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MBlume comments on Game Theory As A Dark Art - Less Wrong
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Note that I actually attempted to run a dollar auction at Benton and wound up selling my $20 for $1 to the first bidder. If memory serves, either the people in the room drew lots for the right to bid, or the bidder agreed to share profits with the others.
I once bought a Euro for 99 Cents, being the first bidder, noone else had anything to gain by bidding more.
I'd bet that on average that play loses, because you need a 99% success rate, and people will do random crazy things more often than that given how many people have the opportunity...
Indeed. I thought about this as well when I wrote the comment (not so much when I actually played), but decided not to write that down. That considered, I was very surprised about the +6 karma for the grandparent and the fact that nobody had brought this up yet. Well done!
This kind of bet is the reason why especially evil game masters play the game with the slight variation that bets can only happen in small increments, similar to an English auction where the auctioneer puts forth a price and asks if any one person is willing to pay that price, and, if it's more than one person, raises the price.
Upvoted for trying to do it in real life.
It's nice to see coordination between homo-sapiens beating homo-economicus.
Not exactly. If there was a homo-economicus there he would have kicked their ass.
And if there were two homo-economicii there, they would have each given MBlume infinity dollars until one of them ran out of cash.
There's a reason humans evolved not to fall into those traps.
Edit: Whoops, brain farted that one. Homo economucii would play a mixed strategy, with a NE of $0 dollars expected gain. Cooperating humans play a strategy where they win $19 every time.
What? No they wouldn't. Giving MBlume infinity dollars is not a Nash equilibrium.
It isn't? Darn =(
I don't see how any one player can do better in a world where MBlume gets infinity dollars.
Even after inflation?
It's not CDT-rational to bid one dollar for 20 dollars if there is a high probability that others will be bidding as well, because you are unlikely to actually make that $19 profit. You are likely to actually get $0 for your $1. And if you know in advance that you would make the decision to pour more money in when you are being outbid, then the expected utility of bidding $1 is even lower, because you will be paying even more for nothing.
Indeed I consider that the winning move would be to blackmail the person starting the auction for a small percentage of his winnings, (else you expain to everyone present why he'll get those winnings).
Yes, it's just almost nothing to do with this kind of consideration.
Now I feel proud of having lived with the awesome folks at Benton.
...just spent a few minutes using Google Streetview to virtually walk from the nearby park back to Benton house. It's great to be home, but I do miss that place sometimes. :-)
I bought a fake but passable 100 USD bill from a North Korean human for 70 real USD, but I'm not sure if that has relevance here.