The Motley Fool Discussion Boards

Previous Page

Investing Strategies / Risk


Subject:  Re: The Pirate Puzzle Date:  2/4/2002  9:03 PM
Author:  TWA40 Number:  133 of 297

The first pirate offers to divvy up the loot equally (100 each), plus pay an additional bonus (1 doubloon?) out of his own stake to the first five pirates that votes yes in favor of his plan (assuming his own 6th yes vote costs nothing). He'll stress that unless this plan is adopted immediately, a vicious cycle will be initiated until all but 1 pirate is dead (whether this is true or not, it makes a good story). I think he's got to offer an incentive based on behavior, and the minimum cost I can envision is a single doubloon to the first 5 critical votes. Tit-for-tat retaliation doesn't work in this case because you can't tit anybody back for tatting on you.

If the pirates vote against this plan, they are assured of getting 111 doubloons on average, less a 1/9 chance that they will be selected to go next, which they'll want to avoid, because the marginal return for drowning pirate number 2 is 111/8, and the marginal value will keep climbing with successive drownings. The infinite value of your life doesn't change. Is 111 over infinity more than 100 over infinity?


Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us