[02] Dollar Auctions
Title Card
YouTube Link
Status
Released
Transcription
![[02] Dollar Auctions.docx](https://www.notion.so/image/https%3A%2F%2Fprod-files-secure.s3.us-west-2.amazonaws.com%2F99a00784-dfcd-41d5-8941-002db8ff69be%2Facc1328b-a3d2-4a82-b23d-7485c4cc0824%2F02_Dollar_Auctions.docx?table=block&id=cdb59513-8f1a-4bd3-9cd7-93e046c4e5c3&cache=v2)
Air Date
Sep 19, 2023
Target: 30-45 minutes
Script
Intro
<<dual screen, background visible>> Shift+1
ZFi: GM and welcome to Moloch Traps, our new podcast here at From Aa to Zzz. I’m ZFi, this Zombie Shepherd, and we’re excited to be bringing you this new show in collaboration (again) with BanklessDAO and its Audio/Visual team. To be clear, opinions in this series expressed by either of us are our own opinions and do not reflect the opinions of BanklessDAO at large.
This week, we will continue to study and discuss excerpts from the "Meditations on Moloch" essay, written by Scott Alexander. The essay provides examples of multi-polar traps and delves into various instances from history, biology, and economics to illustrate how competition often results in collective harm.
In today’s episode we’ll discuss the concept of Dollar Auctions. Let’s start with Alexander’s words on this example.
Segment 2 — Dollar Auctions
Zombie Shepherd:
(reading from Meditations)
2. Dollar auctions. I wrote about this and even more convoluted versions of the same principle in Game Theory As A Dark Art. Using some weird auction rules, you can take advantage of poor coordination to make someone pay $10 for a one dollar bill. From a god’s-eye-view, clearly people should not pay $10 for a on-er. From within the system, each individual step taken might be rational.
(Ashcans and unobtainable dollars!)
<definition if needed>
Segment 3 — Open Discussion
<<dual screen, full frame>> Shift+2
Zombie Shepherd notes:
Hallmarks of a dollar auction, FOMO, fear of being the biggest loser, only the house wins, second player also pays full bid
Winner’s Curse - in moat auctions the winner will be an outlier willing to pay more than what a thing is worth
Second-price auction
- un-gameable
- no amount of game theory would win you a favorable outcome
- everyone puts in a blind bid of what they think the thing is actually worth
- its the only way to place a rational bid
- the highest bidder wins and pays the second highest price
ZFi notes:
as you said, thought experiment vs real life example
war + escalation, but dont go too deep
vietnam
escalation of comittment
involvement started small and escalated
sunk cost, throwing good money after bad
both in terms of money and in terms of human life
loss aversion
psychological effect of losing something you already have is stronk
ego boost
cant lose and wear the loser hat on the international stage
poker antes?
Conclusion
<<dual screen with background visible>> Shift+1
Zombie Shepherd: (start and then hand off as appropriate)
Summary
What would YOU do? @listener?
Outro
Zombie Shepherd:
Thanks for watching today’s episode of Moloch Traps. We hope you enjoy this series. As always, none of what we say is legal or financial advice, and we encourage listeners to do their own research in these areas before making any related decisions.
If you find our content informational, educational, or entertaining, and would like to support us, please collect these episodes on Lens. 18% of proceeds go back to BanklessDAO, 2% supports Lenstube for hosting our videos, and the rest helps to make From Aa to Zzz productions possible.
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We’ll see you next time, frens!
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