Are It True?
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Joined: Jul 2003
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From: Atlanta
I have a more interesting risk-reward situtaion.
Suppose you told a room of people that you were going to auction off a twenty dollar bill. The only stipulation is that if you give the second highest bid, i.e. the first loser, then you have to pay the auctioneer for the amount that you bid. Start taking the bids at one dollar. Eventually someone will take the bait. Next, jealousy will keep that person from getting $20 for $1 and the game is on. Both are willing to bid up to the $20 dollar mark becuase they are getting more than they are paying for, however, once the $20 mark has been eclipsed by the bidding, where does it end? Suppose the bid goes up to $21. One party will not want to pay $20 to lose when they could be paying $2 if they won ($22-$20=$2) The real question is, when does it end?
Suppose you told a room of people that you were going to auction off a twenty dollar bill. The only stipulation is that if you give the second highest bid, i.e. the first loser, then you have to pay the auctioneer for the amount that you bid. Start taking the bids at one dollar. Eventually someone will take the bait. Next, jealousy will keep that person from getting $20 for $1 and the game is on. Both are willing to bid up to the $20 dollar mark becuase they are getting more than they are paying for, however, once the $20 mark has been eclipsed by the bidding, where does it end? Suppose the bid goes up to $21. One party will not want to pay $20 to lose when they could be paying $2 if they won ($22-$20=$2) The real question is, when does it end?
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Joined: May 2003
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From: Vegas baby!!
So lemme get this straight tho--
Two people end up having to pay the auctioneer right? The person who has the highest bid, and the person with the second highest bid, but only one person wins the $20 right?
If that is the case, then really, it makes no sense to play. Because the "winner" is really the one who gets to pay $20 less than the "loser" but nobody wants to be the "loser" so the price keeps escalating until they're both losers...
Correction: the only winning move is for all the bidders to collude against the auctioneer. Only 1 person bids, and they all agree to split the proceeds.
Two people end up having to pay the auctioneer right? The person who has the highest bid, and the person with the second highest bid, but only one person wins the $20 right?
If that is the case, then really, it makes no sense to play. Because the "winner" is really the one who gets to pay $20 less than the "loser" but nobody wants to be the "loser" so the price keeps escalating until they're both losers...
Correction: the only winning move is for all the bidders to collude against the auctioneer. Only 1 person bids, and they all agree to split the proceeds.
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Joined: Aug 2002
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From: 49th Parallel
Well, without all the "what if's" and stuff, I think he's asking, given that scenario, when will it end? I don't really understand the last part of the question, why would they both continue the bidding after it has reached $20?
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Joined: May 2003
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From: Vegas baby!!
[QUOTE]Originally posted by magician
Here's an interesting situation:
There are two identical envelopes, one containing twice as much money as the other; you get to keep the contents of one.
Here's an interesting situation:
There are two identical envelopes, one containing twice as much money as the other; you get to keep the contents of one.
