Financial crisis game theory

These runs coupled with the U. While we know that these factors helped create the economic crisis, we do not know the exact reason behind the attitude changes that led people to believe that financial institutions were unsound. Runs on banks delve into the role of game theory in economics and finance.

For instance, if people think that a bank is safe, and they believe that other people think the bank is safe, then they will most likely leave their investments deposited in the banks. However, if for some reason people start to believe that banks are unsafe, then they will start withdrawing their investments.

Name required. Mail will not be published required. Applying Game Theory to the Greek Debt Crisis The Greek debt crisis is not only a substantial exemplification of socioeconomic and political factors causing a painful accumulation of debt and necessary financial bailout, but also of real world applications for game theory. Google Search. Entries Comments. Hosted by CampusPress. The Bus-wait formula an overly scientific way to analyze a common situation…like how to find true love.

Bus-wait Formula, The. But then you might find yourself halfway between stops when the bus whips past, which would be deeply annoying. What to do? Should you walk or should you wait? This question has plagued commuters for years, but this year three undergraduate students at Harvard and Cal Tech decided to resolve it.

Update : see the original research paper. I run the MindYourDecisions channel on YouTube , which has over 1 million subscribers and million views. As you might expect, the links for my books go to their listings on Amazon.

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If you purchase through these links, I may be compensated for purchases made on Amazon. The Joy of Game Theory shows how you can use math to out-think your competition. The Irrationality Illusion: How To Make Smart Decisions And Overcome Bias is a handbook that explains the many ways we are biased about decision-making and offers techniques to make smart decisions. The Best Mental Math Tricks teaches how you can look like a math genius by solving problems in your head rated 4. Multiply Numbers By Drawing Lines This book is a reference guide for my video that has over 1 million views on a geometric method to multiply numbers.

Mind Your Puzzles is a collection of the three "Math Puzzles" books, volumes 1, 2, and 3. The purpose of this article is to show investors how Dow Theory can determine the end of a bull market cycle.

Since the current bull market is still intact, the previous bull market which ended October will be analyzed. The end of the previous bull market lead to what is now known as the ' Financial Crisis'. This was one of the severest bear markets in many decades and is shown below in Chart 1. This severe bear market caught a lot of investors of guard as they were not equipped to deal with such a financial crisis. Dow Theory can alert investors to a possible bull market reversal and is a simple principle to use which can be summarized as follows:.

Chart 2. Chart 3. Referring to the above charts, the conditions for a Dow Theory market reversal signal are satisfied. Note that the second relative high does not need to be higher than the first - which was the case with the DOW Transport Index. Also the day moving average is a useful tool to help locate the relative highs and lows as this helps to highlight the short-term trends. The bull market officially peaked in October