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Republicans Are Upset About The National Debt Again

Discussion in 'GatorNana's Too Hot for Swamp Gas' started by studegator, Jan 19, 2021.

  1. tampagtr

    tampagtr VIP Member

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    Not to my ears, but I am not listening with economist ears. Obviously for any variable that can impact economic behavior, there is a maximizing point. Not disputing that basic truth, though there is epistemological issues in application. But I am only interested in the impact on a public policy issue potentially under debate>

    BTW, I have had Zachary Carter's (who knew our DL was so multifaceted?) "The Price of Peace" on reserve for awhile but I have put it off every time because I was in the middle of another read
     
  2. docspor

    docspor GC Hall of Fame

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    Speaking of economics & lineman. I taught Sam Adams (OL) Econ. He came to the final after being drafted.
     
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  3. tampagtr

    tampagtr VIP Member

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  4. docspor

    docspor GC Hall of Fame

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  5. tampagtr

    tampagtr VIP Member

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    Damn straight. I "hate" people like that. Makes me feel so unworthy
     
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  6. docspor

    docspor GC Hall of Fame

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    The smartest guy that I ever worked directly with came up with this (it's in my dissertation). I have never fully understood it, but it captures 4 dimensions. The last paper that we published together happened after he & the other co-author were dead. I have never been so over my head as when I had to do the last revisions by myself. I was definitely in fake it until you make it mode & I would have probably failed, but the journal was putting out a special edition to honor the guy responsible for the graph below, so they cut me some slack. Now, for the embarrassing part RSPD stands for rock, paper, scissors, D - which is a fourth strategy that is the 2nd best response to R,P & S. Game theory (econ) sez it should never be played, a weird dynamic model from theoretical biology sez it should, so we tested it. Biology won. Yes, grown ass men studying RPS.



    [​IMG]

    A nonconvergent solution of the discrete replicator dynamic for game RSPD. The initial condition is {0.036, 0.03, 0.034, 0.9}. Thin lines represent the wire frame of the simplex and above average payoff polyhedra of D. The black dot denotes the unique equilibrium {1/3,1/3,1/3,0}.
     
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  7. tampagtr

    tampagtr VIP Member

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    Wow. That is beyond my comprehension, but then I am no Keith Raniere (that's a joke, if you've seen the Vow)
     
  8. PerSeGator

    PerSeGator GC Hall of Fame

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    So you’re one of the people who does Rock Paper Scissors, gun I win.
     
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  9. docspor

    docspor GC Hall of Fame

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    While that graph is gnarly, what we were doing isn't hard to explain. Economists & theoretical biologist both study game theory. Economists initially approached it deductively/mathematically assuming fully rational & smart actors. Biologists approached it inductively assuming very crude adaptive organisms that learned by trial & error. In sum, econ sez people get to an equil by thinking about it, bio sez they get to an equil by adaptive processes.

    So, RPS has a unique equil of 1/3, 1/3, 1/3. When a 4th action is added that is a 2nd best response to R, P & S, econ/math sez it will NEVER be played b/c it is never a best response. Evolution is not survival of the fittest, it is survival of the above avg. So, these dynamic models from bio in simulations would place about 10% weight on D...that is it did not converge to the Nash Equil.

    All we did was have real people play it to see if they learned to stop playing D. Our results ended up being close to what the bio model predicted. That may sound dumb, but at the time, the notion that a dominated strategy (D - never a best response & hence cannot be supported by any beliefs that a rational person could have) would by played at all let alone persist over time was somewhat novel.
     
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  10. tampagtr

    tampagtr VIP Member

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    Thanks for trying to explain it to me. Though I've read at least some of those terms and type of reasoning before, I'm not someone who's going to be able to process that appropriately. It may be simple as you say but it impressed me
     
  11. PerSeGator

    PerSeGator GC Hall of Fame

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    People play suboptimal strategies in games with minimal or no stakes all the time. Ever watch people play fake poker? Even in games with real stakes, people playing optimal strategies is the exception, not the rule.

    The Nash equilibrium is located in the navel of academics.
     
