Get Your Red-Hot Original Zombie Scripts, Accept No Substitutes
OK in an effort to contain guffawing on the part of some readers, let me explain exactly how I got this idea: I was going to meet with a potential client and I wanted to take a notepad with me. But the first few pages had all kinds of weird stuff scribbled on it, so I began ripping the sheets out to reach a blank page.
Most of it was trash, but then I came upon the actual notes and script that I had written for myself, when Tom Woods and I filmed the masterpiece below.
I hesitated before throwing out the three sheets of paper. I mean, this was the actual script that contained such notables lines as, “Book.” And who could forget the first time hearing, “Neo-confederate!”? Ah, it still makes me chuckle.
On the other hand, it would be reckless for me to “save” this. I can’t currently locate things that were really important to me, like the journal submissions that Paul Samuelson marked up in disgust. (That’s not a joke; I really have those, floating around somewhere.)
The solution was obvious: I would auction the zombie script off, here on Free Advice!
To make this slightly less narcissistic, and slightly more educational, let’s make it a teaching moment on game theory: Rather than do a standard first-price auction, we’ll do a second-price auction. So in the comments, go ahead and throw out your bid. The high bidder wins the script, BUT, you only pay the second-highest bid.
So for example, if Joe bids highest at $1,000, while Mary is second highest at $850, then Joe PayPals me (or sends me a check) for $850 and I mail him the script. (Actual bidding results may vary. Past results are no guarantee of future performance.)
The rationale for this is that, in theory, you should be willing to bid your actual reservation price. I.e. this is supposed to take the strategic element out of it. You bid as much as you’d be willing to pay. If you run through the scenarios, you would never regret having bid your actual cutoff price, and in some scenarios you would be glad that you didn’t bid lower than the actual value. This is why it’s “weakly dominant” to bid your actual reservation price.
(Technically, I’m not sure if that still holds up in an environment like this, where we have sequential bidding. You can prove the above result pretty fast in a model where everyone bids once in secret. But what the heck, let’s give it a go. Maybe I’ll get a joint paper with Vernon Smith out of this, in addition to my $850.)
OK so here are the ground rules:
1) You can bid as many times as you want; that may be half the fun for 4 of you.
2) You are on your honor to not be a jerk to everyone else. Don’t bid unless you are serious; otherwise if you win and then back out, it screws it up for everybody who is being serious.
3) I will mail you the script in the USPS’s Priority mail envelope, so it doesn’t get bent. The pages are not folded. The 2nd page was not a perfect tear out of the pad (the top is a little jagged), but other than that the pages are in good condition. Your bid price includes all s&h.
4) The auction will close on Thursday, September 2, at 12pm EDT. So at that time, we’ll look through the comments on this post and see what the top two bids are, and determine the winner.
5) You can PayPal me or mail me a check. Upon receipt I go to the Post Office.
To make it more interesting you should accept only bids in Gold, payable in GoldMoney.com GoldGrams (or some such).
Why would I do constrain payment options? If someone local buys it, I’ll accept Taco Bell.
What happens if there is only one bidder? Is it free?
Yes.
I bid $10.00. I actually collect financial/economic historical documents.
I don’t have anything like this is my collection.
And now I bid $1 million.
That would be fine if it were 1 second before the close of the auction, but now I could log in with a fake name and bid $999,999, which you would owe me.
So, starting NOW, let’s everyone bid seriously.
So I bid 1 cent.
I bid $15.
I bid $25
I’ve got some lent in my pockets…
What about advent?
I bid $30.
The problem with non-sealed bids is that there is no incentive for someone to place an honest bid between the current highest bid and the second-highest. This is why online auction sites reveal only the second-highest bid during the auction.
For example, right now the high bid is $30. If my honest bid is $28, then I know it’s just a waste of time to place that honest bid, since I can’t win. But my failure to participate could save Robert Wenzel three dollars at the expense of Bob. On the other hand, I could bid $29.99 with no risk to myself, just to make Robert pay Bob an extra $4.99.
