Complain before you get the grade?

I recently completed a class.  Well, I say recently, it was early August.  I still don't have the grade for the class.  Neither do my classmates.  There is alot of grumbling about this situation among the class.  So where is the game theory in this?

Well, the game theory is this.  Our choices are to complain, or not to complain directly to the professor.  If we complain, we can have a result of a negative impact on the grade or no impact on our grade.  If we don't complain, then presumably there is no impact on the grade (at least from the complaining).

If we trust that the professor will honor the complaint as that of concerned students and that we trust there is no impact on the grade, then we would have that conversation.  If there is even the most remote chance of a negative impact on the grade, we shouldn't complain.

There is only 1 negative outcome, and it occurs as the result of only 1 action.  So, we avoide that action.  All this presumes that there is no other price paid.

We should perhaps question if we are letting our principles take a back seat to a perceived threat to our grades.  If we are, then we are paying some price for remaining quiet.

Now, to set the record straight.  I have no reason to believe that the professor would negatively impact a student's grade for approaching them.  This person seems by both reputation and by personal experience to have the highest of integrity.  It is still interesting to see.  The question really seems to be, what level of cost, however tabulated, will cause a student to approach the professor.

Can you tell your Preacher to hush?

http://www.huffingtonpost.com/2008/04/29/obamas-reverend-wright-pr_n_99215.html

So how many ministers of major political figures do we really know? Not many. A bit of interest background on ministers. They typically work in not for profit organizations. These organizations rely on contributions. And, these contributions are an outcome of people knowing about the organization.

Which leads us to the opportunity afforded to Reverand Wright. Reverand Wright has no reason to be quiet. In fact, he has every reason to remain in the press as long as he can, as long as Obama is in the Presidential race certainly.

If Wright were to go away quietly, he may be helping a former member of his congregation, but he would not be working in his own best interests. He would not be "maximizing" income.

So, Obama wants him to hush, and pretty much said that this week in his comments separating himself from Wright. However, that means that Wright most likely has to work even harder to stay public, again maximizing his income.

It would seem, that the best outcome strategy for Obama might actually have been to quietly go to Wright and give him a post in his campaign if he kept quiet. His best strategy may have actually been to get closer to someone that he really wants to be far from.

New Entrant to the Space

41 of the 50 states plus D.C. outsource the administration of the Medicaid program. This means that they hire a company to act as the system provider, the provider (doctors, dentists, pharmacists, hospitals) relations support, key claims, and perform other functions.

Of the 41 states that outsource, 18 are served by our main competitor, EDS. We (ACS) serve 16 states. The remaining 7 are split among 5 other companies.

EDS and ACS enjoy a very strong position in the market. And, we are very competitive with each other. Up until 10 years ago, our solutions were virtually interchangeable. It was not uncommon for us to take over one of their systems or they take over one of ours. Key staff in each organization, including me, have worked for both companies. There are very few secrets between the two firms.

About 10 years ago, we started to diverge some. EDS' strategy steered toward technical leadership and they became very contract focused. Meaning they established quite sophisticated approaches to manage their accounts very carefully by the contract. EDS also focused on doing the specific functions of the contract well. So, they started to occupy a certain space.

During that time, we focused more on value added functions. We added new clinical management tools, fraud detection tools, and pharmacy management systems. Our space was to put in less attractive technical solutions, but to add value through these other capabilities.

This went well for several years. And, we saw a very clear spacial model between the two types of offerings and the two types of customers.

Five years ago, a new entrant came in offering a technically advanced solution. It was a solution fully based on web technology, it showed extremely well, it had all of the right buzzwords, and it shook up the industry. This small company, that had never implemented a single system in our market, was able to convince the whole market that this new technology was required. This company won 3 states over those 5 years. They also convinced other states to change the requirements in their RFP's to include their type of technology. EDS and ACS had to react. We started developing new systems. Bid prices for states have risen from $20M to $40M. It was almost as if someone dropped a hammer in the middle of the spacial pricing model.

The result is this:
- That little company has been kicked out of 1 state that they won. They are 2 1/2 years late in another. They have yet to successfully implement this new technology.
- ACS and EDS are now offering better solutions. We still occupy our respective spaces, but our solutions are better.

This past 5 years has been quite disruptive. And the lesson is that even when companies occupy their space, that space needs to be maintained and protected, because the equilibrium of that space can be impacted by other vendors, even medicine men.

Healthcare and the Paretto Frontier

A classmate in Econ made a statement about Paretto efficiency when referring to our healthcare system. And, seeing that I pretty much got dusted in one of our negotiation exercises, but was still Paretto efficient, I think his statement ran very true.

If we consider the players in our healthcare system as the Providers, the Patients, and the Payers, we have a negotiation where each party is trying to achieve some benefit.

The Providers want to maximize profits. They want to be paid the most they can for the services they render.

The Patients want qualified service and to pay as little as possible.

The Payers want to maximize profits by paying as little as possible for those qualified services.

Here is where the rub is. In our system, the Patient and the Payer are different. So, the consumer of services is not the person applying price pressure on the market.

This means that the negotiation is between the Provider and the Payer (Insurance company). The consumer, the Patient, may use services beyond their normal ability to pay because they aren't paying. This leads to esalating costs for the Payer.

If the Patient had more of a financial responsibility for services, were are able to connect the consumer and the payer, then the pressure would narrow the ZOPA for services, and would shrink the efficient outcomes.

PacMan Jones Negotiation

http://sports.espn.go.com/espn/wire?section=nfl&id=3369580

Adam "Pacman" Jones is an NFL cornerback that has been in alot of trouble. Until recently, he was the property of the Tennessee Titans. He was also suspended from playing in the NFL due to his legal issues.

Recently, the Dallas Cowboys traded for Jones. This is an unprecedented move in that no player, under suspension, has been traded in the NFL.

The Cowboys obviously wanted Jones. But at what price? Jones may not be cleared to play by the NFL. Jones may jump back into his bad behavior. Many things can kill this investment by the Cowboys.

There are several key ingredients to this pie.
- Dallas gave up a 4th round draft pick in this year's NFL draft and a 6th round next year; not much of a price for a player that they are going this far to obtain.
- If Jones doesn't get cleared to play in this upcoming season, the Cowboys will get a 2009 4th round pick, or if Jones is reinstated but gets into trouble again, the Cowboys will get a 5th round pick.
- The Titans in this deal are getting advanced use of the 4th round pick. And they are getting something for nothing. They had pretty much written Jones off.

According to the Cowboys, Jones "fills a need and he could be had for less than his talent is worth." So, the Cowboys see this as a relatively low-cost investmetn with a considerable upside.

This is a negotiation game that has many more parts that are included here. There is Jone's contract in which he had to make many concessions, including returning parts of a bonus, and contributing money to youth organizations. The players union, is watching for precedence here. If a player in a weak position can be muscled into making these concessions, does this open the door for better bargaining by owners in the future?

It will be interesting to see if Jerry Jones gets an ROI on Pacman Jones.

A sad negotiation game

This morning as my wife and I were leaving for church, there was an altercation in the street outside of our house. A woman was walking down the side of the street and was being harassed by a woman driving a car. I pulled along the lady that was walking and asked if she needed help. She said no. But it was clear she was afraid. So, I stayed and watched. At least to deter any physical encounters between the two. The lady in the car, kept harassing the other lady, and she finally came over to me and asked for help. During this time, the lady in the car was saying unfriendly things to me and making unfriendly gestures. I called the police. They came and difused the situation.

While the police were there, the aggressor lady yelled at the other lady and asked, "do you want to work this out or do you want this?" indicating the police. At that point, it dawned on me, this has the elements of a negotiation game.

This started as a 2-party negotiation between "A" the lady walking and "E" the agressor in the car. As long as this was a 2-party negotiation, A was at a disadvantage and would continue to be harassed by E. Once my wife and I entered, the negotiation changed, mainly because E lost credibility in some of her threats, such as violence. A also now had a potential strategy of leaving the negotiation. As it happened, E took A's phone, so she had no way to communicate to friends or family. Once the police came, the negotiation changed again, and E had no power. A was then free to leave the negotiation.

When E asked if A wanted to work this out, she was actually trying to return the negotiation back to a 2-party effort, where she clearly had the upper hand.

My wife and I gave A a ride to her mothers. I don't know if she will choose to remain away from the negotiation or not, it is her choice. That being said, I saw game theory where I didn't expect it, in a hostile, domestic dispute.

Are the players really rational?

We could argue whether or not this is a game. It could be a series of lousy decisions. However, given that there are 2 players (Raelynn Campbell and Best Buy), there is an interaction (several in fact), and each has an objective (RC to buy a pc and get it serviced, Best Buy to make a profit), and both are aware that they are interacting, I think this does qualify as a game.

