The presentation presents a "prisoner's dilemma" and MARGINGAME - model experiment, which allows to perform an economic experiment to explore human behavior in the market and the behavior of the market. So the prisoner's dilemma is built on a model with two participants and the warden, which makes the offer of the two options, but what if it's not a prison, and the market, and the twenty-and at least four in the future you can change the decision depending on the results and to learn something... This assumption allowed us to build a new game MARGINGAME and see the action of the second invisible hand.

1. MARGINGAME
STRATEGY GAME
Ph.D. Igor P. Ponomarev
Moscow, Economic faculty of Moscow state University
Course of “Decision-Making“
© Ponomarev I. P. 2000-2017
(c) Ponomarev I.P., 2017

2. In 1950 Melvin Dresher and Merrill M. Flood opened
the “Prisoner's dilemma".
Here is its essence: two suspects arrested before entering
the Bank and imprisoned in solitary confinement.
In order to encourage them to confess to the robbery,
the police makes them an offer...
Stays silent or betrays? Stays silent or betrays?
(c) Ponomarev I.P., 2017

3. Obviously, if they agree to both remain silent, they will
receive a minimum of and will be out in a year!
But the main question is not the understanding and
trust!!Experiments show that even with bargaining, the
parties do not agree, and pass each other and both
sit for 5 years!
ДИЛЕММА
ЗАКЛЮЧЕННОГО
(c) Ponomarev I.P., 2017
To betray
To remain
To betray To remain
55
100
010
11

4. Prisoner's dilemma: (1950)
The police every offer: "surrender or else be silent"?
If both remain silent, that evidence will not be enough
and everyone will get only one year.
If both confess, each will receive five years!
And if one will pass the other, and the other will be silent,
the one who cooperates with the investigation will be
released, and second, who will sit silent for 10 years.
1. To betray or to remain silent?
2. And what are you gonna
do partner?
3. If he talks, then I get 10 years!
(c) Ponomarev I.P., 2017
?

5. (c) Ponomarev I.P., 2017
What if the prisoners are not two, but twenty !?
And they are not prisoners, and investors in the market !?
And offers not two, but four!?
MARGINGAME
Investors (25 pep.)
Инвесторы
To invest in one
of the 4 markets
How to beat the market?
Cooperation in the competition.
The second invisible hand of the market.
BANK
(Deposit)
NANO
(shares)
TELECOM
(shares)
GAZ
(stock)
The prisoner's dilemma
Prisoners (2 pep.)
Two options:
"to betray" or "to be silent“
Cooperation with supervisor
and minimization of losses in a situation
of danger is more important than trust
20
To betray To silent
Participants
Offer
The result

6. In MARGINGAME participants face the choice of which of
multiple segments of the market to invest?
Obviously, if everything goes in one segment, then there
will be high competition and profitability will fall and may
even become negative.
Problem: how to preserve and increase capital.
MARGINGAME
(c) Ponomarev I.P., 2017
Where to invest?
BANK
(deposit)
NANO
(shares)
TELECOM
(shares)
GAZ
(stock)
How will others?
How to beat the market?
Where the greatest return?
How to gain an advantage?
?
?
?
?
?
?

7. If all goes in our most profitable segment,
its profitability to decline and they will lose
some money, instead of earn
TELECOM [5]
(shares)
GAZ [8]
(stock)
×Dт = 5/4 = 1,2 ×Dг = 8/10 = 0,8
(c) Ponomarev I.P., 2017
Return on investment in the Telecom Return on investment in the Gazprom

8. And so you start to think the majority of the participants
and they choose investing in a smaller segment
where competition is growing, and their income falls
TELECOM [5]
(shares)
GAZ [8]
(stock)
×Dт = 5/10 = 0,5 ×Dг = 8/4 = 2,0
(c) Ponomarev I.P., 2017
Return on investment in the Telecom Return on investment in the Gazprom

9. Unlike prisoner's Dilemma, the game is not over
but it's only the beginning! Importantly, what conclusions do
the participants and how they will proceed. While all have
the same initial capital, and equal access to information
about the state of the market.
The Prisoner's dilemma
M. Drescher and M. Flood,
1950 year
Participants: two persons
Location: prison
Choice of two alternatives
One decision
MARGINGAME
I. Ponomarev
2000 year
Participants: a few people
Place: the market/exchange
Choice of several alternatives
The sequence of solutions
21
(c) Ponomarev I.P., 2017

10. What happens?
After receiving the results of each of the investors not only
think about why it happened and what to do next but also
experiencing a certain emotional state, such as the joy of
investment growth or disappointment from the reduction of
capital. And he thinks, as others do?
Investor [+]
(capital growth +20%)
Investor [-]
(the fall of the capital -20%)
Yay!
I'm right!
The strategy works!
Hold position!
Ou-u-u-u!
Something went wrong?
How will others do?
To change the position?
(c) Ponomarev I.P., 2017

