Game 5 all-pay acution of $10, Game Theory

GAME 5 All-Pay Acution of $10


Everyone plays. Show the students a $10 bill, and announce that it is the prize; the known value of the prize guarantees that there is no winer’s curse. Hand out cards. Ask each student to write his name and a bid (in whole quarters). Collect the cards. The highest positive bid wins $10; if two or more tie with the highest positive bids, they share the $10 equally.


All players pay the instructor what they bid, win or lose. Be sure to emphasize before bids are submitted that “This is for real money; you must pay your bid in cash on the spot. You can make sure of not losing money by writing $0.00. But of course if almost everyone does that, then someone can win with $0.25 and walk away with a tidy profit of $9.75.”


Once you have collected the cards, write the distributionof bids on the board. Hold a brief discussion about the distribution and the value of the optimal bid. This game usually leads to gross overbidding; a profit of $50 in a class or section of 20 is not uncommon. If that happens, you will have to find ways of returning the profit to the class; we have done this by having a party if the sum is large enough or by bringing cookies to the next meeting if the sum is small. Of course, do not announce this plan in advance.. If you play the game on the first day, you can lead up to at least some of the points made there, even though the analysis at this early stage cannot go anywhere close to that level. If you prefer to follow this game with a more in-depth discussion and, perhaps, the derivation of the formula for the optimal bid.

Posted Date: 9/27/2012 1:07:02 AM | Location : United States







Related Discussions:- Game 5 all-pay acution of $10, Assignment Help, Ask Question on Game 5 all-pay acution of $10, Get Answer, Expert's Help, Game 5 all-pay acution of $10 Discussions

Write discussion on Game 5 all-pay acution of $10
Your posts are moderated
Related Questions
Rules of Snake Eyes (small variation on game called Craps in USA) Player rolls two dice. On the first roll if the total of the dice is 2 (snake eyes): player wins and rece

Take a news story, old or recent, and analyze it from a game theoretic perspective. Provide a hard copy of the source of your news story and consult relevant game theoretic literat

The most basic version of a LIV allows the executive office holder (Governor or President) to accept part of a bill passed by the legislature (so that part becomes law) and to veto

A heuristic is an aid to learning, casually brought up as a rule of thumb. Formally, a heuristic may be a mechanism capable of altering its internal model of the surroundings in re

(a) Equilibrium payoffs are (1, 0). Player A’s equilibrium strategy is S; B’s equilibrium strategy is “t if N.”   For (a): Player A has two strategies: (1) N or (2) S. P

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

Stanley is auctioning an item that he values at zero. Betty and Billy, the two potential buyers, each have independent private values which are drawn from a uniform distribution, P

About assignment The goal of this assignment is for the student to propose a new game of your own and to be able to present their ideas in clear and convincing manner. This pro

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 Dominant Strat

Discussion in the preceding section suggests that if we want to measure a given hnction belonging to a simultaneous-equations model, the hnction must be fairly stable over the samp