Game 4 auctioning a penny jar (winner’s curse), Game Theory

GAME 4 Auctioning a Penny Jar (Winner’s Curse)


Show a jar of pennies; pass it around so each student can have a closer look and form an estimate of the contents. Show the students a stack of 100 pennies to give them a better idea of what the jar might contain. While the jar is going around,explain the rules. Everyone submits a “sealed bid”; hand out blank cards and ask the students to write their names and bids and return the cards. (This is also a good way for you to get to remember their names during the first meeting of the class or the section.) The winner will pay his bid and get money (paper and silver, not pennies) equal to that in the jar.Ties for a positive top bid split both prize and payment equally. When you explain the rules, emphasize that the winner must pay his bid on the spot in cash.After you have collected and sorted the cards, write the whole distribution of bids on the board. Our experience is that if the jar contains approximately $5, the bids average to $3.50 (including a few zeros). Thus the estimates are on the average conservative. But the winner usually bids about $6. Hold a brief discussion with the goal of getting across the idea of the winner’s curse.

The emphasis of this game is a concept relating to auctions is a simple enough game to play early in the semester if you want to increase interest in the topics or hook additional students. One could certainly save this game until ready to cover auctions.

Posted Date: 9/27/2012 1:04:35 AM | Location : United States







Related Discussions:- Game 4 auctioning a penny jar (winner’s curse), Assignment Help, Ask Question on Game 4 auctioning a penny jar (winner’s curse), Get Answer, Expert's Help, Game 4 auctioning a penny jar (winner’s curse) Discussions

Write discussion on Game 4 auctioning a penny jar (winner’s curse)
Your posts are moderated
Related Questions
You and an opponent are seated at a table, and on the table is a square board. At each of the four corners of the board, there is a disc, each one red on one side and black on the

Write a bouncing ball video game. The game is similar to the one described and depicted in The balls bounce within the screen where the two horizontal walls are fixed. The two v

The following is a payoff matrix for a non-cooperative simultaneous move game between 2 players. The payoffs are in the order (Player 1; Player 2): What is the Nash Equilibri

what will be the best strategy for a bidder in an auction comprised of four bidders?

A collection of colluding bidders. Ring members comply with rig bids by agreeing to not bid against one another, either by avoiding the auction or by putting phony (phantom) bids

What do you study about the saving, investment spending and financial system? Savings, Investment Spending, and the Financial System: 1. The correlation between savings and

A type of sequential second worth auction, just like an English auction during which an auctioneer frequently raises the present worth. Participants should signal at each worth lev

Equilibrium payoffs are (2, 3, 2). Player A’s equilib- rium strategy is “N and then N if b follows N or N if d follows N” or “Always N.” Player B’s equilibrium strategy is “b if N


One charm of evolutionary game theory is that it permits for relaxation of the normal fully-informed rational actor assumption. People, or agents, are assumed to be myopic, within