CHAPTER 5 Strategy
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unfortunate name Golden Balls,
Note:TRASMISSIONE TV
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secret choice to split or steal.
Note:DUE CONCORRDENTI HANNO DAVANTO 10000 DOLLARI...DILEMMA DEL PRIGIONIERO
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you should certainly steal.
Note:COMPORTAMENTO RAZIONALE
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stealing can’t hurt you but might help you.
Note:IN ALTRE PAROLE...SPLIT È COME STEAL MA TI FA VINCERE MENO
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everyone steals, and everyone goes home empty-handed.
Note:IN UN MONDO DI RAZIONALISTO
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the manifestly false assumption that rational behavior must lead to good outcomes.
Note:UN FALSO ASSUNTO CHE CONFONDE LE IDEE
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everyone (perfectly rationally) stands up to see better, and as a result nobody sees any better.
Note:ALTRO ESEMPII
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contestants have a few minutes to negotiate and make promises,
Note:IN GOLDEN BALL
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the negotiation should make no difference.
Note:IN TEORIA
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they care what’s being said about them the next day over water coolers throughout the United Kingdom.
Note:MA IN PRATICA C È UNA PREOCCUPAZIONE
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passionate paeans to their own honesty.
Note:CONTENUTI DELLA DISCUSSIINE
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IBRAHIM: If I give you my word . . . now let me tell you what my word means. My father once said to me, “A man who doesn’t keep his word is not a man.
Note:IL TRADITORE
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NICK: I’m going to choose the steal ball. I want you to do split, and I promise you that I will split the money with you.
Note:UNA STRANA STRATEGIA
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If Nick keeps his promise to steal, then split becomes a no-lose strategy for Ibrahim. He has no chance of winning any money directly but at least some chance that Nick will keep his subsidiary promise and split after the show.
Note:LA COSA COESA NTERESSANTE
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1 The Prisoner’s Dilemma
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Confessing is a no-lose strategy.
Note:DILEMMA DEL PRIGIONIERO...LA STRATEGIA DOMINANTE
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If Jeter confesses,
Note:5 ANNI SE CONFESSI ANCHE TU 10 SE NN CONFESSI
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If Jeter doesn’t confess,
Note:1 ANNO SE CONFESSI ANCHE TU 5 SE NN CONFESSI
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many of those have in fact missed the point entirely.
Note:È FAMSO MA....PO CHI CONSIDERANO L ASPETTO NO BRAINER
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as long as everyone is self-interested and rational, everyone plays tough,
Note:IN TUTTI WS GIOCHI LA CONCLUSIONE È LA STESSA
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key idea in economics: In general, rational behavior need not lead to good outcomes.
Note:GLI ECONOMISTI AMANO IL DILEMMA
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Arms races are rational (I’m always better off armed, whether you’re armed or not, so of course I should arm), but they can impoverish everyone.
Note:ALTRO ESEMPIO
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The war against cancer is unlikely to be won by voluntary contributions,
Note:ESEMPIO
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Shared pastureland tends to be overgrazed;
Note:ESEMPIO
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communal fishing grounds
Note:ESEMPIO
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tragedy of the commons,
Note:BATTESIMO ...ALTRO NOME DEL DILEMMA
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2 Dirty Beaches
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Diamond Beach is gorgeous,
Note:NEL TUO PAESE CI SONO DUE SPIAGGE
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Zircon Beach is quite ordinary.
Note:SECONDA...PERIFERICA
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A substantial oil deposit runs under both beaches. If you’re determined to get at the oil, is it better to allow drilling
Note:DILEMMA
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Because everyone agrees that Diamond Beach is gorgeous, it’s probably overrun and ruined by the crowds. That’s where I’d start drilling.
Note:SOLUZIONE
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a freely available public resource has social value only insofar as people differ about its value.
Note:MORALE PARADOSSALE....IL BENE PUBBLICO FUNZIONA SE POCO APPREZZATO
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if the beach were more appealing than home, more people would head to the beach, adding to the congestion and subtracting from the appeal.
Note:IL LIMITE...FRONTIERA
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It’s avoidable if Diamond Beach is so large that crowds are not an issue.
Note:SOLUZIONI ALLA TRAGEDIA...PRIMA
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an admission charge
Note:SECONDA SOLUZIONE
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if some people like Diamond Beach substantially more than others do,
Note:TERZA SOLUZIONE
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3 The Two-Sided Card Game
Note:TttttttttttttCREDENZE BALLERINE...SURPRISE QUIZ....EAAN
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There’s a card with 0 and 1 on the sides, another with 1 and 2, another with 2 and 3, and so on,
Note:CARTE NUMERATE
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referee chooses a card at random and holds it up so that you can see one side and I can see the other.
