Wednesday, January 5, 2011

Cheap Talk does an entanglement analysis

Here, he is modeling the entanglement between airline ticket sellers and ticket buyers using a new auction machine.

One thing he has to include is the Gibbs analysis, how many new buyers will enter the airport to trade on the new machine.  If the ticket auction machine is on one side of the TSA entry process vs the other side, then we get an appreciably different Gibbs separation.  The key variable is how many pure ticket traders can reach the machine without crowding out.

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