0. If you have suggestions for better game theory content/videos, I will be more than happy to feature them on this site. This will reach thousands of readers and increase the content’s page rank so more people can reach it.

You can email me (presh@mindyourdecisions.com) or tweet me (http://twitter.com/preshtalwalkar), or simply leave a comment.

1. Please don’t be so critical of the author. Yeah, the video is not perfect, but it is an intro, and it’s done for free. I think the video creator is very open to suggestion, given that he’s responded to many Youtube comments.

2. While there are technical issues to the approach, one cannot deny that he was *inspired* by game theory. This resulted in a measurable result. Applications are almost always “inspired by” theory, as reality is vast to capture.

3. Rubenstein bargaining is a very advanced topic. We didn’t even cover it in my math-oriented game theory class at Stanford. I hope to cover it in a post, though it is taking me time to figure out a simple explanation. Any ideas?

1) You don’t need game theory to solve this problem. It’s either a simple matter of economic “rent” and the market value of his job. We use game theory to solve problems that can’t be solved any other way. Using it here is a waste of time and mental power.

2) He takes almost ten minutes to explain what’s going on. That’s terrible.

3) The strategies he describes are hopelessly ambiguous. What does it mean, exactly, to play hardball? And is playing hardball discreetly different from lowball? Clearly, this is a CONTINUUM of possible strategies, not discreet choices.

4) Thus, supposing that this game should be described game theoretically–and it shouldn’t–you need some sort of bargaining or ultimatum game. Maybe Rubinstein it and see what happens. So the “game” he solves here doesn’t even fit what he’s trying to do.

Search “game theory” on YouTube. This is the fifth result. Another from him (also close to ten minutes) is third. The second is the scene from A Beautiful Mind that gets Nash equilibrium wrong. I have no clue what the flip the fourth is. The first is a cute clip from Numb3rs. It’s a shame that curious people will find these videos instead of a proper introduction.

I think we -kind of- infer that he is charging more than 250-300$/hr. I quote from above ;

“the work I was doing was worth closer to about $250 per hour, in that day back in 2001.”

So there is still a profit margin in the market when cost is around 250$ on a hourly basis. If we exclude the possibility of asymmetrical information and assume a competitive market, by the nature of industry, the owner should be charging more than 300$. If he is not, he is underperforming.