RAKESH VOHRA

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CS and ECON

• RAKESH VOHRA
• KELLOGG SCHOOL OF MANAGEMENT
• NORTHWESTERN UNIVERSITY

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Brief History of Interactions
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Brief History of Interactions

• So, 5 minutes?

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What is CS?
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What is CS?

• Conception has changed over time
• Subjects once central have moved to the
  periphery, e.g., Numerical Analysis
• Subjects once on the periphery are closer to the
  center, e.g., statistics (data mining,
  clustering, classification, inference)
• Border is porus Combinatorial Optimization,
  Graph Theory, Combinatorics, Logic
• Even with subfields there is enormous variance,
  e.g., AI.

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What is ECON?
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What is ECON?

• Debate about it's definition, scope and label
  since inception.
• Whatley Catallactics (Science of Exchange)
• Robbins
• is the science which studies human behavior as a
  relationship between ends and scarce means which
  have alternative uses.'

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Obvious Similarities

• Vintage (Victorian)
• Employment of Mathematics (discrete vs.
  continuous)
• Imperial each holds a perspective that is
  believed to have universal application

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John von Neuman

• Game Theory
• Duality theorem of linear programming.
• Cellular automata.
• Merge Sort algorithm (according to Knuth)
• Pseudorandom numbers

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Gaspard de Prony (1755-1839)

• Charged to produce log and trig tables to between
  14 and 29 decimal places.
• Inspired by Adam Smith's analysis of division of
  labor

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Gaspard de Prony (1755-1839)

• I conceived all of a sudden the idea of applying
  the same method to the immense work with which I
  had been burdened, and to manufacture logarithms
  as one would manufacture pins'.

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de Pronys Machine

• Hierarchy of 3 levels
• Top
• Adrien Legendre and Lazare Carnot
• decided on the formulas to be used in
• the calculations.

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de Pronys Machine

• Middle Given the mathematical formulas to be
  used, organized the computations and compiled the
  results ready for printing.
• Bottom 60-80 unemployed hairdressers who
  performed the actual computations that required
  only addition and subtraction.

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Babbage

• On the Economy of Machinery and Manufactures
  (1835)
• Introduces notion of economies scale.
• Division of labor impacts not just output, but
  wages.

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Babbage

• The present volume may be considered as one of
  the consequences that have resulted from the
  Calculating-Engine, the construction of which I
  have been so long superintending.

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Algorithms
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Algorithms in Economics

• Procedure, Process, Protocol, Tatonnement and
  Mechanism
• Proposal algorithm
• Top Trading Cycle Algorithm

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Algorithms in Economics

• Ascending Auctions
• Fictitious Play
• Backward Induction
• Rationalizability

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Algorithm as Existence Proof

• Stable Matching and House Allocation
• Rationalizability of Preferences

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Algorithm as Mechanism

• Auctions
• Preference Aggregation - Consensus methods

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Algorithm as Model/Dynamic

• Hannan Theorem/Experts Theorem
• Approachability
• Reinforcement learning
• Search Models in Matching Markets
• Replicator Dynamics

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Complexity
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Complexity Bounded Rationality

• Herbert Simon
• Bounded Depth Automata
• Incomplete Contracts
• Imitability
• Organizational Design (Babbage and de Prony!)

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Complexity Communication

• Organizational Design
• Size of Message Spaces

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Complexity Computation

• Hardness of Computing Equilibrium
• Hardness of Manipulation (voting, forecasting)
• MDP's
• Groebner basis

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Complexity Description

• Kolmogorov-Entropy
• Strategies in Repeated Games

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Complexity Learning

• VC dimension
• Vapnik-Chervonenkis

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Mediation, Trust Privacy

• Reputation/Repetition
• Implementation without a mediator
• Multiparty computation
• Preference revelation
• Indirect vs. Direct mechanisms

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Epistemology

• Role of Knowledge in Games
• e-mail game, general's dilemma
• TARK

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Social Networks

• Formation
• Information Transmission
• Distribution of wealth, income