  12. docspor

    docspor GC Hall of Fame

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    we paid em. I’ve easily blown through 250,000 of NSF money. Fun fact. John Nash paid people at Rand to play games with multiple equilibria. & that last part isn’t true. In most everything I’ve seen & done people quickly rule out dominated strategies & quickly converge on an equilibrium. Usually much faster than models predict
     
  13. PerSeGator

    PerSeGator GC Hall of Fame

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    Yeah, ever seen a casino? It's full of people playing suboptimal strategies with money on the line.

    NFL football coaches have teams of analysts telling them when it's optimal to go for it on 4th down, but they still ignore the numbers despite having millions at stake.

    Educated folks know that it's suboptimal to invest in individual stocks, yet they do.

    Frankly, I would be more surprised if you could run an empirical experiment where a statistically significant population of people even come close to the optimal strategy in just about any game.
     
  14. docspor

    docspor GC Hall of Fame

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    In most if not all of those situations, you are assuming risk neutrality & defining optimal as maximizing EV. Once those assumptions are relaxed, it is not sub-optimal. In fact, using real money, I can easily prove that you make sub-optimal decisions under those assumptions. Hell, I'll even give you the optimal course of action & you will reject it.
     
  15. l_boy

    l_boy VIP Member

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    In football the EV is maximizing wins. However the risk you allude to is looking bad or looking dumb. Better to lose a close game than increase your chance of winning but increase your chance of getting blown out.

    Same in hockey. After a team gets some number of goals ahead, the optimal strategy, probability wise for the trailing team would be to get rid of the goalie much earlier than they do. But you run the risk of getting blown out. So the risk you are alluding to is essentially negative style points.

    Picking individual stocks doesn't increase EV. It just increases risk and distribution of outcomes.

    As to gambling, pretty much all strategies have negative EV, but some strategies are worse than others. There are some bets in craps that are 50/50 zero EV, but other more exotic bets that have high upside but significantly greater negative EV.

    Unfortunately my wife likes to go to casino and play various electronic games, all of which have terrible odds and EVs. If I were going to gamble I'd do black jack or some video poker games, which can come close to breaking even if played right.
     
  16. docspor

    docspor GC Hall of Fame

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    good post

    Whoa. I don't know many people who know about the even bet in craps. I was at oh, one of the old school downtown casinos in vegas in around 2000 (hangin with an old UF roommate) & was surprised to learn that you could take the odds in the middle of a roll, so I did. Given the context I was being optimal enough....$1 craps at happy hour! I think it was the Sands. I hate vegas & have never been back.

    In the late 90s, I took 2 vans of college kids to vegas on a Uni sanctioned trip. OMG! It's a miracle we all got back. The 1st night there I went out & shot craps until morning, never went to my room, got a triple espresso & threw some H2O on my face in the lobby BR & met the kids to go on some little tour of something that justified the Uni paying our way.
     
  17. docspor

    docspor GC Hall of Fame

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    So many stud* poker players (Ivey, Coultier, etc) know the odds & yet lose shitloads at the craps tables. IMO, they are not being sub-optimal, they know the odds. they are action junkies.

    * edit, I mean stud as in elite
     
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  18. PerSeGator

    PerSeGator GC Hall of Fame

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    Shrug. There are countless reasons why people may choose a sub optimal strategy in just about any game. In your Rock Paper Scissors experiment, you’re talking about a novel variation of a game often played for fun. If people are willing to throw away money hitting on 17, you really think they wouldn’t pick the “fun” strategy in RPS?

    Just seems naive to predict that people would come close to the NE in your experiment. So I’m just surprised you were surprised.
     
  19. l_boy

    l_boy VIP Member

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    I haven’t played a lot of craps just read about how to play decades ago. Forgot most of it, but the first basic roll is like 48% probability and the follow up roll (pass line ??) is 50%. The problem I found with craps is it is so fast you can go through money pretty quick.

    blackjack is more fun, but always have to familiarize myself with the best plays. However the two times I won the most were one when I didn’t know how to play at all, and made stupid bets out of ignorance compounded by drunkenness. But still ended way up. The other time was in OK which has an ante for each hand. So luck and randomness play a far bigger role than probabilities in the short run.
     
  20. PerSeGator

    PerSeGator GC Hall of Fame

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    Playing the odds in craps is 50/50, but you have to play the pass/don’t pass (where the house has an edge) before you can play the odds, so you’ll always be behind. It’s similar to doubling down or splitting in BJ — bets that actually improve your odds, but you have to take a negative odds bet to get there.

    House always wins at the casino.
     
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