Game Changer - the game theory podcast

Europe's energy crisis has exposed deep structural flaws in how electricity markets work. But according to economist Natalia Fabra, much of the current debate is focused on the wrong problem. In this episode, we unpack why high prices are not simply a result of market design choices like uniform pricing – and why the real issue runs deeper. From the role of gas in price formation to the fundamental mismatch between short-term markets and long-term investment needs, this conversation reframes how we should think about the energy transition. Natalia Fabra is Professor of Economics at the CEMFI Madrid and one of Europe's leading experts on energy markets and regulation. Her research focuses on market design, competition, and the transition to low-carbon energy systems.

In this episode, we explore how game theory and economics can inform the use of AI. Our guest, Annie Liang, introduces the concept of AI clones, systems designed to imitate specific humans, and discusses their potential applications, for example in recruiting. We examine the trade-off between the efficiency gains the clones can provide and the costs that arise when AI cannot perfectly create such clones without error. The conversation then turns to creative ownership, focusing not only on content but also on the ownership of creative style as AI becomes increasingly capable of reproducing it. Finally, we discuss how insights from information design can contribute to the broader debate on AI. Annie Liang is an associate professor of economics and (by courtesy) of computer science at Northwestern University.

Can we trust lab experiments to predict real-world behaviour? In this episode, we explore the question of external validity together with Jan Stoop. From classic dictator games in the lab to misdelivered envelopes with real cash in private homes, we discuss whether people act differently when they are being observed - and what happens when established lab findings meet reality. We also talk about rich versus poor behaviour, financial stress, and why small "hassle costs" can create large inequalities in outcomes. Jan Stoop is Associate Professor at Tilburg University and Erasmus University Rotterdam. His research focuses on behavioural and experimental economics, with a particular emphasis on pro-social and unethical behaviour, financial stress, and inequality. He is known for creative field experiments that rigorously test whether laboratory results hold in real-world settings.

Jobst Heitzig, mathematician at the Potsdam Institute and AI safety designer, studies risks from optimisation and decision design. He discusses how perfect goals are impossible, how over-optimisation creates harms like harmful recommendations or infrastructure failures, and why satisficing, safe exploration and game-theoretic thinking matter for human-AI interaction.

Adam Meirowitz, Damon Wells Professor of Political Science at Yale who studies game-theoretic electoral competition. He discusses why classic candidate convergence can fail. He explains echo chambers and selective exposure. He shows surprising reasons these can lead to moderation, how bounded rationality can amplify polarization, and why strategic uncertainty can produce occasional extreme platforms.

Talk is cheap – literally. But if words cost nothing, why do we ever trust them? In this episode, Yale Professor Navin Kartik breaks down the game theory of communication. We kick things off with the basics: what is the academic definition of "cheap talk", and why does cheap talk sometimes work but other times break down? From there, we transition to Navin's own research, which explores deeper facets of communication. We learn about lying costs and "inflated language": why does a reference letter need to say "excellent" to just mean "competent"? Finally, we dive into topics like pandering (why experts lie to agree with you) and muddled information (why test scores tell you more about gaming skills than natural ability).

Itzhak Gilboa, a Professor of Economics and Decision Sciences at HEC Paris, dives deep into decision theory and its complexities. He discusses how everyday choices, from using navigation apps to major life decisions, are influenced by different decision models. Gilboa critiques the standard Bayesian approach, arguing that rationality is not always defined by it. He explores the challenges of quantifying uncertainty, using climate forecasting as a case study. Alternative frameworks are proposed for dealing with ambiguity, emphasizing the practical role of decision theory in minimizing errors.

In this episode, we explore how game theory and network effects intersect to inform optimal incentive structures in organizations. Pau Milán walks us through his recent research, co-authored with Nicolás Oviedo-Davila and Marc Claveria, which uses a novel game-theoretic model to show how the productivity of one employee can amplify the output of others in their network—and how firms can leverage this to design smarter compensation schemes. Drawing on real-world examples and his theoretical work, Pau offers practical insights for employers and economists alike. Pau Milán is an Associate Professor of Economics at Universitat Autònoma de Barcelona (UAB) and an Affiliated Professor at the Barcelona School of Economics (BSE). His research interests include Social and Economic Networks, Information Economics, Development Economics, Organisations, and Applied Game Theory. You can find the working paper "Incentive Contracts and Peer Effects in the Workplace" here.

In this episode we explore the most classical topic from Game Theory – equilibrium analysis. Our guest Colin Camerer shares insights on the game LUPI ('lowest unique positive integer'). We first discuss the actual mathematical equilibrium analysis and then dive into real life: results from a Swedish game show in which the game was played in a lottery format. Colin also compares the results from the game show with a study of the same game in a controlled lab environment. We finish the episode by deep-diving into level-k reasoning and Colin shares an example based on the role of published movie reviews. Colin Camerer is the Robert Kirby Professor of Behavioral Economics at Caltech. His research interests include decisions, games, and markets.

Matthew Jackson, the William D. Eberle Professor of Economics at Stanford, dives into the fascinating realm of networks and game theory. He discusses how personal connections influence job opportunities and market dynamics. The power of networks is explored through intriguing examples like the Medici family's rise in Florence and how tariffs can increase geopolitical risks by disrupting trade. He highlights that weak ties often play a crucial role in job searches, revealing the complexity of trust and cooperation in economic systems.