invite and outwit
Game theory presents mindblowingly cute frameworks. Here’s two captivating models that revolve around the concept of - invitation. a market designer’s dilemma Imagine a seller with a valuable item and a crowd of potential buyers. Unlike a typical auction, these buyers have the unique ability to invite others outside the current circle to join in. For the seller, the ideal scenario a highly competitive market with as much participants as possible - where the item fetches the highest price. However, the buyers’ incentives are misaligned, like, what if the new invitee values the item more highly and outbids the existing buyers? This risk creates a strategic tension, where buyers might be inclined to ’throw away the invitation’ to protect their own chances. ...

