🚀 go-pugleaf

As presented here (a copy of the original post follows), this model
means that the kind of competition implied ny jealous games is a
condition for underdevelopment, even if such behaviour is not evidenced
by a current economy. That is, following this kind of behaviour for
actual business opportunities would make a normal, working economy fall
in a path that will lead to underdevelopment, in the sense that putput
would become lower than maximum (for a sensible definition of maximum),
that would be the case if business opportunities, particularly for new
investment, follow a competitively independent decision making
schedule. As long as both businessmen follow their own benefit to be
positive, independently of the possible comparative benefits of the
partner, the economy as a whole will achieve normal output, ceteris
paribus. But the moment decisions are based on the expected utility of
both businessmen and jealousy takes place as a determinant, missed
opportunities, either for both or for one party will certainly lead to
underdevelopment. So it folows that even developed economies have to
follow independency in business decisions for all actors rather than
follow socially or culturally determined prejudices that lead to
missing business opportunities based on the will to sustain those
prejudices or other socially accepted patterns of jealousy and
discrimination...

This is an equivalent way to say that projects have to be evaluated on
their own, indeendently of other determinants or the actors
implementing them.

A game theory model can be tested computationally by simulating lots of
two person games where envious, neutral and cooperative solutions occur
in a fixed proportion (or a variable proportion based on previous
values, total values, etc). It can be controlled with the same pay
matrixes simulated for pure strategies, envious, neutral and jealous,
and the values compared. There are several variations that can be tried
on the same basic idea.

QED.
Quod erat demostrandum.

For instance: games may be added to the simulation according to global
gains (sum off all game results, GNP); neutral or cooperative
strategies may be used for small gains (both gain), but envious
strategies when gains are too big or disproportionate. Of course, a
"national strategy" would be the probability distribution of individual
strategies of players. And this model can be "filled" by actual figures
(kind of econometrics), for instance, by making interviews or
monitoring current behaviours...


If you realized the exercize, you may notice that a strategy where one
loses in order to make another win, (abnegation) also leads to
underdevelopment! The optimum solution is the invisible hand, pursuit
of self-interest to maximize your own gains. But it must not be
confused with doing charity; there is no bussines opportunity there, in
fact it can be seen as the market of good feelings, where one buys the
feeling of being good.


And incidentally this exercize shold show that it is not necessary to
practice arcane mathematics to make economics. Computing can be used
also and pure thought experiments are effective too.


A way to make this dynamic is to create games dynamically according to
the previous performance of the economy (aggregate production, the sum
total of the payments of all games). Games would be created accroding
to past performance: the more Q the more games created in the next
iteratio. This model can be made asynchronous also, with a probability
distribution in time to the creatio of new games, where the parameters
of the distribution (a poisson? then delta) depend on the level
ofproduction at any moment.


Notice that the payment matrixes should reflect the fact that envious
strategies mean a net loss for both palyers. In essence there should be
no zeroes in the matrix, as the losing payment (enviously reached)
should reflect the cost of playing the game. Of course, there must be
an independent coefficient for the creation of games, independently of
the level of production attained in the previous iteration. This means
that even in an underdeveloped or recessive economy there is always an
opportunity to make business. What`s the dynamic path of this model?


Danilo J. Bonsignore
previously known as Fabrizio J. Bonsignore
visit http://ghamac.org
http://www.geocities.com/syntotic
http://ghamac.org/documenti/rondop.mi­d
http://ghamac.org/miniface.jpg
http://ghamac.org/guitar/isabelsdeath­.mp3
http://ghamac.org/bachiana.mid