pay the tab when it's 'too big to fail'
New bond-rating system for Canadian banks takes into account the likelihood of government bailouts, recognizing moral hazard (by Harry Koza)
August 8, 2006 The Korea Times, Things to Check Before Buying Homes in US
New regulations encourage Korean citizens to purchase homes in the US, but information asymmetry and adverse selection require caution -- a simple tale of the lemons problem applied to homes. (by Chang Se-moon)
July 28, 2006 Investor's Business Daily, Let Employees Control Future Of Retirements
Adverse selection in the pension insurance market is overcome with mandating insurance coverage, but moral hazard persists. (by Jagadeesh Gokhale and Peter van Doren)
May 13, 2006 Slate, Risky Business
A discussion of the theoretical and psychological elements of risk in the insurance industry (by Tim Harford)
March 6, 2006 BusinessWeek, The Secret To Google's Success
Describes Google's and Yahoo's online auctions for ad space, delving into the theory of first- and second-price auctions, and the winner's curse.
October 11, 2005 BusinessWeek, A nobel letdown in economics
In response to the 2005 Nobel Prize, argues that game theory is merely a theoretical pastime, and experimental economics is the hope of progress for economics. (by Michael Mandel )
May 18, 2005 CBS News, Listen to the children
Major auction houses forced to play rock-paper-scissors over rights to auction eccentric millionaire's art. "Sotheby's decided to leave its decision to chance, and had no particular strategy." (by Lloyd Garver)
May 18, 2005 Philadelphia Inquirer, Filibuster fight goes to core of the Senate
In the battle over the use of the filibuster in the United States Senate, members are "like testosterone-crazed teenage drivers locked in a game of chicken." (by Dick Polman)
May 16, 2005 The Journal News, NY, Lucas' dark finale feels forced
Star Wars movie review and political commentary notes the fallen hero "Anakin morphs into a zero-sum tyrant ... almost the mirror image of George W. Bush." (by Kevin Canfield)
April 29, 2005 Financial Times, Jungle Theories
A rather scathing review of Paul Omerod's "Why Things Fail" which includes references to bounded rationality and evolutionary game theory in explaining business failures. (by Paul Ormerod)
April 29, 2005 New York Times, Rock, Paper, Payoff: Child's Play Wins Auction House an Art Sale
Major auction houses forced to play rock-paper-scissors over rights to auction eccentric millionaire's art. "Sotheby's decided to leave its decision to chance, and had no particular strategy." (by Carol Vogel)
February 2005 Fast Company, You got game theory!
A somewhat disingenuous critique of game theory in which the author finds that no academic game theorist can provide concrete examples of game theory used by businesses. (by Martin Kihn)
April 1, 2004 Mercury News, Wages are key to offshoring
Argues that outsourcing of American jobs is a tragedy of the commons in which each company raises its profits but leads to less purchasing power at home.
March 28, 2004 Times UK, Recession and other terrorist myths
Notes that international cooperation to fight terrorism is a prisoner's dilemma with each nation having incentive to do less than its share.
March 2, 2004 Miami Herald, Wireless world awaits next big move
Cites an executive who notes that to sift through future scenarios for the telecom industry, "you need game theory to work them all out."
2004 Auction World, The winner's curse
A leading auctioneer discusses the winner's curse, reflecting industry experience but only a vague, rudimentary view of auction theory (by Deb Weidenhamer)
November 11, 2003 The Register, Oracle chokes on PeopleSoft's poison pill
Strategic commitment highlighted through a poision pill provision, creating an additional $800 million cost to be assumed by Oracle in case of a takeover.
November 1, 2003 Business 2.0, The card sharks from Silicon Valley
The new champions of poker include those skilled in probability and game theory (by Paul Keegan)
October 27, 2003 The Washington Post, Concert tickets moving to e-auctions
Ticketmaster begins to sell some concert tickets through auctions attempting to appropriate some surplus currently going to scalpers. (by Leslie Walker)
October 27, 2003 Houston Chronicle, Extra life insurance from employer often too costly
Employer life insurance is too costly due to adverse selection. Only the sickest employees sign up, leading to higher premiums.
October 9, 2003 The Economist, Fat Cats Feeding
Discusses trends in executive incentive pay in light of recent scandals.
October 6, 2003 Newsweek, An experimental mind
Highlights Vernon Smith's contributions to behavioral economics and notes how the field is finding new applications.
