I have a one dollar bill. there is a crowd of people around me. I hold it up and say that i will auction the one dollar bill off, and the dollar would go to the highest bidder.
The catch? the first AND second highest bidder both have to pay me whatever they bid. For example, if the bidding stops when someone bids 1.00 and the next person bids .95, then I get 1.95, and the winner gets nothing, the second person loses 95 cents.
What would you do if you were at this auction, and there had to be at least one bid? What is the "winning" strategy, assuming that everyone will want to do what is best for them?
(In reply to
Dollars and Sense by Sanjay)
Great!
Have you considered an opening bid of 99 cents (I feel like a salesman)?
Would you bid $1.00 against an initial bid of 99 cents?
Thus, I challenge all fans of this problem:
I hereby bid 99 cents for that dollar. If anyone would like to bid against me (by say, bidding $1.00) please explain the logic in doing so.
I'm waiting...
re: Dollars and Sense
