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Xachariah 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.
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.