game theory of the day is traveler’s dilemma. two people are traveling and the airline lost their suitcases. both suitcases are exactly the same and have a value of $100. the airline guy says they can claim a value on their suitcase from between $2 to $100. if they both say the same amount of money, then they will get the money. if they say different values, then the airline will take the lower value and give the person that lower value + $2. and the person that claimed the higher value will get the lower value – $2. so they can both claim $100 and get $100 each, or one can claim $99 and get $101, while the other guy gets $97. according to the nash equilibrium, the “rational” way is to keep selecting a dollar lower and eventually they end up at $2. which is ridiculous. in practice, people will usually place a much higher value, so either people are irrational (which i don’t doubt) or everyone thinks “superrationally,” which would cause them to rationally make irrational decisions, which really doesn’t make any sense. again, competition brings everyone down to the bottom.
since this one was short, there was another game called “guess 2/3 of the average.” in this game, a bunch of people sit around and guess a number between 1-100 that will be 2/3 of the average of the numbers that everyone says. so since it has to be 2/3, the largest average will be 100, that means the answer cant be 66.666666 or above. so if everyone thinks the same way, then it can’t be 2/3 of 66.6666666, so everything above 44.444444 is killed. and repeat, until the closest number is 0. oh, so sad. i guess this game depends on rational players. most people aren’t. so not zero. i don’t know any lessons to be learned from this one, except to play games where you don’t guess fractions of averages. just guess the average. that makes more sense.