RAKESH VOHRA

KELLOGG SCHOOL OF MANAGEMENT

NORTHWESTERN UNIVERSITY

CS and ECON

Brief History of Interactions

Brief History of Interactions

So, 5 minutes?

What is CS?

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.

What is ECON?

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.'

Obvious Similarities

Vintage (Victorian)

Employment of Mathematics (discrete vs. continuous)

Imperial: each holds a perspective that is believed to have universal application

John von Neuman

Game Theory

Duality theorem of linear programming.

Cellular automata.

Merge Sort algorithm (according to Knuth)

Pseudorandom numbers

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

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'.

de Prony’s Machine

Hierarchy of 3 levels

Top: Adrien Legendre and Lazare Carnot:decided on the formulas to be used

in the calculations.

de Prony’s 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.

Babbage

On the Economy of Machinery and Manufactures (1835)

Introduces notion of economies scale.

Division of labor impacts not just output, but wages.

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.”

Algorithms

Algorithms in Economics

Procedure, Process, Protocol, Tatonnement and Mechanism

Proposal algorithm

Top Trading Cycle Algorithm

Algorithms in Economics

Ascending Auctions

Fictitious Play

Backward Induction

Rationalizability

Algorithm as Existence Proof

Stable Matching and House Allocation

Rationalizability of Preferences

Algorithm as Mechanism

Auctions

Preference Aggregation - Consensus methods

Algorithm as Model/Dynamic

Hannan Theorem/Experts Theorem

Approachability

Reinforcement learning

Search Models in Matching Markets

Replicator Dynamics

Complexity

Complexity: Bounded Rationality

Herbert Simon

Bounded Depth Automata

Incomplete Contracts

Imitability

Organizational Design (Babbage and de Prony!)

Complexity: Communication

Organizational Design

Size of Message Spaces

Complexity: Computation

Hardness of Computing Equilibrium

Hardness of Manipulation (voting, forecasting)

MDP's

Groebner basis

Complexity: Description

Kolmogorov-Entropy

Strategies in Repeated Games

Complexity: Learning

VC dimension

Vapnik-Chervonenkis

Mediation, Trust & Privacy

Reputation/Repetition

Implementation without a mediator

Multiparty computation

Preference revelation

Indirect vs. Direct mechanisms

Epistemology

Role of Knowledge in Games

e-mail game, general's dilemma

TARK

Social Networks

Formation

Information Transmission

Distribution of wealth, income