Traveler’s Dilemma
- Inventor of Game: Kaushik Basu
In the Traveler’s Dilemma, an airline loses two suitcases that belong to two different travelers. Both are identical suitcases and contain identical antiques. The airline manager is now tasked with settling the claims of both travelers. He must tell them that the airline is only liable for a maximum amount of $100 per suitcase. However, he’s unable to find the exact price of these antiques. Therefore, to determine a proper appraised value of the antiques, the manager decides to separate each traveler to speak with them alone. He asks them to write down the amount of the antique value. He also gives a rule that it must not be less than $2 and no larger than $100.
The manager claims if each traveler writes down the same number, then he will see this as the “true” value of the antiques and reimburse both travelers with that exact amount. Yet if either writes down a smaller number than the other, the smaller number will be seen as the true value. Both will be given that number along with $2 extra being paid to the one who wrote the lower value while $2 would be deducted from the person who wrote down the higher amount. The question is: what strategy should the travelers employ? Most would say to write down the maximum amount, as this would generate the highest profit for both and they’ll be given the same number without either seeing a deduction.
