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Game theory |
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Game TheoryGame Theory is a theory of rational behavior of participants in interactive decision-making scenarios. It helps predict how other participants of the situation / scenario (game) will respond in certain situations, or to certain decisions. Understanding participants' responses ahead of a decision, should help the initial decision maker make better decisions. It is applicable in areas such as:open sourcedevelopment. Freerider issues forexample. Should you contribute resources when somone else may benefitwithout contribution?standardssetting. Should you cooperate with your competitors to help expand andstandardize the marketplace?dynamicpricing. Should you bid at a price point, and will that create a higherbid from someone else?competitor reactions to decisions. When making marketing decisions, youcannot only analyze how your customers may respond without considering howyour competitors will respond, as this will in turn impact your customers.A popular game theory model, for a non-zero sum situation, is the prisoners dilemma.Game theoryThe modeling of strategic interactions among agents, used in economic models where the numbers of interacting agents (firms, governments, etc.) is small enough that each has a perceptible influence on the others.Similar MatchesTheory of second bestTheory of second bestSee second best. Expectations theory of forward exchange ratesExpectations theory of forward exchange ratesA theory of foreign exchange rates that states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate. Preferred habitat theoryPreferred habitat theoryA biased expectations theory that believes the term structure reflects the expectation of the future path of interest rates as well as risk premium. The theory rejects the assertion that the risk premium must rise uniformly with maturity, but instead profits that to the extent that the demand for and supply of funds do not match for a given maturity range, some participants will shift to maturities showing the opposite imbalances, as long as they are compensated by an appropriate risk premium whose magnitude will reflect the extent of aversion to either price or reinvestment risk. Trade theoryTrade theoryThe body of economic thought that seeks to explain why and how countries engage in international trade and the welfare implication of that trade, encompassing especially the Ricardian Model, the Heckscher-Ohlin Model, and the New Trade Theory. Complexity TheoryComplexity TheoryThe theory that processes with a large number of seemingly independent agents can spontaneously organize themselves into a coherent system. Further SuggestionsBubble theoryLabor theory of value Local expectations theory capital market theory Dow dividend theory Dow theory Odd lot theory Product cycle theory Normal backwardation theory Bicycle Theory Purchasing power parity theory Portfolio theory Greater fool theory New Trade Theory Modern portfolio theory Agency theory Efficient markets theory(EMT) Presidential election cycle theory Elliott Wave Theory Dow Theory Cushion theory Short interest theory efficient market theory Conduit theory Dependency Theory |
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