The $20 Question
August 17, 2008 at 12:43 am | Posted in General | 2 CommentsTags: Game theory
Page 2 of this article presents a really interesting question. Here’s the scenario:
You’re at an auction where the prize is a $20 bill (it would never happen, I know). The winner gets the $20 bill in return, but there’s a catch. The second place bidder still has to pay what he or she bid. So, being second is the worst, first is the best, unless the bid goes over $20.
It’s amazing that people bid as high as $204. That aside, I wonder about two things. First, in what real life scenario would being second place be worse than being third, or fourth, or fifth, etc? Second, if one knew the rules of the game beforehand, why even enter the auction?
In other news, congrats to Michael Phelps! These Olympics are making me more patriotic than ever.
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