09 Jul Warren Buffett’s logic behind his plan to pass campaign finance reform
1. What was Warren Buffett’s logic behind his plan to pass campaign finance reform?
2. In the game between Reagan and Congress described in the chapter, how did the addition of a line-item veto (giving the President more freedom) result in a worse outcome for Reagan?
3. Briefly describe John Manard Keynes’ metaphor for the stock market.
4. If a Prisoner’s dilemma game is repeated exactly 100 times, what does game theory predict will happen (in each of the rounds)?
5. In the chapter’s duopoly (two firm) example of a Prisoner’s dilemma, Rainbow’s End and B.B. Lean are pitted against each other in a clothing catalog pricing decision. Suppose that the manager of Randow’s End doesn’t trust B.B. Lean’s manager to keep the price high at $80. What price should Rainbow’s End charge? Suppose, rather, that the manager of Rainbow’s End has very good reason to believe that B.B. Lean will set their price at $80. What price should they charge?
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