Game Theory 101 (#76): Adverse Selection

[@Gametheory101]

Would you believe I waited six months to post this for Janet Yellen to leave office at so that the video would not become outdated?

[@Dat_Dude_Danny1]

William Spaniel Hey, William. I hope all is well, man . I was thrilled when I saw the KZbin reminder on my phone. Please keep them coming!

[@Gametheory101]

It is, thanks. Just been prioritizing getting tenure!

[@TheQuixef]

Wouldn't Player 2's payoffs in case of not purchasing the insurance include the fact that they would now have to cover their healthcare costs themselves? i.e. instead of 0/0 0/-400 or 0/-800 where appropriate.

[@rhedhaering]

Surprise! It's out of date again! Lol. You are forgiven.

[@PunmasterSTP]

Adverse? More like "adding knowledge first", because your videos are entertaining, but first they are educational!

[@t.s.jayalakshmi993]

Dear Mr. Spaniel, Thank you very much for these video. I am a student of Msc. Quantitative Finance, London. You are doing a great service to the student community and I am very grateful. I would like to know when you will be posting the next video, for i depend on your videos for a decent grade. Thank you and God bless. Mrs. Jayalakshmi.

[@PunmasterSTP]

How have your studies been going/how did they go?

[@orktv4673]

It's an interesting definition of "free market" that you're using, as it doesn't take into account the fact that insurance companies can change their offers and that competition will select for the the best deals. I'm not saying it's the wrong way of looking at it, I just have never seen it before.

[@rhedhaering]

This reminds me of the old Groucho Marx joke - "I wouldn't want to belong to any club that would have me as a member."

[@nathanbarnard7896]

Their son is a proffessor at my university

[@amnaadnan5321]

When will you upload the next series of lectures for signaling games?

[@notcherm]

I have a final in like 12 hours that includes signaling so uhh can you upload that video lolol pls I need dis

[@Xez1919]

Collin H yes please!

[@Xez1919]

Collin H did you find any good videos on signaling?

[@PunmasterSTP]

How did your final go?

[@OnlyMeAlong]

Dear teacher, I am confused with a statement in my notes of my professor, that is "strictly dominated strategies can never be part of a Nash equilibrium". Would you mind to explain?

[@dad912]

a game in one step don't representative Nash equilibrium. The example is part of a mathematical abstract, and in self is true but not in the repetitive adverse selection is that we see in our life.

[@PunmasterSTP]

I think the main idea is that if you are playing a strategy that is strictly dominated by another strategy, then switching to that other strategy will result in a profitable deviation. Hence, the strategy you were playing before couldn't have been part of a Nash equilibrium.

[@ivantrestcov7371]

Thanks for videos! When is it gonna be signaling?

[@sinecurve9999]

You're back! Let the excitement continue!

[@Gametheory101]

And it will! ...in August 2018.

[@PunmasterSTP]

@@Gametheory101 It's October 2021 and the excitement is indeed proceeding!

[@wiktoriaczarnecka8429]

Hello, Why do the customers pay the high or low price and not the WTP price (willingness to pay)? Why would not we do 0.6(750)+0.4(1250)=450+500=950 and this is not the price that we would consider? Regards

[@adrianjensen1350]

Hey will! Im not sure why you have the inequality in there when you do your "Arithmetic". I would love to understand why its there and why you formulate the equation like this. Thanks for the vids and keep it up!

[@orktv4673]

The insurance company can either offer the high or the low price. Both options have an expected payout. The company of course wants to make the most money possible, so it should elect to offer the high price only if its expected value is higher than that of the low price. In the slide we see the equation E(high price) > E(low price) and we check that it is true by working out the math.

[@ashr2794]

You are a great teacher! Thank you!

[@emilmirzayev7]

Make more videos, I missed your videos :)

[@User-uj7nz]

A.I. products, Elon Musk products, etc.

[@zes3813]

no such thing as interesx or not about it, cepit, any be infix any interestingx

[@PunmasterSTP]

Sorry I'm not quite sure I understand. What were you trying to say?