CrashCourse - 2016-03-06
Would you like to play a game, Dr. Falken? Actually, this episode isn't really about games, or Matthew Broderick, or Thermonuclear War. But enough with the long references to 1983's best movie, War Games. Today Jacob and Adriene are going to teach you about Oligopolies, which are kind of like the monopolies that we talked about last week, except with more companies involved. Then we'll get to the games, or rather, the game theory. Which is all about how companies try to compete with each other in the real world. Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks -- Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
"No farmer can never convince you to pay $10 for strawberries when you can buy it from others for 4 dollars." Well you have never been to Whole Foods.
Whole Foods is a distributor/ buyer and then turn-around-seller. They ain't Farmers lol
Whole foods is in a different market structure than producers of strawberries. when talking about the consumers of strawberries, the consumer is whole foods
Hahahah
David Williams LMAO!
If only... the farmers are at the bottom of the food chain. Retail prices do not necessarily reflect the price farmers were paid
Man, it's a good thing we have such a morally upstanding government to prevent collusion. It's not like they'd take money from major corporations and conveniently let illegal activities go unnoticed.
...Right?
...RIGHT!?
That's the biggest problem with State theory. The belief that the State cannot become corrupt and that the "evil" businessmen simply won't change their game in response to the State's actions. Once you realize this, you'll stop running to the State for help.
The video also explains that when companies collude, they have an incentive to lower prices to attract more costumers.
Louiss Rossman approves this message
What?
@Ryosuke1208 You obviously misunderstood the information presented. They would have no incentive to lower prices, since there would be no other alternatives consumers could purchase, thus their demand for the product would be relatively inelastic; this would allow the businesses to increase the price exorbitantly. Decreasing the price wouldn't increase the profit margin more than if they were to increase it, as the demand is inelastic. Prices would only decrease in a competitive market where there is no collusion, because there would be no agreement between the two and thus they would be constantly trying to fight each other in prices.
But hey, that's just a reference... an OVERDONE REFERENCE! THANKS FOR READING.
CUZ ITZ A DILLEMMA
@thetruegentlemen _ then why not solve the dilemma by using both? Like, why not try and mix them together into,like, one big super-mush toy?
----chat end------
Lulz
fuck
But that's just a theory... A GAME THEORY! THANKS FOR WATCHING.
But thats just a theory..... A ECONOMY/FISCAL THEORY! THANK FOR PURCHASING OUT PRODUCT OVER OTHER PRODUCTS.
I was really hoping they'd sneak a reference into the video too.
oooooof course this was at the top
Which can make you billions if you perfect this theory
i knew this was going to be the first thing i saw i was just wondering if i was wrong, i was not
There's a basic flaw in your version of the Prisoner's Dilemna. If neither confesses, then both are free. For a true Prisoner's Dilemna scenario, the penalty for no confession on either side must be greater than the penalty for being the one who takes a deal against the other who remains silent.
Seris thank you for explaining this correctly their version is wrong and it annoyed me to no end.
wouldn't it be violating human rights?
A payoff matrix is quantified by payoff not penalties and players make decisions to benefit the most, not avoid penalty. The PD allows a selfish actor to go free which lowers the payoff for the other player because that person chose not to snitch and can only receive a better payoff if the selfish player keeps thier mouth shut. Technically, it is not a penalty because niether player knows the actions of the other before making the decision. And the payoff for no confession from either is always an equal arbitrary value between the value of payoff to one player confessing and one not confessing.
Their version is not flawed. The key to Nash Equilibrium is that “You would never regret this decision no matter which decision the other makes.” Assume the other person chose to confess and you also chose to confess. You wouldn’t regret since you would have to pay more if you had chosen not to confess. If the other chose not to confess and you confessed, you wouldn’t regret either since you are set free, which is the best scenario possible.
Seris yes but you have to keep in mind do north parties have the same pre-existing knowledge of the laws? The rule was stated before they broke down the game, and thats ‘cooperation’ ... the best possible outcome is both parties have the same level of knowledge for the law, and their rights, before they are interrogated by law enforcement for a confession, the problem is if you are getting arrested for a petty crime like vandalism, you most likely will not have the proper education of the laws... that’s why rich people always get off for committing crimes, they know how to play the game, and work the system!
"In this kind of game, if you lose, you're bankrupt"
So Monopoly then...
I call the top hat
"Hear the lamentations of our competition." - Mongol Pizza
They messed it up because the in a proper prison dilemma if they both remain silent they still face a penalty.
It should have been:
If both confess - both pay $10,000
If both remain silent - both pay $5,000
If X confesses but Y remains silent - X pays $20,000. Y pays $0
If X remains silent but Y confesses -X pays $0 and Y pays $20,000
The idea is that you would confess because the best case scenario is paying nothing and the worst case scenario is paying $20,000. By confessing you assure you will not get the worst case scenario but you might get the best case scenario.
While remaining silent has the the second best outcome it runs the risk of also producing the worst outcome. So under the ideas of game theory it would be stupid to remain silent. It's in the other person's best interest to confess... which makes it in your best interest to confess too.
However if (as presented above) remaining silent could produce the best outcome, then there is no reason to assume the other person would confess, thus no reason to confess yourself.
I'm not an expert in economics but I've studied this a bit.
But hey, that's just a theory... A GAME THEORY!
yeah. agreed
@HughGlass sure, but should you trust criminals?
Rather going on bookish examples, it's better to get the core of the subject, and these guys were awesome at it, so they didn't mess it, it's just you have to get out of books😉
Well, the example they presented didn't express why you'd confess. There's no reason for any party to confess at all, logically, but yet in their example both parties would confess.
