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Beating the Crowd

Suppose you are participating in an auction for a box. Nobody knows exactly what is in the box, but they are bidding on it for various reasons; some think they can make money, some might have sentimental reasons, and others might just be having fun. You yourself are trying to make money. You asked around a bit, did some research, and think that you have a good estimate for the value of the box. You think it’s worth $10,000 and decide to bid $9,000.

This seems surprising, but is logically consistent: in the absence of other information or opinions, one would have to assume the average human guesses any quantity correctly. There’s an announcement: the ride is temporarily out of commission, but the park expects it to be operational again “very soon.” You don’t mind waiting a bit, but in front of you people groan and start to leave the line. One important aspect is that there’s some inertia: no one else has the specific set of interactions you’ve shared and the (presumably) demonstrated emotional and physical connection.

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