NationStates Jolt Archive

Here is the scenario:

Lucy and Pete, returning from a remote Pacific island, find that the airline has damaged the identical antiques that each had purchased. An airline manager says that he is happy to compensate them but is handicapped by being clueless about the value of these strange objects. Simply asking the travelers for the price is hopeless, he figures, for they will inflate it.

Instead he devises a more complicated scheme. He asks each of them to write down the price of the antique as any dollar integer between 2 and 100 without conferring together. If both write the same number, he will take that to be the true price, and he will pay each of them that amount. But if they write different numbers, he will assume that the lower one is the actual price and that the person writing the higher number is cheating. In that case, he will pay both of them the lower number along with a bonus and a penalty--the person who wrote the lower number will get $2 more as a reward for honesty and the one who wrote the higher number will get $2 less as a punishment. For instance, if Lucy writes 46 and Pete writes 100, Lucy will get $48 and Pete will get $44.

What numbers will Lucy and Pete write? What number would you write?
http://www.sciam.com/article.cfm?chanID=sa006&articleID=
7750A576-E7F2-99DF-3824E0B1C2540D47&pageNumber=1&catID=2

My first thought was to pick 100, because that way if the other person picks 100 too, we both get the most money! However, the article says that the most logical answer is to pick 2, because you would be always undercutting the other person to get your 2 dollars. Its a bit confusing, but the article has a good analysis.

So, what was your first though on the amount of money you would pick?

I'd take a gamble and say 99. Then I'd smirk at you for picking 100.

Both should pick 100. That way they both get $100.

If one person picks 2, they only get $4, and the other person gets nothing. Assuming the objective is to get the most money, rather than make the other person get as little as possible, that's not a good course of action.

'Course, you could just right down the correct amount, but that's not the game.

Edit: DM's solution is actually quite good, too ;)

Here is the scenario:


http://www.sciam.com/article.cfm?chanID=sa006&articleID=
7750A576-E7F2-99DF-3824E0B1C2540D47&pageNumber=1&catID=2

My first thought was to pick 100, because that way if the other person picks 100 too, we both get the most money! However, the article says that the most logical answer is to pick 2, because you would be always undercutting the other person to get your 2 dollars. Its a bit confusing, but the article has a good analysis.

So, what was your first though on the amount of money you would pick?

Much like most economic models, the "logic" behind picking 2 is idiotic. Sure, if you keep following the same line of logic over and over and over and over again, you'll eventually go to 2. But taking those steps is only logical if you ignore everything else involved in the problem - like the actual cost of the item. Neither person is likely to go below the actual cost of the item. Another issue would be the fact that, rather than following an inane logical process that would ignore the way humans are actually most likely to act, both participants would look for a number that the other might actually put down, and stop at that point. 2 is so unlikely as to be pretty much useless.

This is a variant on the results of Game Theory, and is one of the reasons that I so despise modern theory of economics.

The empathetic approach in the single case is to say "It is not to my advantage to deprive the other person of his gain", noting that "If we both think like that, then we will maximise our collective gain by maximising our bids". Thus, I bid $100, without regret.

I'd show the airline manager a receipt, eliminating the need for this crazy game. If I didn't have one I'd tell him where I bought the antique and ask him to contact the people there and get them to confirm the price I paid for the antique. Failing that I'd suggest we find an antiques expert who can establish what the antiques were worth.


I might also mention that $100 is a retarded amount to offer in compensation for something that could be termed priceless.

This is a variant on the results of Game Theory, and is one of the reasons that I so despise modern theory of economics.

The empathetic approach in the single case is to say "It is not to my advantage to deprive the other person of his gain", noting that "If we both think like that, then we will maximise our collective gain by maximising our bids". Thus, I bid $100, without regret.

I win against you, too! Ha! I'm rich!

$100 for an antique :confused:

dammit I'd say that the items where priceless artifacts of the Lapita and threaten to sue the company for everything its worth unless they give me free flights for life!

