Economics Challenge Series 2025 – Challenge 5: Auction

28 days ago

Hi Everyone,

Welcome to the Economics Challenge Series for 2025. For July and August, I am running an economics challenge series. The series consists of six challenges. All the challenges will commence in July and early August. I will publish and announce the results in August.

Five of the seven challenges from last year's Challenge Series return. The Auction Challenge is replacing the Complement vs. Substitute and Tax Game challenges. This year because of time constraints, I have reduced the number of challenges from seven to six. Below is the list of challenges and respective links for ones already commenced.

Challenge 1: Game Theory Game
Challenge 2: The Buying and Selling Game
Challenge 3: Pick-a-Door
Challenge 4: Ice Cream Game
Challenge 5: Auction
Challenge 6: Even-to-Win

Each challenge could reward winners with as much as 60 Hive Power. The value of the prize will depend on the level of participation. For each new participant, the prize will increase by 4 Hive Power. This increase will continue until 60 Hive Power is reached (15 participants). The first 15 participants will also receive a 50% upvote from this account.

In addition to the prize money, the top few participants will be given points. These points will be used to determine the overall challenge series winner. This winner may receive as much as 80 Hive Power. The value of the prize will equal the sum of the number of participants across all challenges. This will continue until 80 Hive Power is reached.

Welcome to the Auction Contest.

How to Play?

Auctions involve bidding on items to win them. The participant who bids the highest wins the item. In order to win this contest, participants need to be able to win one or more items. Winning the items through bidding is not sufficient to win the game. Participants need to bid below the value of the item to obtain value from winning the item. For example, an item could be worth $100. If a participant wins with a bid of $95, the participant has obtained a gain in value of $5 ($100 - $95). If a participant wins with a bid of $110, the participant has received a loss in value of $10 ($100 - $110). Participants with losing bids neither gain nor lose. At the end of the auction, the value obtained from each item won by each participant is summated. The participant with the highest total value wins.

The contest sounds simple. However, the value of each item up for auction is not revealed in the post. Instead, a range of values is presented. For example, an item could be valued between $50 and $150. The actual value is not revealed until the results post. The value is determined using a model that will be run in the results video. The model randomly generates a value between the ranges stated in the question. Possible values are uniformly distributed. For example, if the range is between $50 and $100, any value in this range is equally likely to be generated (e.g., 67 is equally likely to be generated as 98). Participants need to balance between bidding high enough to win the auction but not too high to exceed the value generated by the model.

All entries must be made in the comments section of this post.

Each account is only permitted one entry.

Game Assumptions

The value of each item is the same for every participant. E.g., one participant will not value an item 3 times higher than another participant based on his or her own personal preferences. Imagine participants are acquiring these items for resale rather than personal use.
Each participant has an unlimited amount of money.
Each participant can only bid on a maximum of 5 items.
Some items are restricted to a limited number of bids (e.g., if an item is limited to 3 bids, the fourth bid or any after that are not considered).

What information is provided?

All items are provided, but they are named as Items 1, 2, 3, etc.
Exact values for each item are not provided. Instead, maximum and minimum values are provided. A model will be used to determine these values using a uniform distribution.

How are the results of the game determined?

A Microsoft Excel model is used to determine the exact value of each item. The results post will contain a video of the generation of the values. The winner will be announced in both the video and written post.

Challenge Prizes

The total prize for this challenge could reach as high as 60 Hive Power. The number of participants determines the value of the prize. For every entry, the prize is increased by 4 Hive Power until a value of 60 Hive Power is reached. The winner will receive 2/3 of the prize, and second place will receive 1/3. The first 15 entries will be given upvotes. The winner of this challenge will be given 40 points, second place 15 points, and third place 5 points. These points will be tallied at the end of the challenge series to determine the overall winner.

Let the Challenge Begin!

For this auction, participants can bid on a maximum of 5 of the 12 items; they could bid on fewer if they choose. These 12 items are as follows:

Auction Items

The exact values of these items are unknown to the bidders. Instead, the bidders have information regarding the minimum and maximum values for these items. Table 1 contains the minimum and maximum values for these items and the maximum number of bids permitted per item. For example, if an item has a bid limit of 3, the fourth bid and any after that are invalid. It is important to take note of the previous participants bidding to see if the limit has been reached on any of the items.

Table 1: Minimum and Maximum Values of Items

Entry format

For this challenge, I expect to see entries made in the following format:

Item:
Bid:

Example of entry

Item: 2
Bid: 32

Item: 3
Bid: 105

Item: 8
Bid: 52

Item: 9
Bid: 65

Item: 11
Bid: 170

The closing date and time for this challenge is 6PM coordinated universal time (UTC) 02/08/2025. Responses after this time will not be accepted. The winners will be announced in the results post along with the video containing the generation of values for each item.

I hope everyone has fun and enjoys this challenge. I look forward to your participation in the remaining challenge. If you have any questions, feel free to ask in the comments section.

The Sapien Loop Series

I am writing a trilogy of books titled Sapien Loop. The first in the series is Sapien Loop: End of an Era and the second is Sapien Loop: Frozen in Time. I published both of these books as ebooks on Amazon, and I have posted completed chapters to my @captainhive account. I anticipate publishing the third book in early 2027. I expect to title this book Sapien Loop: Worlds Collide. In 2025, I plan to write short stories about some of the characters and their adventures. I will post these to my @captainhive over the course of the year.

Brief Summary of Sapien Loop: End of an Era

This story is based on the fictional planet Sapia and its sole country, Sapey. Sapey is portrayed as a form of utopia for all its citizens. No poverty. No war. Almost no crime. Opportunities for all.

This was enough for most citizens, but not all. In one of the small regions, some of the citizens had become discontent. They felt something important was missing in their lives. Their discontent did not go unnoticed. Some of the Sapey elite wanted to weaponise this discontent to gain more power. This created more chaos than they anticipated. This led to further widespread social unrest.

On top of the chaos, ambition and greed provoked another enemy. This enemy was on a mission to settle both new and old scores.

Brief Summary of Sapien Loop: Frozen in Time

This story is based six years after the original story. The Downs Region is still suffering from a serious health crisis caused by the contaminated water. The main characters are desperately trying to find a cure for the illness that has been caused by the water.

One of the main characters has discovered frozen humanoids in hidden chambers. It appears they have been frozen for a long time. These chambers connect to a vast network of tunnels. While exploring the tunnels, one of the frozen humanoids disappears. It appears he has been stolen.

The story takes a step back in time to tell the story of the frozen humanoids. How and why were they frozen? This part of the story also explains the fall of ancient Sapey and the birth of the Sapiens. Can those from the past be able to coexist with those from the present?