11. We need to act and make decisions in conditions of
uncertainty, constantly asking the question of how
the market will behave? It is logical to calculate the
probability and expected return on these fundamental
data to build strategy. Some of them do.
To act in the condition
of uncertainty and to ask
the question:
How the market will
behave next time?
To find the fundamental
factors to calculate
the probability and build
a strategy regardless
of market conditions.
OR
?
? х
0,2
х
0,8
(c) Ponomarev I.P., 2017

12. The ability to negotiate with other parties leads to nothing,
as all participants pursue the same goal.
Max, it turns out, is to coordinate their decisions so
as not to compete with the immediate environment.
NO! collusion in the market
It is impossible
to agree because
of the same interests
YES! joint coordination
with the immediate
environment
(c) Ponomarev I.P., 2017

13. First, market changes or increases the capacity of one of
the segments of the markets, or comes a decrease in
capacity of the other segment. Investors in such a situation,
react and act the same. Turns out the disturbance wave,
which is more the changes that happened.
It WAS BECAME
STOCK
5
STOCK
10
STOCK
3
BANK
10%
STOCK
5
STOCK(+2)
12
STOCK
3
BANK
10%
(c) Ponomarev I.P., 2017

14. Then the market is another change: either a new segment
or changing the old segment to the new one.
Most in such a situation nothing remains but to begin
to think and act as well as on the first move, and if you try
to do "not all" will turn out like all the others.
It WAS BECAME
STOCK
5
STOCK
10
STOCK
3
BANK
10%
STARTUP
х10
STOCK
10
STOCK
3
BANK
10%
(c) Ponomarev I.P., 2017

15. In the end, the winner is the one who thought and acted
differently than the other participants.
Wins the original people who managed to implement a
strategy to show discipline and not be like most, where
everyone thinks the same, "I'm not like everyone else".
STOCK [5]
5/1=5
capital growth х5 раз!
STOCK [12]
12/12=1
(c) Ponomarev I.P., 2017

16. MARGINGAME allows you to simulate and observe
the number of economic laws from the invisible hand
of the market impact of information on behavior of agents,
to influence emotions and formalization on
decision-making, and you can also see the effect
of the second invisible hand of the market.
BECAME
АКЦИИ
5
АКЦИИ
10
АКЦИИ
3
БАНК
10%
STARTUP
х10
STOCK
10
STOCK
3
BANK
10%
To act in the condition
information about change
of the market:
How the market will be have
if you add a new segment?
(c) Ponomarev I.P., 2017

17. The game may be played in team format, where
participants are arranged into groups and dispose of
several assets. In this case, you can work out different
models of decision-making in a group:
from a monarchical, ... , up to the individual.
(c) Ponomarev I.P., 2017

18. You can practice a group decision-making, when not only
is it important to have a good (competitive) solution, but
also to influence the decision of other group members,
otherwise the winner is the banal majority and obviousness.
(c) Ponomarev I.P., 2017
DEMOCRACY
Lead changes
and decisions are discussed
Controlled democracy
The leader does not change,
decisions are made by voting

19. More than 15 years of holding the games in different
formats and under different scenarios revealed a number of
interesting market phenomena and to test several
hypotheses. But most importantly, this opening of the
second invisible hand of the market.
(c) Ponomarev I.P., 2017
INVISIBLE HAND OF THE MARKET
Adam Smith
SECOND INVISIBLE HAND
OF THE MARKET

20. * Also found interesting the paradox of market efficiency:
despite the presence in the game is a winner who knows
how to beat the market, its rules and advice will not help
other members, as the situation and conditions will not be
the same. The winner plays with the other participants due
to the action of the second invisible hand of the market,
not the rules.
<<
Compliance
with the rules
The detection
of patterns
Uncertainty
and randomness
(c) Ponomarev I.P., 2017
TECHNOCRACY EXPERTS ANARCHY

21. Experiments have shown that it is not negotiating between
the parties of their solutions lead different segments of the
market in equilibrium, and their yield lines (the so-called
invisible hand of the market). The results of the experiments
show that there are always participants who replayed the
chaos of the market, and attempts to regulate the market
lead to a conflict of interests and enrichment of the
participant - regulator of the market. The game allows you
to observe the action of the second invisible hand of the
market that moves capital into the market.
MARGINGAME
PhD Ponomarev Igor Panteleevich
www.ArtProLab.com
ponip@mail.ru
the Economic faculty
of Moscow state University. M. V. Lomonosov(c) Ponomarev I.P., 2017