Economics 7 Week Challenge Series – Challenge 1: Auction Results

Hi Everyone,

Welcome to Week 3 of the Challenge series 2022. We begin this week with the results post for Challenge 1: Auction. This post contains a video of an Excel Model, which generates the values of all 12 items that were auctioned in the challenge, the winners of each auctioned item, and the participant who made the highest profit from the auction.

Winner determined in this video

What is the Auction Challenge?

The auction challenge allows participants to bid on up to 4 of 12 items in an auction. The participant who bids the highest wins the value of the auctioned item. However, the values of the auctioned items are not stated in the question. Instead, a range of values are stated. These values are generated using the Excel Model shown in the video in this post. Participants should aim to win the auctioned items without bidding over their values. This will produce a profit. Profit is calculated by subtracting the winning bid from the value of the item. The participant with the highest profit is the winner.

Responses to the challenge are made in the comments section of the challenge post. The account with the winning entry will receive Hive equivalent to 5 times the number of participants (e.g. if challenge has 6 participants the prize will be 30 Hive (5 × 6)). The maximum prize for this challenge is 60 Hive. In addition to the winning prize, the first 12 entries are given upvotes. In addition to the prize in Hive, the winner receives 30 points, second place 15 points, and third place 5 points; these points contribute to determining the overall challenge series winner.

The format of the required entry is explained in detail in the challenge itself.

For a more detailed explanation, you can access the challenge post using the following link.

Other challenges

There are six other challenges in the series. Three of them are now closed. One is still running. Three more will be posted in the upcoming weeks. See links below.

Closed

• Challenge 1: Auction
• Challenge 2: Buying and Selling Game (Business Version)
• Challenge 3: Tax Game (New)

Open (Until 28/08/2022)

• Challenge 4: Game Theory

Upcoming

• Challenge 5: Make Me Happy
• Challenge 6: Buying and Selling Game (Original Version)
• Challenge 7: Pick-a-door (New)

Results of Challenge 1

Table 1 contains the bids made by all participants and the winners of each auctioned item.

Table 1: Bids and winners of auctions

Of the 9 participants who entered, 5 participants won at least one auctioned item. @fatherfaith won 4 items, @pana1 won 4, @adeyemi won 2, and @michael47 and @joshsticks28 won 1 item each. Winning more items does not necessarily equate to obtaining the highest profit. The profit margin on each item won is critical in determining the overall winner.

Table 2 contains the values of each item (generated by the model) and the profit each participant made on their winning bids. Table 3 contains the overall profit made by each participant.

Table 2: Value of items and profit made from each item

Table 3: Overall Profit made by Participants

Congratulations to @fatherfaith for winning the Auction Challenge with a profit of 339. @fatherfaith made profits on three of the four items won. @fatherfaith wins 45 Hive for this challenge (5 × 9) and 30 points. @pana1 is awarded 15 points for second place and @joshsticks28 is awarded 5 points for third place.

Race to become the Challenge Series Champion

After just one challenge, the overall scores for the Challenge Series are as follows.

Overall Series Score

This table will be updated in every results post.

Challenge Tips and Analysis

@fatherfaith played the game very well. He used two important strategies that helped him win this game. He bid very late (final hour of the challenge). This greatly reduced the chances that someone would outbid him to win the items he bid on. He bid on items where the highest bids were below the expected value (e.g. Item 12 had an expected value of 195 (40+340)/2 and his bid was only 81). Therefore, he maximised his chances of obtaining a profit with his bids. He was also very fortunate that so many items had bids well below their expected values. If these options were not available, bidding would have been much more difficult. Under these circumstances, the best approach would most likely have been to bid on high risk and high payoff items such as Item 7.

More posts

If you want to read any of my other posts, you can click on the links below. These links will lead you to posts containing my collection of works. These 'Collection of Works' posts have been updated to contain links to the Hive versions of my posts.

Hive: Future of Social Media

Spectrumecons on the Hive blockchain