Risky Kakanomics

Gloria Origgi writes: This is an application of the theory of kakonomics, that is, the study of the rational preferences for lower-quality or mediocre outcomes, to the apparently weird results of Italian elections. The apparent irrationality of 30% of the electorate who decided to vote for Berlusconi again is explained as a perfectly rational strategy of maintaining a system of mediocre exchanges in which politicians don’t do what they have promised to do and citizens […]

Trembling Hands

At least since Selten (1975) game theorists have considered that given a series of decisions there is some small probability that the person making the decisions will make a mistake and do something irrational, even if she knows the right thing to do.  This is called the trembling hand approach: although a person rationally knows the right (rational) thing to do, sometimes her hand trembles and she chooses incorrectly. Therefore, given a game defined by […]


Readers of this blog may have noticed a lack of updates recently. I can’t apologize: I’ve been eating, breathing and drinking philosophy for so long, that now that I have written everything I wanted to write, I feel free.  I wish it on all of you. [Happy New Year Everyone!] But this doesn’t stop me from thinking.  I was at a Christmas party  and got talking with an Indonesian economics grad student.  He was researching […]