Why no one speaks against government–A game theory explanation
The answer of the following game theory question sheds light on the issue why no one speaks against government in China.
Question:
Two players, A and B, are bidding in a blind auction. They each write down a bid and give it to me.The winner (higher bid) pays his bid to me and nothing else happens to him. The loser has to give me $10. He does not pay his bid.
Assume for now, that the bids have to be integers. For example, if player A writes $5 and player B writes $3, then player A pays me $5 and player B pays me $10.
In case of a tied bid, I flip a coin to determine the winner. The winner pays the bid, the loser pays $10.
With two rational players, what would their bidding strategies be?
(from Jason’s blog)