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John Galt?

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#15 : June 05, 2007, 11:04:48 AM

That logic would only work if the reward for being lower was more than the payoff for being wrong.  If you got a $100 bonus for being lower then you would want 2.  Since the reward is insignifigant compare to the actual price bid. you would write the highest number possible.  This whole theory assumes that Lucy's only motive is to ''beat'' Pete. It ignores the real motive of both people is to get the most from the airline.  The only other answer would be, if lucy was "honest'' she might write down the actual cost of the item. But who would feel compelled to be honest with an inept airline that broke your stuff?


acacius

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#16 : June 05, 2007, 11:34:19 AM

That logic would only work if the reward for being lower was more than the payoff for being wrong.  If you got a $100 bonus for being lower then you would want 2.  Since the reward is insignifigant compare to the actual price bid. you would write the highest number possible.

Well, the "problem" such as it is, is that the reward is based soley on the lower offer.  If you write down $100 and the other person writes down $2, you get hosed.  By writing down $2 yourself, you avoid the absolute worst-case scenario.  Of course, that assumes that doing "not-bad" is more important than doing "well", which is certainly debateable.  Especially when "not-bad" is two whole dollars.

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This whole theory assumes that Lucy's only motive is to ''beat'' Pete. It ignores the real motive of both people is to get the most from the airline.  The only other answer would be, if lucy was "honest'' she might write down the actual cost of the item. But who would feel compelled to be honest with an inept airline that broke your stuff?

Well, yeah.  That is, of course, the REAL problem.  In a real-world situation, trying to make an honest assessment of the item's value would be the actual reasonable thing to do.

dalbuc

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#17 : June 05, 2007, 12:03:21 PM

That logic would only work if the reward for being lower was more than the payoff for being wrong.  If you got a $100 bonus for being lower then you would want 2.  Since the reward is insignifigant compare to the actual price bid. you would write the highest number possible.  This whole theory assumes that Lucy's only motive is to ''beat'' Pete. It ignores the real motive of both people is to get the most from the airline.

Which is why I disagree with the analysis. The risk/reward is skewed badly. Yes, if I put 100 and the other cat does 2 I get hosed but so does he - unless the item is only worth $4 or less. In fact, the penalty for the "higher" bid is fairly insubstantial. You might change that by having a $20 plus minus but the $2 edge doesn't seem to affect the game.

All posts are opinions in case you are too stupid to figure that out on your own without me saying it over and over.
If you think Manziel is the best QB in this draft I can safely assume you are an idiot and will treat you as such.

John Galt?

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#18 : June 05, 2007, 06:00:31 PM

I recall a similar "game" used to apply game theory to negotiating.  The premise was 2 people write down a number 1-99, if they both get the same number, they get that $ amount, otherwise, the low bidder gets their bid x2 and the high bid gets 0.  Most of the winning #s were in the 40s, with 43 being the most frequent. 

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