Yes, my dd and I thought the same. It didn't make any sense that they both didn't stay silent but I didn't know anything about game theory before so thought they might be right and we might just not get it, lol.
I want to puke when I hear about those greedy bastards who has low self confidence and no empathy for other beings. I really feel pity. How much they own, they will never be happy. They will just make others unhappy. This is so sad to me. I hope this gets better in the future as we be aware of things...
5:00-5:07- How does Phil know that he'll retain all of his old customers? How does he know that he won't lose some of them to Craig? If Craig's customers can walk to Phil, then surely Phil's customers can walk to Craig too.
I just realized how important Adblock is for me
imagine I have to watch an ad everytime I want to watch a youtube-video... wow that would give me high-end-instant-cancer to go
Can you get Adblock for an iPad?
@John Doe yeah, just google it
it's an Addon for your browser
idk if there is Adblock for Safari, if not just download chrome or firefox
Breaking News
Stan and Brandon, two infamous leaders of a bread cartel, have escaped prison with the help of one of the prison guards. Rye would a prison guard do something like this? We may never know.
I love Craig and Phil. I MISS CRAIG AND PHIL!!!!!!
I love you guys too!
3:12 Lady: "can you remember the Ad that ran before this video?"
Me who uses ad blocker: "My goals are beyond your understanding..."
ACDC Belt. Rock on!
This 10-minute free video taught me more than my 150$ book and 3 hours of reading. 😔
I really got happy and excited when I saw Mr. Clifford here since I wasn't expecting him LMAOO that says a lot
When you learn more from a free youtube video than in university.
So i literally handed in an assignment on game theory last week. Great timing :'(
You made Pandemic cry. On top of the huge pile of cash they've made selling a "lame co-op game".
I can't believe you didn't do a cross over with Matt Patt from Game Theory.
Ad before the video? ...I can't remember a world before adblock.
Or forced to reload the page or watch a potentially 2 minute long unskippable ad. Which I have had happen to me before ad-block -_-
I finally understand game theory, I always thought the prisoner dilemma was a weird way to put it thanks
You know, this crash course might be worth watching from the beginning. This is my first episode. I caught myself raising my hand in objection only to hear the next sentence acknowledging the problem.
you haven't add #25 and #26 on the playlist!
You forgot to link this one and the last one to your playlist.
The acdc belt memed me out... Why don't the cartels just sell everything cheap, that way they have less money but more respect.
"No, not that kind of game. In this game, if you loose, your bankrupt" So, we are playing monopoly?
This channel changed my life. Just love it.
I like you two - keep up the good work!
I liked the CO-OP multi-meaning reference, which they haven't done a video on.
Their game theory model is TOTALY not representing reality, real scenarios have alot greater incentives to backstab eachother, even when they communicate
With this I am definitely gonna pass micro this semester. Thank you for this crash course. It reiterated everything my teacher said but in another perspective which is something I needed.
I love the LSP looking stuffed animals that Plait has on his stand
you could convince me to buy those CC econ jeans. If I had the money
Hana, studying for my exam with some Mongol dudes kkk :)
btw. you got me through university 2 years back. props*
This was made very well. I love the basic eco theorys!
My favourite micro theory, awesome work guys :)
The Don Draper quote was absolutely perfect
I finished all my required economics courses to get my commerce degree last semester, and I'll never have to take econ again. Thank God too because I hated that subject. HOWEVER, the one topic in economics I was actually very interested in was game theory and the prisoner's dilemma, this stuff is just so cool!
new favourite crazy quote. Global fast food market has low barriers to entry.
"Unless it's some lame co-op thing..."
Hey! CHS is the largest co-op and they resent that statement!
Nice ACDC belt.
These are truly awesome videos... Thanks for the work you put into creating them!
This is awesome! I love game theory and this surely is good for the basic understanding of it. Good job, guys!
Jacob, you win points for that belt buckle sir! Great episode!!
ACDCLeadership! Sweet! This is good timing, I have an economics exam in June on this stuff. ;_;
Crash Course, what's best in life? with thick austrian accent To crush the competitors, sell your products before their, and hear the lamentations of their walletts
MrRomana3000 - 2020-05-31
Main Notes:
1- 4 types of markets
A- Perfect competition
Low barriers, identical products, no control over price (eg strawberries)
B- Monopoly
There is one large company that produces a product with few substitutes. And because high barriers prevent competition, a monopoly has a lot of control over price.
C- Monopolistic competition
a market with many producers and relatively low barriers; their products are very similar but not identical. (eg furniture stores or fast food)
D- Oligopolies
markets that have high barriers to entry and are controlled by a few large companies. Similar to monopolistic competition, their products are similar but not identical. That gives them some control over their prices. How?
2- Non-price competition:
Companies focus on things like style, quality, location, or service. The goal is to distinguish their product from their competitors.
The most recognizable form of non-price competition is advertising.
3- Game theory: the study of strategic decision making.
4- Collusion: If businesses don’t compete at all and they agree to charge the same high price, conspiring to form what economists call a cartel. They split the customers 50/50, but now they make even more profit -- benefiting at the expense of consumers. It’s illegal in the US.
5- Price leadership is when one company changes its prices, and its competitors have to decide if they’re going to follow suit.
6- Pay off matrix: In game theory, a payoff matrix is a table in which strategies of one player are listed in rows and those of the other player in columns and the cells show payoffs to each player such that the payoff of the row player is listed first.
Baban Rawale - 2020-06-06
thank you