From its beginnings in the early 1900s, game theory has been a very mathematical, technical subject. However, it also provides valuable, everyday lessons that are important for managers and executives to understand. But current books and textbooks are mostly highly mathematical, and almost all are very long. This book will deliver a focused and precise, but nonmathematical, overview of topics in game theory that are directly relevant to managing an organization. Game theory is the science of action and reaction. While most standard economic analyses embody the science of making an optimal choice, this kind of analysis is largely undertaken in a vacuum. For example, when a firm raises or lowers its price, this is rarely the end of the story—competitors are likely to react by changing their prices and quantities as well. Game theory adds in this extra layer of realism. It teaches managers to think ahead and foresee possible reactions to their actions.
From its beginnings in the early 1900s, game theory has been a very mathematical, technical subject. However, it also provides valuable, everyday lessons that are important for managers and executives to understand. But current books and textbooks are mostly highly mathematical, and almost all are very long. This book will deliver a focused and precise, but nonmathematical, overview of topics in game theory that are directly relevant to managing an organization. Game theory is the science of action and reaction. While most standard economic analyses embody the science of making an optimal choice, this kind of analysis is largely undertaken in a vacuum. For example, when a firm raises or lowers its price, this is rarely the end of the story—competitors are likely to react by changing their prices and quantities as well. Game theory adds in this extra layer of realism. It teaches managers to think ahead and foresee possible reactions to their actions.
Liquidity involves the degree to which an asset can be bought or sold in the market without affecting its price. The 2007 to 2009 financial crisis was characterized by a decrease in liquidity and necessitated the introduction of Basel III capital and liquidity regulation in 2010. Inside, you’ll learn how such regulations are applied on a broad crosssection of countries in order to understand and demonstrate the implications of Basel III. This book summarizes the defining features of the Basel I, II, and III Accords and their perceived shortcomings, as well as the role of the Basel Committee on Banking Supervision (BCBS) in promulgating international banking regulation. Basel III quantifies liquidity risk by using the measures liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). This book discusses approximation techniques that may be used to estimate these liquidity measures. Inside, the authors highlight the connections between liquidity creation and bank capital and provide you with the details of an investigation of the risks liquidity creation generates for banks. In addition, we consider the impact of the implementation of Basel III liquidity regulation on macroeconomic variables such as GDP, investment, inflation, consumption, income, savings, and employment.
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