Figure 11-1 speculative storage can improve efficiency P2 P P2 S S2 S2 (a)without carryover (b)with carryover 1 2023/7/16 Economics
1 2023/7/16 Economics Figure 11-1 speculative storage can improve efficiency (a)without carryover (b)with carryover O Q O O O 1 Q2 Q1 Q2 P1 P2 P1 P2 S1 S2 S2 S1 A
Risk and Uncertainty A person is risk-averse(风险规避者)when the displeasure from losing a given amount of income is greater than the pleasure from gaining the same amount of income. ■ A person is risk--lover(风险爱好者)when the displeasure from losing a given amount of income is less than the pleasure from gaining the same amount of income. ■ Bet and A fair bet (expected value=0) Gambling(赌博)？ ■ Insurance and risk spreading Capital market and risk sharing 2 2023/7/16 Economics
2 2023/7/16 Economics Risk and Uncertainty ◼ A person is risk-averse(风险规避者) when the displeasure from losing a given amount of income is greater than the pleasure from gaining the same amount of income. ◼ A person is risk-lover(风险爱好者) when the displeasure from losing a given amount of income is less than the pleasure from gaining the same amount of income. ◼ Bet and A fair bet (expected value=0) ◼ Gambling(赌博)？ ◼ Insurance and risk spreading ◼ Capital market and risk sharing
Figure11-2风险者类型 U(W) U3(W)风险喜好者 U2(W)风险中立者 U(200) U1(W)风险回避者 U1(100) U1(100)=E(U) U3(100) 100 200 W 3 2023/7/16 Economics
3 2023/7/16 Economics Figure 11-2 风险者类型 o W U(W) 100 200 U1(W)风险回避者 U2(W)风险中立者 U3(W)风险喜好者 U1 (100) U(200) U1 (100) =E(U) U3 (100)
Insurance Market failure: Asymmetry of Information ■Adverse selection ■Moral hazard Social insurance is mandatory insurance provided by the government. 4 2023/7/16 Economics
4 2023/7/16 Economics Insurance Market failure: Asymmetry of Information ◼ Adverse selection ◼ Moral hazard ◼ Social insurance is mandatory insurance provided by the government
Basic concepts(P213-215) Game theory analyzes the way that two or more players choose strategies that jointly affect each other. ■ A payoff table(支付矩阵)is a means of showing the strategies and payoffs of a game between two players. ■ Dominant strategy(占优战略)：when one player has a single best strategy no matter what strategy the other player follows. Dominant equilibrium(占优均衡)means the outcome which both (or all)players have a dominant strategy ■ Nash equilibrium(纳什均衡)is also called noncooperative equilibrium(非合作均衡)，It is one in which no player can improve his or her payoff given the other player's strategy. cooperative equilibrium(合作均衡) 5 2023/7/16 Economics
5 2023/7/16 Economics Basic concepts(P213-215) ◼ Game theory analyzes the way that two or more players choose strategies that jointly affect each other. ◼ A payoff table(支付矩阵) is a means of showing the strategies and payoffs of a game between two players. ◼ Dominant strategy(占优战略):when one player has a single best strategy no matter what strategy the other player follows. ◼ Dominant equilibrium(占优均衡) means the outcome which both (or all) players have a dominant strategy. ◼ Nash equilibrium(纳什均衡) is also called noncooperative equilibrium(非合作均衡),It is one in which no player can improve his or her payoff given the other player’s strategy. ◼ cooperative equilibrium (合作均衡)
Figure 11-3 Dominant equilibrium Normal price Price war Normal A* $10 B -$100 price X $10 -$10 Price -$10 D -$50 war -$100 -$50 6 2023/7/16 Economics
6 2023/7/16 Economics Figure 11-3 Dominant equilibrium Y X Normal price Price war Normal price Price war A* $10 $10 B -$100 -$10 C -$10 -$100 D -$50 -$50
Figure 11-4 Nash equilibrium Low price Normal price Low A $200 B $150 price $100 -$20 X Normal C -$30 D* $10 price $150 $10 7 2023/7/16 Economics
7 2023/7/16 Economics Figure 11-4 Nash equilibrium Y X Low price Normal price Normal price Low price D* $10 $10 B $150 -$20 C -$30 $150 A $200 $100
Figure 11-5 The Prisoner's Dilemma confess no confess confess A* 5years B 10years 5years 3months 甲 No C 3months 1year confess 10years 1year 8 2023/7/16 Economics
8 2023/7/16 Economics Figure 11-5 The Prisoner’s Dilemma 乙 甲 confess no confess No confess confess D 1year 1year B 10years 3months C 3months 10years A* 5years 5years