A honey trap

Consider the following situation. It's an auction, but with this twist: the winner pays his bid and collects the wares as usual, but the second highest bidder also has to pay, and gets nothing.

The first item on auction is a £20 note. I'll start the bidding at tuppence. Do you want to outbid me?

We'll both be better off if you don't, because if you bid 3p then it's obviously in my interest to bid 4, and now we're in trouble. We'll happily bid away until we get to about £19, which is when we'll start to feel uneasy.

You bid £19.90. If I come second I know I'll have to pay whatever my last bid was- certainly more than a pound, so I'm better off bidding £20 and just covering my losses. The problem is that now you'll bid £20.10 and loose ten pence rather than loose £19.90. This process has no ending.

The only way out is to nip the process in the bud: make sure your bid is higher than the true price of the wares plus my total bid so far. That way we can both loose slightly instead of one of us paying a fortune for the note and the other paying a fortune for nothing.

In other words, try to get a bargain and you end up paying either a) an infinite amount or b) as much as you can bid before you cut your losses.

Thanks for reading. I may be the only person in the world who thought that little idea was strangely elegant.

dusty thirsty coyote, would you like a drink from me?