Ming the Mechanic:
How much will you give me for my $20 bill

The NewsLog of Flemming Funch
 How much will you give me for my $20 bill2005-04-13 23:06
12 comments
picture by Flemming Funch

Various experiments have been done to try to figure out how people value things and make decisions. Psychologist Max Bazerman says that during the past ten years he has earned more than $17,000 by auctioning $20 bills to his MBA students at Northwestern University. In the course of almost two hundred of his actions, the top two bids never totaled less than $39, and in one instance totaled $407.

Now, that's when it is very clear what you get for your money. A 20 dollar bill. Logic should dictate that no reasonable person would bid more than $20 for what obviously is a $20 value. But all sorts of other factors might enter into the calculation. The fun and excitement of the bidding, the prestige of being the winner, the expectation that there might be some kind of valuable hidden bonus, etc.

A similar, but somewhat more complex type of auction would be if you're not entirely sure of the value you're betting on. If, say, it is a glass jar full of coins, which you aren't allowed to count. If people make blind bids written down on paper, the average bid will tend to be less than the actual value, as most people are trying to avoid the obvious risk. But some people will over-estimate the actual value, so the winner of the auction would typically be somebody who ends up paying more than the actual value.

And then there's the particularly sneaky variant, the Entrapment Gam. Let's say that everybody who bids in an auction must pay the amount of their bid, whether they win or not, but you're allowed to continue over-bidding each other. People will start really low, like 0.50, as most people feel they can waste that. Bidding continues up to around $10 and pauses. Then the people who've bid $8 or $9 must decide whether they'll lose that or they'll continue. It will continue up to $20 when again there's reason for pause. One might realize that one now is likely to lose quite a bit. So maybe if one throws in a few extra dollars and wins, one will lose less, so it might be worth it. And it might go on quite a bit like that, as at each step one must evaluate whether one might avoid a loss by paying a bit more. Even if one ends up paying a lot more for the 20 dollar bill than it was worth. This was apparently the game Mr.Bazerman played with his students.

There might be surprisingly many situations in life that are similar to that scenario. Competitive sports, the making of business deals, buying a house, etc. You might have invested a certain amount of time and effort and money, and even if you know you won't get back the equivalent, you might think that just a little more would get you what you're going for and minimize the losses.

More here or here.


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12 comments

14 Apr 2005 @ 04:01 by DRT @209.239.38.55 : How Much Will You Pay for My $20?
[trackback]:  


14 Apr 2005 @ 04:56 by Joel @68.4.187.230 : Twenty Dollars
This explains a lot....I wonder if the same people would bid low for a hundred dollar bill?  


14 Apr 2005 @ 17:57 by How Not To Blog ★ @66.225.199.250 : Experimental Auction System - "Winner Ta
[trackback]: Ming has another interesting post, this time about psychologist Max Bazerman's experiments with his students and a bit of money.

And then there's the particularly sneaky variant, the Entrapment Gam. Let's say that everybody who bids in an auction mu...  



30 May 2005 @ 21:22 by Kamila @68.202.34.112 : Jesus!!!
Hah!!!.. i love americans.....

..im absolutely abashed and disturbed.  



23 Nov 2005 @ 23:02 by jonah @203.206.115.209 : the root of all sol u tion
i own many 2 dollar notes if you posses a star note i would payioo us for one by say coombs/wilson that is for a brand new one a really worn out one i wouldbe stealing of you if i gave you lerss than10 dollars..but if you gave me the 2 dollarcooms/randall with the star diget iwould gladly pay double
money is a promise of sovereign right thev only true money is coinage,,specifically gold ,silver but now lesser material
before we had dollars(this is in van die mens land ..austrailia)we had money till 1966 whose notes had the worth of the commonwealth paid on demand in silver
well people like nites ,ever carried 5 ,10 .or 100 pounds of silver .remember the us silver dollar,we had the aust 50 cent peace it was round it was silver ..the govt used 50 percent of the unstolen silver just to shut up those like mre to make them after money lost ist silver coinage .i can even to day get ono pound of coin but it is not based on silver ,its nickle it makes us sic and if you lovr plastic its fumes are feminising you..gold and silver are heathy metals prolong life and heal we lost the copper just as aids broke out it was supposedly caused by vacination of hep b done upon humans using mon key
parts to incubate the vacine,we now use chicken eggs and look at the damage this lying,deceitfull..forgive,brother for give god revealed that men know enough..oil useit up but dont suppress its balancing oppisite,,free..thats right energy..we all sink or swin to gether
you can steal but what god owns remains the rest leaveb in the ufofor to be meat
the final solution will not be fullfilled,,now where do we go i leave that to god ,what of a tree that falls in the desert ,cause and affect  



1 Dec 2005 @ 03:53 by jonah @203.206.115.209 : to pappa
reply to rocket pocket
if bhs
=1
line 4
religion6 scoffed at
on political forums..mapleleaf.
27 nov..o5
line 9
y..the sun..cent of unionated universe
hes rebuting religion..deceptive beliefs thar
have bought destruction uopon..all most previous
if benedicta xvi..doesnt respond for the church
where shall it go
fatima i can explain
but realise your absolute control
god must be of faith guys
if of real..documented proof
say as in a stone the shape of
the garden denton
that then is perhaps too  



27 Jan 2006 @ 09:56 by jonah @203.206.86.185 : the whale proved wikigeld/wikiseed real
every one was given one pound of the seed of the tree of life on the first of jan 2006 ,it is for emergency relief ,insurance ,medical assistance ,credit line and bank ,the value of the seed as a whole pound unit equates to 2500 us.
this is not much in the first world but represnts a real worth in most of the rest of the world ,this value is on a trible card as a CREDIT , THE BANKing of your wages into your account ,automatically makes double the deposit available as credit,put in one dolar lets you spend 2, insurance is by way of futures of the seed of the tree ,the lowest unit of wikiseed is a csingle seed ,on seed will but a meal,annother a drink ,5 a bed etc. well the previous had some affect so i try to post ,thanks ming..i hope..might clarify more if someone is out there ,denton thought me mad ,i am hopping mad every one got their right to the seed of the life tree taken when i got banned every where ,wiki-pedia ,invision,any way can stop complaining and start explaining at easter /may mardi-grass ,or hope to.  



28 Jul 2006 @ 02:22 by Bernie O'Mahony @220.220.76.71 : $20 bids
One thing I noticed that the finding didn't mention is, that in a classroom full of students, when you conduct such an experiment as this, perhaps students only bid because they felt compelled to contribute something to the class. What I mean is, as students, when asked a question by their professor, rather than just sit there and risk being noted for a low grade academic performance, perhaps they felt by playing the game so to speak, they would be seen as more academically viable?
Just a thought.  



13 Nov 2006 @ 10:50 by jonah @203.206.110.82 : wikiseed update
still havnt been called to account,or explain invited sun treaty members to form up in canberra i/i/07 to in augriate the sun time calender ,unlikly any will show up ,i will be in court on the 8/i/07 defending the head of my ancestoral totum ,the deer
that i tried to reclaim under the laws of chivelry ,by right of preceedance from the brisbane supreem court 12/10/06 ,advised judge he has no juristiction under heraldic law ,and that he and the court could rightfully be declared a party of special intrest due to his being a servant of the court ,that uses the deer in toto as dexter shield bearor for the state shield of queensland
that my right preceeds the appointment date of the coat of arms that bear the mark of the state authority and seal ,that i as the traditional custodian of the head of the deer have preceedant duty ,right and obligation to serve the deer
that i as head rule the hart ,the judge over ruled mu objection thus in affect ruled the hart to rule the head ,an interesting slant on an old saying if nothing else and ordered me to appear before the court [9] at brisbane majistrates court on 9/i/07 at 2;15 and surrender into custody.
thus the wikiseed wikigeld saga drifts into histry ,i am unsure that the court is allowed to make a second ruling having heard me at the last hearing ,but as i face 2 years default for not turning up i go ,also the maximum sentance for being a public nuisance is 8 to ten years jail plus the willful damage to the neck of the deer in dispute
this case will impact on copyright and patent law ,my duty stands clear ,at a previous court of higher juristiction rergarding the australian coat of arms re kevin buzzacott his sentance was 3 mths wholy suspended ,but how would i appeal any lawyer is as biased as the judge as that lawyer would be told as uncle kevs lawyer was that he too is a servant of the court ,i have no faith in sepperation of church and state but then being judged by a lawyer become judge who also can become a lawmaker when or if he decides to run for a safe seat in politics ,that under state law he can do at anytime
where is the sepperation of powers for lawyers and lawmakers ,but still justice will be served just as i offered the traditional owners thier own money and insurance with the wikiseed ,seed of the tree of life ,i offered to serve the head of the heart
that i did it alone was just as i was called by the spirit of my ancestors to do ,qld possably is being unconstitutional as it has no house of revieuw or senit over sight ,but thats what lawyers can and will do as they choose
i can but try to state my case and back up the scent marking i was called to do ,trusting the greater powers of this creation that what i have done ,that could be done ,has and will be done.
well ming i live you dude
you still got a great site mate all the best ,wish me to my fate
the crazy dude tilting at windmills
have been on [link] under the names of jonah ,hohan and johannine ,also now mainly at yahoo questions under johan and now oneundergod
well tot siens ,smoking the flax i refuse to quench ,i go to put the hot coal into my own mouth ,got a roachclip ?  



1 Aug 2007 @ 05:41 by jonah @203.206.98.178 : wash up on the wiki
the case re my ancestoral right to the heasd of the deer was not allowed test in court [case was not proceded with
a new case is now for smoking in a non smoking outside area [gotto keep busy] they changed that to failing to obey some liqure licensing act ,and two charges of stopping police in exicuting thier 'duty'
some dispute about biting [i didnt ; but to be fair allowed the oficer to press his forarm into my teeth [to explain his headlock was crushing my lip and i dragged my lip away [he thought i was trying to escape and pressed his arm into my teeth ,got photos of my crushed lip [plus cops know i respect them [ie wouldny bite a policeman ever[they really resent that sort of thing , and most know im only making a point [when i get arrested its to get a jury , perhaps now a group of my peers will hear my story
any how left a you tube link in the url but will leave another here jic
[link]
as all ways love to you bro
some great new articles [but from front page cant get here , so i come in the window [the system blocked it off , but opened a few others ]
thank god they play fair  



29 Dec 2007 @ 12:11 by jonah [one under god] @124.171.231.20 : wiki update
wiki treaties in the works for lacota indians
latest link [link]
court case 16 th feb  



12 Oct 2011 @ 21:33 by DNA @160.33.43.52 : What Stupid Fuck...
would participate in an auction where one "must pay the amount of their bid, whether they win or not" ??? A *REALLY* stupid fuck, that's who.  


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