At first I thought Robert bid $1 million because he didn’t understand the rules, but maybe he did. A million dollar bid would probably forestall any other bids and Robert would get the script for $10 (absent Bob’s shill bidding).
Well those are good points. We never covered that material in game theory at NYU.
But I still say Wenzel didn’t understand the rules.
(BTW, scout’s honor everyone, I will not fake bid.)
BTW let’s just keep the rules as they are, because I don’t want to reboot the game after it started. But Andy is perfectly right, this setup right now is goofy. You would be afraid to actually say your reservation price (if it’s high), because someone (not even just me) could come in and place it just beneath your bid.
So, presumably this will turn into a first-price bid in practice. But to repeat, the rules will stay as they are, since that’s what people thought when they placed their bids.
Actually, I think the result here will be very much like an “English auction” – which, as you recall, has basically the same outcome as a sealed-bid second price auction.
My thoughts here, if anyone wants to know: http://engelhardtlm1.livejournal.com/298138.html
I bid $35.00
Bob (or anyone else, really), this is sort of on-topic: do you have any book/article recommendations for someone who has a (very) rudimentary understanding of game theory (1 lecture about prisoner’s dilemma and winner’s curse in an MBA course) but would like to learn more about it? Thanks!
Not off the top of my head. But when you get deeper into it, you can connect it with Austrian (Murphyian? since I don’t want to be presumptuous) thinking by looking at this, this, and this.
(I.e. those aren’t really good introductions to game theory. I think you should learn the standard stuff first, then read the above for perspective.)
I’ll just have to rely on amazon.com reviews and a little trial and error to find a good book.
I read the links you provided (I know, I’m supposed to learn the basics first–I’m just not a patient person). My favorite line: “Because at least some of this impact has occurred in purely private settings, this is prima facie evidence that mechanism design theory is actually useful.”
Thanks for the reply and the links.
If you’re one of those who learns well by listening, the Teaching Company has a series of DVD lectures on game theory by Dr. Scott Stevens of James Madison U. It is on sale now. I confess I haven’t watched it yet — still working through the course on chaos theory so I can’t comment — but the reviews are good. It comes with a guidebook with outlines, suggested readings, etc. Sorry I don’t know how to make a pretty link:
http://www.teach12.com/ttcx/coursedesclong2.aspx?cid=1426
That looks promising–thanks for the info.
Bob, how is it that it’s still red hot, but it’s over a Month old. I consider this fraud!!!!
Matt, because it was blue, searing hot when it first came out. In fact, Tom and I had to wait because it was initially plasma. Then once it became a conventional gas, we began filming.
NOTICE to Chris and Wenzel: Speaking of fraud, I want to clarify what these 3 pages are. I realized this morning that actually Tom had typed up the notes from our brainstorming session so that we had identical scripts in front of us during the taping, and also to condense the material (since type is smaller than handwriting).
So what I am auctioning off, are the notes from our brainstorming session. The first page shows what Tom’s general objectives would be for the thing, and then the next two pages are a dialog. It does in fact have my lines “Book,” “neo-confederate,” “slavery,” etc.
When we were done with these notes (Tom taking his and me taking mine on my pad), we said, “That’s it! This will work!” and I went home.
Then, the day of the shooting, Tom had printed up identical scripts for us to have at the table while we did the first few takes.
Thanks for the info.
I bid $40.00
Woops, that was my email name … but I still bid $40.00
Ah a very interesting move by Chris. Are you doing that so that if Wenzel comes back, he now has to pay at least $40 instead of $35? And thus, you hope to stop him in his tracks?
(You don’t have to answer that…)
: )
12:00pm!
OK Chris, you are definitely the winner. But, are you thinking you owe me $35 or $30? Strictly speaking, the second-highest bid is for $35. Did you realize that when you bid $40?
Anyway I’ll email you.
Actually I don’t think I have your email. Why don’t you email me please (rpm@consultingbyrpm.com).
Awesome!
Thomas woods should be in the congress, he is so rational i don’t understand why smart people avoid politics..