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Comment by alextingle | Hacker News Reader

Is it reasonable for Stefan Thomas to get half of the total?

What does game theory say is the optimum split between two parties like this, who individually have nothing, but can work together to unlock a vast fortune?

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Game theory generally says offer as small as possible. Even 1% is better than nothing. Sadly this solution generally ignores payouts outside the game. We are pretty hardwired to have feelings related to fairness, and that changes the payout equation a lot.

I used to annoy one of my freshman econ professors because I would “stubbornly” (from his view) not play along with game theory thought experiments. His claim was I was being irrational not to accept some theoretic dollar amount, and my response was that I would gain more than said dollar’s amount from seeing my fellow students profit more. (imagine games intended to evoke prisoner’s dilemma outcomes, like you get $100 dollars if you say yes, all 200 students get $1 if you say no).

This was a period when behavior economics was starting to be really taking off, so I wonder today how those lessons are taught, because it is not at all irrational to value things outside of money.

Economists love to imagine spheres.

In an extreme scenario where there is only one person who can possibly ever unlock it, you would have to pay them basically all of the reward since without them, the usb is and will always be worth nothing.

At some insultingly small amount the payout becomes 'unfair.' So if you're losing nothing why let yourself be insulted? So if the unlocker (who also loses nothing by doing nothing) wants a portion he would have to consider that.

If there were a lot of applicants then maybe the Secretary problem would be applicable, but considering how few there are that can decrypt it i doubt there's an optimal split to be found theoretically. It probably comes down to how greedy or stubborn Stefan is, since theoretically he would profit even if he only kept 1%, but I doubt he would agree to those terms. 50% sounds reasonable to me.

https://en.m.wikipedia.org/wiki/Secretary_problem

I don't follow. In a secretary problem, you have multiple offers, but can consider only one at a time, and cannot revisit past offers.

If there only one company can unlock, then it's just a 1:1 negotiation.

If there are multiple companies, Stefan can review bids and accept the lowest.

It's not quite the secretary problem, but he does have the option to wait N years and see if someone else comes up with a technique, or if the technique eventually leaks.

Waiting 9 more years to unlock the drive for free versus taking 50% now is equivalent to investing at 8% annual returns.

Game theory says that each party should receive their Shapley value. In the case of having one guy who owns the USB drive and N guys who are capable of decrypting it with equal proficiency, then the one guy's Shapley value is N/(N+1) of the reward and the other guys' are 1/(N+1) of the reward.

https://en.m.wikipedia.org/wiki/Cooperative_game_theory

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