abstract:The dollar auction is a non-zero sum sequential game designed by economist Martin Shubik to illustrate a paradox brought about by traditional rational choice theory in which players with perfect information in the game are compelled to make an ultimately irrational decision based completely on a sequence of rational choices made throughout the game.Shubik: 1971.
Earlier this year, the government launched a new dollarauction system, which complements existing state-run currency channels, in a bid to pump more hard currency into the private sector, but economists have so far questioned how effective the mechanism will be in satisfying demand.