See the link to the article about Raelyn Campbell's $54M lawsuit because Best Buys lost her laptop when she took it in for repair under one of those all so valuable extended warranties.

http://tech.yahoo.com/blogs/null/72016

The table above depicts a series of decisions within this game. The initial decisions were calculated decisions by Best Buys to offer an extended warranty to a customer and that customer purchasing that warranty. Then, the unexpected factor of the PC breaking happened, followed by the unexpected factor of player incompetence when BB lost the laptop. Then the strategies kick back in. Best Buy offering a low dollar amount, RC countering, Best Buy saying bug off, and RC countering with the lawsuit.

So, this calls into question when can we assume the participants are rational or not. Or, rational may be defined differently depending on the participant. And, when a small, helpless customer is facing a huge, mean corporate giant, David/Giant emotion comes into play. Perhaps this emotion is a factor in the payout that the players need to consider.

Intriguing at-bat

The story attached is an interesting game scenerio.


http://sports.espn.go.com/mlb/news/story?id=3243227


This is the story of Anthony Gwynn Jr. who plays for the Milwaukie Brewers. He is the son of Tony Gwynn, the hall-of-fame player from the San Diego Padres. Anthony grew up around the Padres. And, he became very close to Trevor Hoffman, a pitcher for San Diego. As fate would have it, Little T faced Trevor Hoffman with 2 outs in the bottom of the 9th inning, in a game that San Diego needed to win to make the playoffs.


I think the game player here, was not Gwynn or Hoffman, but the manager of the Brewers, Ned Yost. If considering mixed strategies, and how players need to "randomly" mix up their strengths and weaknesses to keep the other player off balance, Yost played a trump card. Gwynn grew up knowing Hoffman. As the story states, Gwynn learned how Hoffman set up hitters. So, by putting Gwynn into the game at this crucial point, Yost was jumbling up the known statistics with some intangibles. First the familiarity that Gwynn had with Hoffman. Second, the emotion of protege/mentor facing off.

It is also a pretty neat storry.

1 against the crowd

On April 16, 2007 a shooter killed 33 people on Virginia Tech's campus. One of the stories out of this was that the gunman lined up a group of students and shot them in order. A question asked in the ensuing discussion was why didn't they just attack him? This crowd could have certainly overpowered him, why didn't they?

In the story on this link (http://www.nytimes.com/2008/02/15/us/politics/15clinton.html?bl&ex=1203397200&en=0ff8f82bca320f8f&ei=5087%0A), Representative Lewis is changing his support from Clinton to Obama. Lewis had been a strong supporter and long-time friend of Clinton, but is now changing his support.

What do these two stories have in common?

In a game of a crowd against 1 powerful person (powerful politician or a man with a gun), the early movers face a greater risk than the crowd in total. In the case of charging a gunman, the "hero" or first mover, may pay with his/her life, but the crowd will certainly benefit. This may explain why people don't charge the gunman. It may also explain why the crowd charged the cockpit on United flight 93 on September 11. They likely realized that their likelihood of survival was very low, making it "easier" to make the choice to charge the terrorists.

In the case of Rep. Lewis. By making this move, which goes against an endorsement of Clinton just a few months ago, and pits him against a powerful politician, it will cost him dearly if Clinton should rebound and get the nomination.

In a "1 against the crowd" game, the early mover payout is lower than the 2nd mover, 3rd mover, etc. This may explain a hesitance to act.

What is a game?

A game is an interaction between 2 or more parties, each with a set of desired outcomes and strategies, and each aware of their participation in the game.

There are obvious examples of games....for example...games. In singles tennis, there are 2 participants, each with a desired outcome (to win enough points, to win games, to win sets, to win the match), and they are both aware of the outcome. http://sports.espn.go.com/sports/tennis/news/story?id=3250650

Politics has also been described as a game. This year, in the race for the Democratic nomination for president, there are 2 remaining participants (Obama/Clinton), they both have the desired outcome of winning the nomination, and, they are both aware that they are participating. And, each is using strategies to achieve this outcome, such as with Obama's visit to North Carolina to meet with John Edwards to try to get his support. http://news.yahoo.com/s/ap/20080217/ap_on_el_pr/obama_edwards

War is also a game. The war in Iraq is a game. There are a miriad of participants (President Bush, Congress, anti-war factions, the U.S. Military, terrorist groups, the people of Iraq, other countries, Iran, and on and on and on). The desired outcomes are fuzzy, but each party has theirs. There are no rules to this game that all participants adhere to. The topic of "waterboarding" is a meta-game that is defining one of the rules for the overall game. http://news.yahoo.com/s/afp/20080214/wl_afp/usbushcongressintelligenceveto_080214213137

These are all examples of games.