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IRAN: Ebrahim/Simon

Wednesday, July 05, 2006

Economist Role!!!

What an excitement game you are playing!

As you know not only philosopher but also economists can do nothing special in this case unless they have access to some asymmetric information about the rival's reservation price, and this information is useful only if there is not considerable delay to write a post!!! … sorry

What economists do in such a complicated case is observing the game and analyzing the results; but after being known of the result!!!

To be more serious, I want to talk about the structure of this game or the role of the agent in that. The agent can design the game in variety of methods. As a case in point, he can set a multi-period auction; each buyer offers his bid price and the other buyers can offer a higher price. The game goes on by the time that nobody offers a higher price. In this method each buyer has more information about other buyer's decisions during the game. In other word, he knows the rivals' willingness to pay in each stage. Therefore he can decide on whether he offers a higher bid or not based on real information.

In the game you are playing, the agent has restricted the game to one period. Besides, you do not have any information about your rival's preferences. What is the result of this game? I think in this case the transaction will take place in a price higher than the last case. In other words, to won the game each family may offer a price more than his willingness to pay.

The method that the agent selects will influence on the games benefits. A specific method may have considerable benefits for the seller while another method may satisfy the buyer. The contract between the agent and the other players also may affect the agent's strategy (even in favor of one side).

It seems necessary that some kinds of regulation be imposed based on which the agent acts fairly. Economists may have a role in designing such regulations.

posted by ebraz @ 7:10 pm   

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