Re: [Phys-l] About the "why" and "how" questions.

[brian whatcott <betwys1@sbcglobal.net>]

On 12/24/2010 11:19 AM, Hugh Haskell wrote:
> "Moral Calculations: Game Theory, Logic, and
> Human Frailty" by László Mérö (Springer-Verlag,
> 1998), p. 121

This is a cut of the Springer CiteuLike abstract:

"Here's something to do at your next dinner party after the guests have 
wined and dined, tell them you're auctioning off a dollar--a plain U.S. 
one-dollar bill.   But set the rules as follows: while the winner gets 
the dollar, the second-highest bidder must also pay the amount of his 
last bid, even though he gets nothing. If you can get a single one-cent 
bid, chances are the auction will go to fifty cents.  If someone bids 
fifty-one cents, bidding will almost certainly reach a dollar.  If it 
goes to one dollar and one cent, the sky's the limit.  No one wants to 
be the second-highest bidder.  Afterwards the bidders say they spent so 
much because their opponent "went crazy," which is a little like saying 
"the fight started when he hit me back." Everyone has gotten into 
situations that resembled the dollar auction--where they devoted way too 
much effort to something not worth the commitment, because the cost of 
giving up was worse.  Why do we act this way?  How can we recognize 
these traps before we're in too deep? Is there such a thing as rational 
behavior, and if so, how do we use it to our advantage? Hungarian 
mathematician Laszlo Mero introduces us to the basics of John 
vonNeumann's game theory and shows how it illuminates such aspects of 
human psychology as altruism, competition, and politics. Mero covers 
such concepts as zero-sum games; Prisoner's Dilemma; the game of Chicken 
(played with cars in Rebel Without A Cause),  where logic proves that 
the rational strategy is to be irrational;  how to be kind to your lover 
through game theory; and when the Golden Rule works and when it leads to 
disaster....