[vlovich123]

> the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable.

And yet we’ve clearly observed stable price fixing cartels. Maybe the word “unstable” means too much or the game theory model used doesn’t describe the real world accurately. When theory is contradicted by the evidence, it would be wise to consider the theory is flawed.

[moomin]

I suspect this is a standard mathematical “it is computationally impossible to do this in the general case despite it being entirely feasible in many cases”.

[narnarpapadaddy]

Game theory here is applied to two fundamental market theorems. It’s a way to analyze the validity of those assumptions, rather than to build a new model. Empirical evidence to the contrary is expected given mutually inconsistent premises, which is what the author’s results predict. The author has simply used game theory math to disprove economist math.

[vlovich123]

Simple resolution: the market isn’t maximally efficient at all information discovery but it is optimally efficient as far as is practical. The economist math still works.

[narnarpapadaddy]

I buy that markets are like a traveling salesman problem. “Impossible” in the general case, but good enough could algorithms exist. Where’s the economist formulation of that algorithm? What are the policy implications that fall out of that?

I admit I’m not particularly well versed in this space, but I’ve never come across that formulation, only the “pure” one the original researcher says is internally inconsistent. I don’t necessarily buy “it’s close enough it doesn’t matter” given what I perceive as many notable exceptions.

[nok22kon]

where do nuclear weapons fit in? do they make markets more/less efficient/competitive?

[narnarpapadaddy]

Way above my pay grade. I’m not an expert in game theory, economics, warfare, or nuclear proliferation. :)

[lstodd]

Where do conventional weapons fit it?

Nuclear has been in maintenance mode for so long that there are doubts about if anyone could right now detonate one without shitting their pants on account if it would even go off.

[roblabla]

Or maybe the markets are actually proof that P = NP :^)

[silentmafia]

Or, P=NP