Hedge Funds

Game Theory- For Gloves. Why new players hardly win!

paperplane
Publish date: Fri, 11 Dec 2020, 12:53 AM

When collusive agreements are made openly and formally, the firms involved are called a cartel. In some cases, collusion is successful; other times, the forces of competition overpower collusive behavior.

There are other possible oligopoly strategies that are associated with decision making based on game theory. The Cournot equilibrium and the Nash equilibrium are examples of specific strategic games. 

In the Stackelberg model, the leader firm chooses its output first and then the follower firm chooses after observing the leader’s output. It can be shown that the leader firm has a distinct advantage, being a first mover.

 

In the Stackelberg game, the leader can aggressively overproduce to force the follower to scale back its production or even punish or eliminate the weaker opponent. 

Discussions
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EngineeringProfit

Too late into the party, how to win? Now many other bulls are running - traders are spoilt with choices

2020-12-11 08:30

paperplane

Increase investment in cyclical companies because they are expected to have the largest increase in earnings.

Reduce investments in defensive companies because they are expected to have only a modest increase in earnings.

Increase investments in commodities and commodity-oriented equities because they will benefit from higher production and output.

Reduce investments in fixed-income securities, especially longer-maturity securities, because they will decline in price as interest rates rise. Raise exposure to speculative fixed-income securities (junk bonds) because default risks decrease in an economic expansion.

2020-12-13 22:19

paperplane

if you want to be BIG BOSS in companies, you must know GAME THEORY MAH. some tycoon are rich purely lucks lah.

If you dont continue learn and improve, sooner later the market will kick you out of business.

2020-12-15 13:07

Alex™

the market tends to surprise the majority. Never say never =)

2020-12-19 08:33

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