Let’s Talk About Amazon’s Cash Flows

“A magician creates magic and mesmerizes the audience. But it is a pantomime, and the audience knows that it’s a ruse. It’s in the name: a “magic trick”. They play along when the magician tugs his sleeves to show there is nothing hidden within them, or that the top hat is empty of a rabbit, or eggs, or flowers. Beneath the façade there is only sleight of hand, wires and contraptions, misdirection at a key moment.”Laura Lam, Shadowplay
Continue reading Let’s Talk About Amazon’s Cash Flows

If you like this post, share it with your friends/followers on:

Shubik’s Dollar Auction & Cash Burn in Consumer Internet

In his 1971 paper[i], Martin Shubik described the Dollar Auction game to present a paradox in non-cooperative behaviour and escalation. The rules of the dollar auction game were simple.

  1. The highest bidder pays his bid amount and wins a 20 $ bill[ii].
  2. The second-highest bidder also has to pay the amount he bid but gets nothing in return. (Yes. It sucks to be the second-highest bidder)

Technically, a bidder can win the dollar bill by bidding just 1 dollar but that rarely happens. Here’s what typically happens when this game is played in large groups. The bidding starts off with Continue reading Shubik’s Dollar Auction & Cash Burn in Consumer Internet

If you like this post, share it with your friends/followers on: