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Computation in Economic Models

Computation in Economic Models. Lance Fortnow Northwestern University. Complexity of Equilibrium. If it is hard to computer an equilibrium than the market might not be getting there. Bounded Rationality. Cannot compute the best strategies Leads to different equilibrium

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Computation in Economic Models

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  1. Computation inEconomic Models Lance Fortnow Northwestern University

  2. Complexity of Equilibrium If it is hard to computer an equilibrium than the market might not be getting there.

  3. Bounded Rationality • Cannot compute the best strategies • Leads to different equilibrium • Using the assumed limited computational ability of opponents to our advantage.

  4. Consumer Choices

  5. Computational Awareness 1808 Restaurants in Durham

  6. Cryptography • Secure Communication (E-Commerce) • Secure Computation (Cloud Computing) • Psuedorandomness (Mixed Strategies)

  7. Computational Learning • Ability or Inability to learn, predict and adapt to opponents strategies • Provide tools and recommendations to consumers • Loss of privacy

  8. Computation as Friction

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