Several posts this week about game theory as applied to various circumstances. There were some very creative applications, ranging from loolooloocy’s analysis of the dating games in TV show HOUSE, to several political issues: the Israel and Hezbollah conflict, democratization in Russia, presidential elections, and the Cold War.

Many of these posts give examples of situations of reaching a Nash Equilibrium that doesn’t maximize social welfare. In fact many real-life situations mirror the Prisoner’s Dilemma, where different sides may have a more favorable option to choose given all possibilities from the other side, but where this N.E. leads to a non socially-optimal result. How unfortunate that this is the way that so many issues pan out in the world today. If only game theory experts who are interested in maximizing social welfare ruled the world, eh?

Irishlass talks about how the Prisoner’s Dilemma applies to the law as well, where a pro-plaintiff product liability rule is the best choice for two states, but where this reduces social welfare.

Also touched upon this week: the Blu-ray/HD battle. Mltstar4 gets ahead in the lecture material to talk about how the popularity of Blu-ray is attributable to network effects, such as those covered in Tipping Point. Jad346 goes on to show some game theory scenarios between Toshiba/HD and Sony/Blu-ray.

Keep up the good work, everyone! Definitely read posts from the other students because they might spark an interest that could help you with your own postings, or just help you learn something new or think about it in a new way.