Game Theory and the Stimulus (w/ poll)

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Wednesday February 18, 2009 · 10:44 PM PST

2009/02/18 · 22:44

Does the effect of the stimulus depend on which projects it funds or how big it is?

Game-theoretic analysis suggests that:

The government is uniquely capable of causing a transition from the suboptimal equilibrium of the game to the optimal equilibrium.

Its ability to do so is dependent only on the fact that the stimulus does anything to cause more private spending and is large enough to signal credible commitment.

Poll

96 votes Show Results

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Yes, it is both large enough and correctly focused.

10 votes

Partially, it is large enough but doesn't focus on the right things.

16 votes

Partially, it focuses on the right things but isn't large enough.

45 votes

No, it is neither large enough nor correctly focused.

25 votes

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