August 7, 2003 TechNewsWorld, Neural-network technology moves into the mainstream
Notes how several companies combine neural networks with game theory to create software to mine consumer data and create targeted campaigns.
August 3, 2003 New Scientist, Biggest not always the daddy in mating game
In the evolutionary mating game, experienced partners of a number of species prefer weaker males, potentially as a signal of less abuse to come.
July 16, 2003 Kansas City Star, This deal had losers, not victims
A judge believes that investors should take responsibility for stock market losses. Allowing losers to sue brokerages would create a moral hazard.
June 8, 2003 New York Times, Hollywood Defections Leave Agency Low on Tinsel
Lack of new talent means Hollywood talent agencies playing zero sum game, fighting over fixed resources.
May 30, 2003 Business Week, The Jobs Wizard of Wharton?
New director of career services at Wharton uses game theory for optimal interview scheduling.
March 30, 2003 Cincinnati Enquirer, How smart is it to be trusting?
Being trusting in business is not naive but an optimal way to play repeated prisoner's dilemmas according to Axelrod's findings.
March 16, 2003 Post-Gazette , Bush is playing 'chicken' not only with Saddam, but with the U.N. and allies, as well
Diplomatic and military brinkmanship games require strong commitments to win. Who will blink first on each front?
February 17, 2003 Slate, Fortune 500, meet Daytona 500: What NASCAR can teach us about business
Race cars drafting resemble a stag hunt game; racers balance cooperation and aggression.
February 16, 2003 Cariocas Press Release, Cariocas raises $5.25 million in second-round funding
Marketing firm creates customer loyalty and retention products through applications of game theory.
January 31, 2003 Wall Street Journal, Ford, GM escalate price war with latest rebates for SUVs
Price wars continue in the prisoner's dilemma of automotive pricing.
January 23, 2003 Los Angeles Times, Do the math: Rooting out terrorists is tricky business
Bayes' Rule indicates that even if we can predict a future terrorist with great accuracy, we will usually be wrong.
January 11, 2003 Business Standard, The games anti-Keynesians play
Game theorist John Nash likes Keynesian economists to Bolsheviks, speaks against nation-controlled currencies.
January 9, 2003 Washington Post, Finding shelter with Uncle Sam
Companies increasingly use incentive pay to shift profit risks to employees.
December 6, 2002 Disinformation, The art of mega deals
Rupert Murdoch's success in business is partly the result of "understanding how game theory shaped deal negotiations and inter-firm competition" (by Alex Burns)
November 29, 2002 St. Petersburg Times, Whom do drug benefit managers help?
Suggests that a Medicare prescription benefit would result in financial troubles due to adverse selection.
November 17, 2002 San Francisco Chronicle, Key Enron energy trader excelled at power game
Timothy Belden, at the center of the Enron scandal, studied game theory at Berkeley.
November 15, 2002 Miami Herald, Nash of 'A Beautiful Mind' fame testifies in Benlate case
John Nash acts as expert witness in support of game theory in the court room.
October 31, 2002 The Economist, Setting the trap
Applauds U.S.-style antitrust laws that provide immunity to cartel members who come forward as a "clever use of game theory" creating a race to cooperate.
October 19, 2002 BBC News, Coffee cartel shuts up shop
Association of Coffee Producing Countries fails to maintain prices and cooperation, abandons collusion.
October 11, 2002 Business Week, Nobel laurels for an odd couple
Nobel prize awarded for pioneering work in experimental economics and behavioral game theory.
August 29, 2002 New York Times, When economics shifts from science to engineering
Economists design market mechanisms including auctions and the National Resident Matching Program.
July 31, 2002 Wired, Game theory for real people
Argues for interdisciplinary approaches to game theory to replace rational paradigms.
July 30, 2002 Forbes, How to salvage stock options
How stock option bonuses can align incentives of shareholders and executives.
July 30, 2002 Miami Herald, Market decline reveals hazards
Stock options create a moral hazard, incentives for short-term stock price spikes.
July 30, 2002 Financial Times, In search of self-interest
Considers whether historical figures in politics and business satisfy the assumptions of homo economicus, and notes that the definition is quite similar to that of a sociopath. (by John Kay)
July 29, 2002 InfoWorld, Incentive Systems announces name change, new EIM suite
Discusses the rising business of software for managing incentive pay of sales forces.