Note:I GIOCATORI SCELGONO...PASS OR PLAY?
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If we both play, the person facing the higher number wins $200, the person facing the lower number loses $100,
Note:PLAY/PLAY
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A card has been chosen. On your side is the number 65. Do you pass or play?
Note:DILEMMA
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On your side is the number 0.
Note:PRIMO CASO....DI CERTO CHIUNQUE PASSEREBBE
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What should you do if you see a 1?
Note:NESSUNA POSSIBILITÁ DI VINCERE...SE L ALTRO NN PASSA HO PERSO...QUINDI
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we both always pass when we see a 1.
Note:ESITO
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What if you see a 2? Then either I see a 1, in which case I pass and it doesn’t matter what you do, or I see a 3, in which case you can only lose. So you should pass on seeing 2.
Note:ANCORA
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Even if you see 100, there’s no particular reason to play. It’s true that you can’t lose, but you can’t win either, because I always pass on 99.
Note:CASO LIMITE
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Each of them wins $200 about half the time, loses $100 about half the time, and goes home rich.
Note:IL CUGINO SCEMO CHE GIOCA SEMPRE
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Sometimes it’s better for neither of you to be rational than for both to be.
Note:MORALE
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4 Deep Pockets
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He and my math teacher would empty all the cash out of their pockets onto the desk. Whoever had brought the most claimed the entire pile. (In case of a tie, they both kept what they’d brought.)
Note:IL GIOCO DEI PORTAFOGLI....IL GIOCO CHE CONVIENE A TUTTI
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Should you carry lots of money to increase your chance of winning? Should you carry less to minimize your losses?
Note:QUAL È LA STRATEGIA MIGLIORE
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If you bring $0, you’re sure not to lose anything,
Note:LA SICUREZZA
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If you bring exactly $1,
Note:VINCI SOLO CON CHI GIRA CON ZERO...GIOCARE MN HA SENSO
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If you bring exactly $2, you still can’t win any money, because we know your opponent never brings exactly $1. On the other hand, you might lose. So there’s nothing to be gained and $2 to be lost.
Note:NESSUNO CHE VUOLE GIOCARE GIRA CON UN DOLLARO
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If you’re both rational, the only amount you can possibly bring every day is $0.
Note:CONCLUSIONE SE TUTTI SONO RAZIONALI E CON COMMOM KNOWLADGE
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6 Art at Auction
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You’re participating in a sealed-bid auction for a one-of-a-kind painting, for which you’d be happy to pay $100 but not a penny more.
Note:IL CASO
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What number should you put in your envelope?
Note:DILEMMA
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don’t bid more than $100.
Note:L UNICO CONSIGLIO SE MM CONOSCO LA TUA PREFERENZA X IL RISCHIO
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7 Art at Auction, Take Two
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the high bidder buys the painting for the amount of the second-highest bid.
Note:CAMBIO DI REGOLE.....ORA CHE FAI?
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You should bid exactly $100, because there is no conceivable circumstance in which you might regret that bid.
Note:CONSIGLIO
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Any other choice could turn out badly.
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8 The Hundred-Dollar Auction
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A hundred-dollar bill has been put up for auction.
Note:UN ASTA SINGOLARE
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high bidder gets the hundred-dollar bill, but both bidders pay the amount
Note:REGOLA
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Your mistake was showing up in the first place.
Note:ASTA ASURDA
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If you bid, say, $5, then your opponent has a choice: drop out (and owe $5), or raise the bid to $6 and win the hundred-dollar bill. So the bidding is sure to go a lot higher than that. What happens if you’ve just bid, say, $99? Then your opponent has a choice: drop out and owe $99, or raise the bid to $100, hoping to win the hundred-dollar bill and break even. Of course, the latter is the better choice, so he bids $100.
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CONVIENE OFFRIRE SEMPRE DI PIÙ...ANCHE IN PERDITA...GIUSTO X MIN PERDITA...IL MECCANISMO XVERSO
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The point is that once you’re in, there’s never a right time to drop out.
Note:USCIRE È ASSURDO
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Imagine a congressional race where the biggest campaign spender is sure to win.
Note:È UNA METAFORA X LE CAMPAGNE ELETTORALI
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Once you’re in that race, there’s no right time to quit spending
Note:INFATTI
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9 The Chicken and the Eggs
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10 Card Golf
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Each of ten people holds a stack of cards.
