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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (42697)	12/8/2003 2:08:24 AM
From: macavity	Read Replies (1) \| Respond to of 74559

Unintended consequences? Game Theory. The shared restaurant bill. 10 of you go to a restaurant. 1) You decide to pay for your own bill. (Decision Theory) 2) You decide to split/share the bill. (Game Theory) Why is it that the Bill is always more in Case 2? In order to achieve an objective - feed ourselves - it is better (cheaper) if we suffer the consequences of our own decisions individually than if they are shared. It is basically due to the fact that our (lifestyle) choices - caviar, foie gras - increase when we split the cost of them. This can be explained mathematically if (economic) utility is assumed as a non-linear (power) function, as we make our decisions on the shared cost-difference not the total cost-difference between choices. We feel we are getting more Bling for our Bucks! This is social democracy at its finest: "More Welfare" "More Education" "More Health" "More Sushi" Politicians - Why they are the restaurant owners, of course! -macavity