Tag: Game Theory
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Müllerian Mimicry
In Müllerian mimicry, various harmful or unpalatable species come to resemble each other, amplifying mutual protection against predators. This adaptation arises from evolutionary pressures and has substantial impact on ecosystems and species interactions.
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Zugzwang
In chess, Zugzwang captures the paradox where moving worsens a player’s position, but inaction isn’t an option. This strategic conundrum, rooted in German terminology, also metaphorically frames challenging decisions in broader contexts, including business and international relations.
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Common Knowledge
Common knowledge is information presumed known within a specific group, aiding in effective communication and social cohesion. It varies by cultural, professional, and universal contexts, and is influenced by education, media, and social networks.
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Sensitivity Analysis
Sensitivity Analysis quantifies the impact of variable changes on a specific outcome within a model. Employed across various disciplines, it aids in risk assessment, model validation, and decision-making, offering metrics to represent sensitivity.
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Being Too Early is Indistinguishable from Being Wrong
An idea introduced too soon confronts economic, psychological, and societal hurdles that often render it indistinguishable from an incorrect or unviable concept, irrespective of its inherent merits.
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Negative Externalities
Economic activities can impose unaccounted-for costs on society, known as negative externalities. These inefficiencies often lead to government interventions and have widespread implications, affecting issues as significant as climate change and public health.
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Schelling Point
In game theory, a Schelling point describes an intuitive focal solution people gravitate towards without direct communication. Named after its progenitor, economist Thomas Schelling, its reach extends to realms like negotiations, economics, and international affairs, driven by common societal frameworks and references.
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Expected Value
Expected value, a cornerstone of statistics and probability, indicates the average outcome of repeated events. Despite its ubiquity in fields such as economics and decision-making, it doesn’t predict individual outcomes and can be skewed by outliers. Its broad applications necessitate considering ethical implications due to potential unequal impacts.
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Adverse Selection
Adverse selection happens when one party in a deal knows more than the other, leading to unfair outcomes. This can be a big issue in areas like insurance, loans, and used car sales. While there are strategies to manage it, unchecked adverse selection can cause market problems and privacy concerns.