5 Pound Auction Game and Introduction to the class
In today’s class I auctioned a five pound note and discussed how the class works.
You can find the recording of the class here.
After getting the School’s attendance QR code thing to work (please get in touch if you have any trouble!) I auctioned a five pound note with the following caveat:
The top two bids would have to pay.
Frank and Tom immediately and almost simultaneously (this is important, more about that later) bid:
- Frank bid £0.10;
- Tom bid £4.90 (I actually changed his first bid which was £4.99).
This was followed by Sam bidding £5.00.
At this point Tom is trapped:
- If Tom bids he would pay £5.10 for £5.00 “making”: “-£0.10”
- If Tom does not bid he would pay £4.90 for nothing “making”: “-£4.90”
So Tom should bid (which he did).
Sam is of course in a similar trap where the sunken cost of his first bid implies that he should keep bidding.
I stopped this and told Sam and Tom to split the money (apparently Sam is yet to get his due!) but the point I wanted to make here is what Game Theory tries to do which is to understand the emergent outcomes when individuals do what is best for themselves.
Here is the picture I took of the board:
At the end of class Tom, Felix and I had a chat and Tom explained that he had actually intended to bid £4.99 first. This explains his (awesome) enthusiasm. If he hadn’t bid at the same time as someone else and had indeed managed to be the sole bidder at the highest possible price then it would have probably been somewhat obvious that no one else should enter the trap. This is the first time someone has done that, next year I’ll probably set a lowest starting bid.
Class Structure, Delivery and Assessment.
After all that we spent some time talking about the class itself.
We spoke about the general structure of the class and you can find that information here: https://vknight.org/gt/topics/about-the-course.html.
ACTION REQUIRED:
If you do not have a group by the end of Saturday the 11 of September I will create a group for you.
Add your group members to a group on learning central. I believe it’s easy to find and do but let me know if you cannot find it and/or if I have not set things up right.
In class I said the assessment was 80% exam: I was wrong the exam is actually 75%. Apologies for this and thanks to the student who came up to me to double check consistency with what SIMS was saying.