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Seinfeld Economics: The Pilot

by Linda Ghent

Game theory attempts to mathematically capture behavior in strategic situations, or games, in which an individual's success in making choices depends on the choices of others. Game theory has been used to study a wide variety of human and animal behaviors. It was initially developed in economics to understand a large collection of economic behaviors, including behaviors of firms, markets, and consumers. The use of game theory in the social sciences has expanded, and game theory has been applied to political, sociological, and psychological behaviors as well.

Signaling is the idea that one party (termed the “agent”) credibly conveys some information about itself to another party (the “principal”). For example, in job-market signaling, (potential) employees send a signal about their ability level to the employer by acquiring certain education credentials. The informational value of the credential comes from the fact that the employer assumes it is positively correlated with having greater ability.

 

Seinfeld: The Pilot

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Girl calls Jerry and tells him, “I have to be in town for a conference, but I can't find a decent hotel room in Manhattan.” George and Kramer say that these are signals. The girl arrives, and sends many additional signals (at least Jerry thinks she does), but ultimately tells Jerry that she's engaged. What Jerry needs is a screening device.

from Seinfeld, Season 1 (1990)
Creator: Larry David & Jerry Seinfeld
Posted by Linda Ghent
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