Modelling the market for stolen art with Game Theory.pptVIP

Stolen Art 50,000 paintings stolen from museums and private collections around the world including 287 by Picasso, 43 by Van Gogh, 26 by Renoir, more than 100 by Rembrandt . Stolen art works dont end up on the walls of criminal connoisseurs. They usually end up in storage. Mr Hill former member of Metropolitan Police : I never pay a ransom. What I do is settle expenses and provide a finders fee.“ Tate Gallery paid 3 million pounds to someone who engineered the return of 2 works by Turner. If thieves could somehow be persuaded that no finders fees would ever be paid, they might stop stealing works of art. But do you know a way to persuade them that no collector, and no gallery, never mind an insurance company, will ever hand over a cent to get its treasured masterpieces returned? he asks. Because I dont. Modeling with Game Theory What is the difference from previous “games” we have studied? Decisions are made sequentially. The thief decides first. Decisions of one player is seen by another player before his decision is made. If the thief steals, the museum sees the art missing. We can still use Game Theory to model the previous problem. But first, let us play a game. Ultimatum game One of you is Player A and the other is Player B. You have ￡10 to divide between you. Player A makes an offer how to divide it to Player B. Player B can accept or reject. If Player B accepts, the payoff is as offered. If Player B rejects, they both get zero. Extensive Form Games  with perfect information In both these games, decisions are made sequentially with all players knowing fully what the decisions were made prior. We can represent this problem by drawing a game tree. Each node represents a player. Each branch represents a player’s possible decisions. At the end of the tree are the payoffs. Graphing Extension Form games A B a1 a2 b1 b1 b2 b2 ua a1,b2 ,ub a1,b2 ua a2,b2 ,ub a2,b2 ua a1,b1 ,ub a1,b1 ua a2,b1 ,ub a2,b1 B B A Graphing Extension Form games A B a1 a