April 1, 2002 Entrepeneur Magazine, The Art of (Price) War
Price wars are often not sustainable and value-pricing may be a better proposition.
March 22, 2002 Video Business, A Game of Chicken
Movie studios and movie rental stores are embroiled in a game of chicken according to executives.
March 18, 2002 Business Week, Game theory's hidden holes
Disequilibrium play in the traveler's dilemma and games with mixed strategies
February 9, 2002 CNet, Partners today, rivals tomorrow
Notes the need to consider strategic moves by current partners, including post-contractual hold up and moral hazard.
January 3, 2002 Business World, Who will blink first in German telecoms poker?
German auction for new-generation mobile licenses
December 21, 2001, Notes on the economics of game theory
Provides extensive introduction to game theory and argues that Eastern Europeans view business culture as a zero-sum game.
November 22, 2001 The Guardian, EC fines 'Vitamin Inc' cartel
Cooperation among European vitamin manufacturers deemed collusive.
September 10, 2001 Forbes, The tragedy of the commons
Discusses web-based business plans in light of the tragedy of the commons and the need to privatize Web resources.
June 18, 2001 Business Week, California's giant game of chicken
Energy companies play game of chicken with regulators
June 1, 2001 CFO Magazine, Building a better carrot
Companies struggle with moral hazard and offer incentive pay to even lower-level employees.
March 23, 2001 Dayton Business Journal, Game theory applied to lure health care workers
Hospitals bidding for nurses find themselves in a prisoner's dilemma.
February 8, 2001 USA Today, Cruise lines draw profits from selling works of art
How the excitement of art auctions at sea leads participants to overbid and overpay.
2001 Technology Acquisition Update, Negotiating when value is not tangible
Provides a guide to negotiation in low-information environments, and notes the role of perception.
October 18, 2000 CNET News, Revenue-sharing contracts boost supply chain performance
Blockbuster experience highlights greater profits from negotiating revenue sharing arrangements in the supply chain.
October 4, 2000 Business World, The unbearable lightness of ad revenue
Electronic commerce: constant-sum games in online advertising
July 12, 2000 Financial Times, Beauty and the bidder
Auctions are useful market allocation mechanisms when the reward is mostly monetary, but do poorly when the prize is of psychological value. (by John Kay)
June 19, 2000 eeTimes, Bill Gates could gain a lot from a little game theory
Discusses tit-for-tat as an optimal strategy in repeated games
June 1, 2000, The 2000 compensation survey: Riding the bull
Stock options reward executives when prices rise but this does not mean incentives are aligned.
March 20, 2000 BusinessWeek, Online Auctions: Going, Going, Gone...Sucker!
Despite the popularity of online auction sites, auctions suffer from several shortcomings including the winner's curse and design issues. (by Peter Coy)
April 14, 1999 Financial Times, Playing chicken can clip one's wings
Describes how the game of chicken applies not only to film versions of teenage angst, but also to common business situations. (by John Kay)
October 1, 1998 Fast Company, Decisions, decisions
Famous people describe their decision-making paradigms
July 1, 1998 Business Week, Game theory wasn't meant to be a forecasting tool
A brief letter on game theory 's use in business to model interactive decision-making.
June 11, 1998 Business Week, The tortured genius behind game theory
A book review of A Beautiful Mind about John Nash.
November 24, 1997 The Business Journal (Milwaukee), In match penny stock theory, playing to win is a losing bet
Why beating the S&P is like playing matching pennies
March 14, 1997 Financial Times, Lemon economics
Only recently have economists provided explanations for the existence of advertising. It may be informative, reducing the lemons problem, or a commitment device, by "burning money." (by John Kay)
November 18, 1996 Wall Street Journal, Even a losing bid can pay off
Examines strategic moves that result in other participants paying you to play the game.
September 1, 1996 Business 2.0, Business as a war game
Bell Atlantic Chairman explains use of game theory in modern management
May 1, 1996 MAA Online, The five percent solution
Reflections on the role of math and game theory in business
January 25, 1996 Investor's Business Daily, Let Game Theory Begin: Anticipating Your Rival
Discusses the role of game theory in business
April 1, 1983 The Freeman, Free riders face a rocky road
Argues that even though employees free ride on union power by receiving benefits without being members, this is a valid check on union power.