tag:blogger.com,1999:blog-12847869.post114855074957321757..comments2017-05-23T04:04:18.319-04:00Comments on 4201: Dumb Agent Theory4201Masshttp://www.blogger.com/profile/18101735501658121354noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-12847869.post-1161156885916465062006-10-18T03:34:00.000-04:002006-10-18T03:34:00.000-04:00let's say today you're going to sell something but...let's say today you're going to sell something but realistically only about 10 to 20 people have the resources to buy all of what you're selling (they have to buy all). at the time of the initial purchase, they have to deposit a downpayment with you. if everything goes smoothly, the downpayment goes toward the purchase price.<BR/><BR/>after they purchase it (win by having the highest bid), they have about 2 weeks to resell 10% of what they bought to the general public (they can do whatever they want w/ the other 90%). all of the people bidding have about equal access to buyers when resold.<BR/><BR/>the catch is that they have to say today at what prices they will resell in 2 weeks time. if they are unable to keep the promise of reselling the 10% at the prices they indicate today, that constitutes default and they lose their downpayment which they paid for the privilege of bidding.<BR/><BR/>so, my question is, how do we determine the appropriate amount to charge for the downpayment?Patio Farmerhttps://www.blogger.com/profile/03513402021646465860noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1151812398173117162006-07-01T23:53:00.000-04:002006-07-01T23:53:00.000-04:00I assume your thesis study how people made decisio...I assume your thesis study how people made decision (stock market, future market, fdi) under uncertainty. The rational way to predict your outcome is to use the expected utility and it is therefore based on the probability distribution on any outcome it could occur. <BR/><BR/>make any sense? or am i a fool againPhD Wannabehttps://www.blogger.com/profile/03550629581724724341noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1151811858711888292006-07-01T23:44:00.000-04:002006-07-01T23:44:00.000-04:00might be a useless comment for you might be done w...might be a useless comment for you might be done with your thesis by now..but anyway just want to say your examples are all random variables. Randomly occured with different levels of probability distribution. so maybe that's why any random kind of causes can predict any random effect. Example random seasonal rain could predict random stock prices given large enough samples.PhD Wannabehttps://www.blogger.com/profile/03550629581724724341noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1149275629396120432006-06-02T15:13:00.000-04:002006-06-02T15:13:00.000-04:00Ok, what happened with the Challenger disaster was...Ok, what happened with the Challenger disaster was that, even though after it occurred NASA’s expert committee needed months in order to find the cause of this event, the markets gave their verdict immediately. Morton Thiokol, manufacturer of the faulty O-Rings, quickly received a 12% loss in share price, while the other shuttle contractors remained relatively free of market punishment. <BR/><BR/>That's it in a nutshell. You can find more info here: http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFK-47X0WGT-1&_user=10&_coverDate=09/30/2003&_rdoc=5&_fmt=summary&_orig=browse&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=347571f426f1b11349b702af46087a984201Masshttps://www.blogger.com/profile/18101735501658121354noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1149275138394703172006-06-02T15:05:00.000-04:002006-06-02T15:05:00.000-04:00Kim-ba: I think the whole discrepancy between util...Kim-ba: I think the whole discrepancy between utility and value could be a problem with this analysis. But, on the other hand, if I have a t-shirt, and let's assume no one else has any utility from it (no one sees it, misses it, took time to make it, loses anything or gains anything from it existing or not), and if I say it has a utility of $5, then its value is $5. I am the only possible market for it, so my perceived utility is its value. SO technically its value will, by definition, be its utility. <BR/><BR/>In terms of time, the Efficient Market Hypothesis (off of which the Dumb agent theory sprung about), says that any future value of anything is already incorporated into its value. This can change, obviously. But it will change as soon as new information comes about. For example the Roman empire might have had a perceived future value of a trillion in the year 200AD, but this value will have changed as the Northerners started invading, the Christians started gaining more power, and the Romans started partying too hard. Technically people who had grown up in the Roman empire for many generations might not think it would ever collapse, but if they had a futures market, its collapse would probably have been more and more foreseeable as these events occurred. So yeah, the Dumb agent theory cannot always predict the future, but it can show the real-time value of something before it is public knowledge using all the information at hand. And it will do this better than any individual person. There's an example of the Challenger disaster but that takes up space so I might write about it in another comment.4201Masshttps://www.blogger.com/profile/18101735501658121354noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1149274387507523152006-06-02T14:53:00.000-04:002006-06-02T14:53:00.000-04:00Danny: It isn't. At all. Except for the fact that ...Danny: It isn't. At all. Except for the fact that it would be very useful if people were able to predict when and where it occurred and with what intensity. If these markets can be used to predict when and where Influenza will occur, and with what intensity, then there's no reason why we cannot do the same with levels of FDI into different countries. The fact that FDI is one of the best ways to measure the health of a country's economy is an entire separate point to itself, which I obviously also talk about in my thesis.4201Masshttps://www.blogger.com/profile/18101735501658121354noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1148619823204652612006-05-26T01:03:00.000-04:002006-05-26T01:03:00.000-04:00how is influenza related to FDI?how is influenza related to FDI?dkambehttps://www.blogger.com/profile/13858196733976996648noreply@blogger.comtag:blogger.com,1999:blog-12847869.post-1148611544785517622006-05-25T22:45:00.000-04:002006-05-25T22:45:00.000-04:00I don't know if this helps, but skim through books...I don't know if this helps, but skim through books by : <BR/><BR/>Bernard Salanie <BR/><BR/>and Jean-Jacques, Laffont <BR/><BR/>or stop by salanie office if you at columbia. think his office in sipaPhD Wannabehttps://www.blogger.com/profile/03550629581724724341noreply@blogger.com