I'd take as an axiom the fact that anybody I'm travelling with would be equally as cynical, devious, self-serving and intelligent as me, and go for 100.

I win against you, too! Ha! I'm rich!
But you've reduced our collective gain. It would be better for both of us to choose $100 and then for you to contract me to pay you the extra $1 gain you would make (since I would thus gain $99 rather than the $97 I would make if you voted $99).

But you've reduced our collective gain. It would be better for both of us to choose $100 and then for you to contract me to pay you the extra $1 gain you would make (since I would thus gain $99 rather than the $97 I would make if you voted $99).

http://www.youtube.com/watch?v=UulXJzKzYGY

lol

for a second I thought you were talking about this (http://www.travellersdiarrhea.com/Home/home.html)....then I found out you said Dillema

I'd go with $100. If we both choose 100 (and I expect most people to choose that) then we both get $100. True, if the other person chooses 99, he gets an extra dollar, but what matters a dollar? I mean, really, the way I see it, the friend you are likely to make (especially if the value of the object is under $100) has the possibility to be much more profitable than a damned dollar.

But since the most obvious (And greediest) answer is 100 wouldn't it be likely that both would pick 100 making that the best answer?

But since the most obvious (And greediest) answer is 100 wouldn't it be likely that both would pick 100 making that the best answer?

Yes. Yes. That is the one you should pick.


Give me a dollar.

Here is the scenario:


http://www.sciam.com/article.cfm?chanID=sa006&articleID=
7750A576-E7F2-99DF-3824E0B1C2540D47&pageNumber=1&catID=2

My first thought was to pick 100, because that way if the other person picks 100 too, we both get the most money! However, the article says that the most logical answer is to pick 2, because you would be always undercutting the other person to get your 2 dollars. Its a bit confusing, but the article has a good analysis.

So, what was your first though on the amount of money you would pick?

I would write down the exact dollar amount of the antique. and I will produce the reciept to show it. then I would also add in the price of the ticket since that too was factored in. (obviously, I'd need to purchase another round trip ticket to get another antique)

and if the company refuses to pay, I'd then put in the number of our lawyer...

I'd show the airline manager a receipt, eliminating the need for this crazy game. If I didn't have one I'd tell him where I bought the antique and ask him to contact the people there and get them to confirm the price I paid for the antique. Failing that I'd suggest we find an antiques expert who can establish what the antiques were worth.


I might also mention that $100 is a retarded amount to offer in compensation for something that could be termed priceless.

Roflpwnt.

Assuming the item costs less than $100- I would go with $2 below the actual cost of the item. If the other person is greedy..it would be their fault.

I would also assume that no greedy person would be stupid enough to put down a number BELOW what they could get for the actual cost they paid for it.

And if we both put down $2 below the actual cost..well..it's only $2. And we get equal amounts.

So, basically, if you pick 100, you will be entitled to at least $98 dollars, whereas if you pick 2, you can get no more than $4 dollars. I would write down the correct price of the item, however, because honesty transcends monetary rewards.

So, basically, if you pick 100, you will be entitled to at least $98 dollars, whereas if you pick 2, you can get no more than $4 dollars. I would write down the correct price of the item, however, because honesty transcends monetary rewards.

I have a hard time figuring out if I would get a dollar from your explanation. Troubling...

Here is the scenario:


http://www.sciam.com/article.cfm?chanID=sa006&articleID=
7750A576-E7F2-99DF-3824E0B1C2540D47&pageNumber=1&catID=2

My first thought was to pick 100, because that way if the other person picks 100 too, we both get the most money! However, the article says that the most logical answer is to pick 2, because you would be always undercutting the other person to get your 2 dollars. Its a bit confusing, but the article has a good analysis.

So, what was your first though on the amount of money you would pick?

I'd pick the cost of the item + 2 dollars. In the worst case I get paid back exactly the cost of the item. And in the best case I'd get the cost of the item and 4 dollars back :)