Tag: Game Theory

Game Theory on Picking Halloween Candy And Loans

Bank Game Theory - Competing For Loans

Many parents have dealt with the issue of how to divide up Halloween candy among siblings. It’s not easy. If all houses gave out the same candy, it wouldn’t be a problem. But houses give out different candy, or they allow you to choose, and those in the front of the pack had different choices as those in the back. Whatever the case, candy is not all the same. As a result, candy is distributed unevenly forcing parents that are concerned with equality to employ some game theory.

How Technology Alters the Branch Game Theory Problem

Game Theory in Branching

In branch banking, there was always the dilemma in gathering customers. The number of customers a branch would attract was a mathematical function based on location of the nearest competing branch, services/products, brand and price. All things being equal, customers tend to choose the branch that is the closest. Lower the price of a product, increase the brand value (marketing) or offer some unique services/products, and a branch could pull from a wider service area and increase market share.

How To Pick The Best Loan From A Sequence

Game theory

There is a simple mathematical concept known as the “maximum of sequence” that every banker should know in order to increase performance. The concept is derived from the "Marriage Problem" made popular in the 60’s that presents the following issue: Suppose you must choose a spouse out of 100 applicants. You may interview each one once and after each interview you must decide whether to marry that person or not. If you decline, you lose the opportunity forever. For the uninitiated, the odds of finding the best partner are about 1 in 100.

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