Behavioral Game Theory

England have beaten India in India at cricket! Which for those of you who know nothing about cricket is about as good as it gets. But, this post was not prompted by Englands success. Instead it was prompted by a discussion I heard on the TMS commentary of the penultimate day of the series.    A bit of background info first: Cricket, like most sports, relies on an umpire to make decisions – and they sometimes get them wrong. Technology has been progressively introduced over the last decade in order to reduce errors. The latest development is a Decision Review System. India, however, said that they did not want to use the system against England. And the International Cricket Council Regulations say that it can only be used if both sides agree. The commentators were discussing India’s decision not to use the system after England captain Alastair Cook was wrongly given out for the second time in the game. If the Decision Review System had been in use both decisions could have...

We’ve just got back from a couple of days in France. It was a good trip, but one thing is clear - smoking is a problem in France. I have nothing against people smoking if that’s what they choose to do. What I do have an issue with, is myself and my family having to ‘share’ in their smoking. And for a large part of our trip we had no choice but to share. In public spaces - train platforms, Christmas market, cafes etc. - you could argue it is not so disturbing to be constantly engulfed in cigarette smoke. But, when you cannot escape the smoke in your hotel and hotel bedroom then it starts to get a bit annoying.     Smoking is, of course, banned in public places in France. And, there are lots of signs to remind people of this fact – the hotel was full of no smoking signs. Its just that the French appear to complete ignore the law. Indeed, during our visit a report was published by government auditors ( Cours de Comptes) highlighting the seriousness of the problem – 1 in 3...

S tarbucks has been hitting the headlines for all the wrong reasons recently. First up was the news that the company has paid corporation tax only once in 15 years of operating in the U.K. This has seemingly been achieved by making royalty payments, and the like, to parts of the business in lower tax jurisdictions. Customers, taxpayers, and the tabloid media were suitably annoyed. Starbucks’ response was to say that it would ‘voluntarily’ pay £20 million in tax over the next two years. The thought of Starbucks ‘volunteering’ to pay tax seems to have aggravated rather than calmed the situation! On Saturday, tax avoidance campaigners protested outside a number of stores forcing some to temporarily close.     Starbucks is certainly not alone in avoiding tax - Amazon and Google also usually get a mention. And they are certainly not the first company to ‘annoy’ customers on fairness grounds. For example, an accusation even more damaging than that of tax avoidance is one of ...

It is 70 years since the publication of the famous ‘Beveridge Report’. The report set out a revolutionary new model for social insurance that soon led to the instigation of the National Health Service and National Insurance. One of the more interesting ‘anniversary events’ I came across was a program on BBC Radio 4 - ‘The State of Welfare’; it basically assessed social insurance 70 years on from Beveridge. The clear message I got from listening to the program was that the current system fails to deliver a core principle of the Beveridge Report. Beveridge would not have been impressed by all the elements of our current welfare system. So, what went wrong?     The recommendations in the report were based upon three principles. I’ll skip the first two and focus on the third: ‘The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The Sta...