Nobel Prize in Economics and Game Theory (at Logos!)

It all started innocently enough. I went for a cup of coffee on Monday afternoon at the Starbucks up the street. When I was there, they gave me a coupon for a free Pumpkin Spice Latte.

I like my coffee straight. No cream, no sugar, and certainly no “pumpkin spice”.

So, on my way back to the office, coffee in one hand and coupon in the other, I started thinking. Earlier that day, the Nobel Prize in Economics was announced. It went to some guys (Thomas Schelling and Robert Aumann) who did foundational work in Game Theory. (yes, I can be a bit of an econ geek … )

I had the brainstorm of giving away the coupon via Logos company email, but experimenting a little with game theory in the process. Read on if you’re interested …

See, I didn’t want to just give away the coupon to the first person who responded to a company email (the typical thing that seems to happen). So, I decided to give the coupon to the seventh person that emailed.

At first, I thought maybe the fifteenth person, but then I didn’t know if there would be fifteen people interested in a pumpkin spice latte. So I cut it down to seven. That seemed to be a good number for all sorts of reasons.

I sent out an email at 2:02 PM. The rules were simple:

The seventh responder got the coupon.
Only the first response counts, second (and subsequent) responses were void.

For good measure, I decided that 4:00 would be the cut-off time. If there weren’t seven responses by 4:00, I’d keep the coupon and do something else with it.

So, game theory is all about thinking through the strategy to be number 7. Respond early? Wait until later? I thought folks would wait until closer to 4:00 and start to respond then.

I was wrong. Here’s the chronology.