Quote from: dinofelis on April 10, 2015, 02:11:22 PM

Quote from: thaaanos on April 10, 2015, 10:14:42 AM

1st there is not a single nash equlibrium (not to mention that it may not even be a single point but a closed trajectory in the solution space) It is highly sensitive to the initial parameters, one could at least set the initial parameters so (Rig the game) so that players eventually gravitate to the optimum eq.

There can be several Nash equilibria. But there is at least one. (Nash' theorem).

Initial conditions (and changing conditions !) will determine WHICH equilibrium is reached (hypothetically, in a steady-state situation). But what is for sure, is that no situation that is NOT a Nash equilibrium, will remain stable.

And you seem to forget that central planning ITSELF is a game, too. Who is going to be a central planner, and what are you going to do as a potential or actual central planner, IS JUST AS WELL A GAME. Central planners also optimize their personal gain.

Nash equilibrium has nothing to do with stability. Don't know why you keep saying this. Its a mathematical way to analyze other players moves. What the probabilities are for each move

Cold War. US politicians use game theory in a MAD strategy. Nash equilibrium tells them that no matter how much nuclear missiles is built up, neither side most probably won't strike first in a nuclear war cause it'll wipe themselves out as well (mutually assured destruction). So the build up continues till USSR economy collapse. Just because USSR collapse it doesn't mean equilibrium is achieved. I think you mistake the meaning of equilibria. Nash equilibrium isn't some reversion to the mean or anything like that. Nash equilibria is the most probable move given the rules and each players strategy