The dollar auction is a non-zero sum sequential game explored by economist Martin Shubik to illustrate how a short-sighted approach to rational choice can lead to decisions that are, in the long-run, irrational. == Play == The setup involves an auctioneer who volunteers to auction off a dollar bill with the following rule: the bill goes to the winner; however, the second-highest bidder also loses the amount that they bid, making them the biggest loser in the auction.
The dollar auction is a non-zero sum sequential game explored by economist Martin Shubik to illustrate how a short-sighted approach to rational choice can lead to decisions that are, in the long-run, irrational. == Play == The setup involves an auctioneer who volunteers to auction off a dollar bill with the following rule: the bill goes to the winner; however, the second-highest bidder also loses the amount that they bid, making them the biggest loser in the auction.
Source: Wikipedia "Dollar auction" · CC BY-SA 4.0
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