Monday, March 24, 2008

1.) It's four in the morning and who cares about the Prisoner's Dilemma?

Advertising is sometimes cited as a real life example of the prisoner’s dilemma. When cigarette advertising was legal in the United States, competing cigarette manufacturers had to decide how much money to spend on advertising. The effectiveness of Firm A’s advertising was partially determined by the advertising conducted by Firm B. Likewise, the profit derived from advertising for Firm B is affected by the advertising conducted by Firm A. If both Firm A and Firm B chose to advertise during a given period the advertising cancels out, receipts remain constant, and expenses increase due to the cost of advertising. Both firms would benefit from a reduction in advertising. However, should Firm B choose not to advertise, Firm A could benefit greatly by advertising. Nevertheless, the optimal amount of advertising by one firm depends on how much advertising the other undertakes. As the best strategy is dependent on what the other firm chooses there is no dominant strategy and this is not a prisoner's dilemma but rather is an example of a stag hunt. The outcome is similar, though, in that both firms would be better off were they to advertise less than in the equilibrium. Sometimes cooperative behaviors do emerge in business situations. For instance, cigarette manufacturers endorsed the creation of laws banning cigarette advertising, understanding that this would reduce costs and increase profits across the industry. This analysis is likely to be pertinent in many other business situations involving advertising.

This is an example of game theory, of which you may have gotten a taste from the movie A Beautiful Mind about John Nash. (You can look up stag theory if you want.) I mainly took this for the cigarette company and how they endorsed the creation of laws banning their advertising.

from http://en.wikipedia.org/wiki/Prisoner%27s_dilemma#Real-life_examples

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2.) Wow.

http://en.wikipedia.org/wiki/List_of_years_in_literature

(To be cheeky: it's too bad 2008 has Stephen King's book as a notable work and 1952, for example, had Waiting for Godot by Samuel Beckett, Charlotte's Web by E. B. White, and The Old Man and the Sea by Ernest Hemingway.)

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3.) I've just learned that in 2006 Ridley Scott did a movie of Tristan and Iseult, and I would like to see it.




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