Note:MAZZI NUMERATI A CASACCIO
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Your task is to collect fifty cards. Your score is the total of all the numbers on the cards
Note:LO SCOPO È MINIMIZZARE IL PROPRIO PUNTEGGIO
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You could ask all ten people to hand over their five lowest cards.
Note:NON FUNZIONA...LE PIÙ BASSE POSSONO ESSERE DETENUTE DALLA STESSA XSONA
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First ask everyone to hand over all of their 1 cards. Then ask everyone to hand over all of their 2 cards. Then ask everyone to hand over all of their 3 cards. Stop when you’ve got fifty cards. (If you go over fifty, you can always discard a few of the most recently collected.)
Note:STRATEGIA ALTERNATIVA
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11 The Czar’s Dilemma
Note:TttttttttttttLA LOGICA DEI PREZZI DE IDEOLOGIZZATA
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Perhaps Farmer Nichols can produce one bushel for $3, a second bushel for an additional $5, a third for an additional $7, and a fourth for an additional $9, while Farmer Littlefield can produce one bushel for $1, a second for an additional $4, a third for an additional $8, and a fourth for an additional $12. All the farmers know their own costs, but you don’t know any of them. Your task is to arrange for the production of 50 bushels of wheat. Your goal is to conserve resources by minimizing production costs.
Note:SEI LO ZAR DELL AGRICOLTURA...IL TUO PROB È QS
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First direct each farmer to produce as many bushels as possible at a cost of $1 per bushel or less. Then direct them to produce as many as possible at $2 or less. Then $3,
Note:LA STRATEGIA OTTIMA...VEDI PRIMA
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12 The Czar’s Problem Gets a Little Harder
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the farmers see no reason to take directions from you. And you have no way of punishing disobedience, because you have no idea what the production costs are on any given farm, so you don’t know who’s disobeying.
Note:IL PROBLEMA SI COMPLICA....COME FARSI CONSEGNARE LE 50 TONNELLATE MENO COSTOSE?
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announce that you’ll pay $1 a bushel for wheat. You’ll discover that every farmer who can produce a bushel for less than $1 will choose to do so.
Note:SOLUZIONE
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That works! It also renders you, as czar, obsolete—because
Note:NEMMENO SERVI PIÙ
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The price system does the best possible job of producing any given quantity of wheat (or anything else) at the lowest possible cost. No czar, no planning board, and no other mechanism can do better.
Note:LA MORALE DELL ECONOMIA
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A system of prices and individual choices
Note:LA SAGGIA AMMINISTRAZIONE
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If you want to know why Americans prosper while North Koreans starve,
Note:RICCHEZZA DELLE NAZIONI
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the problem of cost minimization can’t in practice be solved—even approximately—by any mechanism other than the price system.
Note:IL MONDO È MOLTO PIÙ COMPLICAT C È UN PROB INFORMATIVO...QUINDI
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The moral of the Czar’s Dilemma is that rational behavior—in this case the rational behavior of farmers seeking to maximize their profits—can lead to the very best possible outcome,
Note:MORALE ROVESCIATA RISPETTO AL PRIGIONIERO
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13 The Czar’s Other Dilemma
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allocating the limited supply of natural gas to the various businesses
Note:IL TUO NUOVO COMPITO
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natural gas supply is 20 cubic feet a day
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chicken farms have traditionally used about 10, and steel mills have traditionally used about 10.
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because of an earthquake, the natural gas supply is about to be cut in half,
Note:EMERGENZA
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how much should you allocate to the steel mills and how much to the chicken farms?
Note:DOMANDA
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5 cubic feet to chicken farms and 5 to steel mills.
Note:SOLUZIONE INTUITIVA...DATI I PRECEDENTI
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Bad idea. As it happens, the steel mills can’t operate without natural gas. But the chicken farms can quite easily dispense with it.
Note:BAD IDEA
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So you should let the steel mills have all the natural gas.
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The only way to get the solution was to have a rather obscure bit of knowledge about chickens—which
Note:PURTROPPO
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Almost nobody has that obscure bit of knowledge, except for chicken farmers,
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So the key point here is that no czar is likely to be able to solve problem 13,
Note:CONCLUSIONE
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let the price system do its work.
Note:ARMA SEGRETA
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the chicken farmers (along with everyone else who has good substitutes available) decide all on their own to switch from natural gas to chicken feed.
Note:QUANDO IL PREZZO CRESCE...
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The chief merit of the price system is that it makes effective use of information that is not available to any single decision maker.
IL MERITO DEL MERCATO
