The Winner's Curse

This phenomenon is known as Winner's Curse. Let us take an example
and then we will talk on it.

A teacher comes in a
room with coin filled in a glass jar.The teacher gives option to the
student to guess for the total amount of money, the guy guessing largest amount of money
will be getting the jar for that price. Almost more than 60% of the student will be
bidding for nearest value of the sum in jar adhering to wisdom
of crowd and some will bid for quite lesser than the actual sum and
some will go for more than the actual sum. The guy winning the bid has paid more than
the item auctioned values. The winner always gets the feeling that he
overpaid.

First of all, let's see what common
value auction means. Common value auction is the type of auction where the item has got
a fixed value for all participant for example a 8-GB USB drive. Its market value is
fixed and costs equal for all. So, when in auction most of the people will be bidding
near the market value but the guy winning the bid must be bidding higher than other
fellows i.e. higher than its market price. So, after getting the product he gets a
felling that he could have bought it in lesser price in market.So, it becomes a losing
situation.

If the auction is not common value
auction then there is different situation. Lets take example for bidding of bat-mask and
bat-belt. I am a bat man fan so I could want to buy it for $150 but for one of my friend
who doesn't like batman at all it could have a value of less than $10. So , in this
case, the winner is not necessarily loser. One of the way to avoid winner's curse is to
bid closets to market price.

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1.lostbid

The Resaon Communism Failed : II

10. Due to limited amount of resources, the is always a struggle to
get it and Someone will always get greedy enough for sharing it.(Thanks to
lupin)
11. Men have an affinity for their friends, family, acquaintance
than for a stranger, that makes commuism in a state to deviate to oligarchism.
12. Monetary Currency
13. Weapon Race
14.
Conspiracy from non-communist Capitalist Nations
15. It thinks highly
of wisdom of
crowd but not that highly of madness
of crowd
16. Reluctance of government to move toward pure
communism (statelessness)
17. Surplus
Value still exists thought the state is communist for cheap
labour.
18. Commodity
Fetishism remains in the mind of ruling body.

The Resaon Communism Failed

1. State is run by politicians, not by economists.
2. Leaders confuse the final state of communism(statelessness) with anarchy(not
in philosophical sense).
3. Capitalist think they may lose market if
communism grows.
4. People prefer short term benefit over a long term
benefit.
5. Party rules, commune doesn't.
6.
Proletariat don't get access to capital
anyway.
7. The country embracing communism were poor.
8. Communist ideology always argues for the freedom of a person to think and
express in his ways but countries embracing communism never follow that.
9.Communist theory assumes that all humans are basically good, well motivated,
and possess equal capabilities and motivation.

To
be Continued...

Slumlog Millionaire and The Almighty Buck

Yesterday, Talking with one of my friend, Satyam
Nigam, I asked him

"Did you like
Slumdog Millionare ?"

"It was so-so" he
said.

"Do you think it has any chance of winning in
oscar ? "

"preety good chance
"

"Why so?
"

"See, I give you an analogy. India is an emerging
market. During early 90's there was less fashion consciousness in India and less people
were interested in fashion products. The strategy of global fashion market leaders
remained to exploit the potential market in India, From 1994 to 2000, 6 of the Indian
girls were Miss World/Universe. You can see the fashion market in India
now."

"So you want to say if Slumdog Millionare
wins the title, It will help global film production companies to penetrate Indian
Market"

"Or it can be made to win. It's all about
the Almighty Buck brother"

I kept wondering "Is it
so?"