From: John Conover <john@email.johncon.com>
Subject: Re: Need- Conflict Exercise LO5173
Date: Sun, 28 Jan 1996 20:54:26 -0800
NEANY@aol.com writes:
> Replying to LO5098 --
>
> Exercise? I'm on the road right now and not in my office to look through
> my "stuff", but two that I use are: Cross that Line and Arm wrestling
>
> Both have origins in our Conflict resolution and Win/Win training.
>
Wana make a conflict, play the following game. It is called Shubik's
Dollar Auction, and is an instructive game-theoretic parlor game. It
goes like this.
1) As in any other auction, the dollar bill goes to the
highest bidder, who pays whatever the high bid was. Each new
bid has to be higher than the current high bid, and the game
ends when there is no new bid within a specified time limit.
2) Unlike other auctions, the second-highest bidder also has
to pay the amount of his/her last bid, and gets nothing in
return.
A large crowd is desirable, according to Shubik. The idea is that no
matter what the state of the bidding, the second-highest bidder can
improve his/her position by bidding, and the game escalates, and is
very similar, at least in illustrative principle, to arms races, etc.
(Note that escalation-I've auctioned a dollar for 20 bucks before-is
completely rational-it would be irrational not to bid if you were the
second-highest bidder.)
There is a very good non-technical book, which I highly recommend for
managers, executives, social administrators, and organizational
theoreticians:
"Prisoner's Dilemma", William Poundstone, Doubleday, New York, New
York, 1992, ISBN 0-385-41567-2.
which goes into some detail on game-theoretic social enigmas. Shubik's
dollar auction is described on pp. 260.
John
BTW, you have to keep control of the game-it can become quite
heated. There are instances where married couples have left a party in
different cars.
--
John Conover, john@email.johncon.com, http://www.johncon.com/