A puzzle in game theory

NFL legend Jerry Rice is getting involved in a strange conspiracy theory.

Via Simon Black of SovereignMan blog, In Game Theory, there's a famous hypothetical scenario called the Prisoner's Dilemma in which two criminal suspects are apprehended by police and given a choice: stay silent, or rat out the other guy. But there is a catch.

The best book to read on that topic is Robert Leonard's new and noteworthy Von Neumann, Morgenstern, and the Creation of Game Theory.  Excerpt:

Again and again while trying to understand the fiscal machinations of Congress, I find myself referring to a simple analytical approach acquired at university: game theory. The construct, popular among economists, sheds light both on what has happened in Washington and on how the bargaining power of its negotiating parties may evolve over time.

Republican House Speaker John Boehner’s has offered president Obama a proposal to generate $800 billion in new revenue. Obama rejected Boehner’s proposal in one hour flat because it does not go far enough in raising taxes on the wealthy. Indeed, all Boehner proposed was closing loopholes. Yet, closing loopholes to raise $800 billion over ten years is too much for Tea-Party activists such as Senator Jim DeMint, co-founder of the Senate Tea Party caucus.

Is There A (Game Theory) Game Which Captures The Core Dilemma Of An Economic Bubble? This question was originally answered by Jinghao Yan on Quora.

Find below some interesting thoughts on financial markets and the efficient market theory. That theory essentially says the market prices are right given the available information. I think markets are somewhat efficient but there are plenty of opportunities to profit from inefficiencies in the market. Still it is not easy to consistently exploit these inefficiencies profitably. Capital Market Theory after the Efficient Market Hypothesis

The lovely wife says the jewelry I bought her for Christmas has to be returned because "it's just too expensive!"  Excellent.  I get the credit without the credit bill!What I will never reveal is how far I looked down the game tree before purchase.Addendum: Do not try this at home.  Without extensive knowledge of game theory and your spouse this strategy can be very dangerous to your finances, c.f. Thomas Schelling, brinksmanship.