Bargaining Over A Dollar

In graduate microeconomics, I remember having to study the various demonstrations of the "bargaining over a dollar" game. Two players would take turn making offers on how to divide a dollar among each other and the outcome depended on the number of rounds, bargaining costs, impatience factors, and who got to make the initial offer. There are probably hundreds if not thousands of variations of this game. The news provides us with a real life demonstration on Yahoo News!

CLEVELAND – A contractor who found $182,000 in Depression-era currency hidden in a bathroom wall has ended up with only a few thousand dollars, but he feels some vindication.

The windfall discovery amounted to little more than grief for contractor Bob Kitts, who couldn't agree on how to split the money with homeowner Amanda Reece.

....

And 21 descendants of Patrick Dunne — the wealthy businessman who stashed the money that was minted in a time of bank collapses and joblessness — will each get a mere fraction of the find.

"If these two individuals had sat down and resolved their disputes and divided the money, the heirs would have had no knowledge of it," said attorney Gid Marcinkevicius, who represents the Dunne estate. "Because they were not able to sit down and divide it in a rational way, they both lost."

Ah, the prisoner's dilemma be a harsh mistress, but I'm surprised the property rights extended to the descendants of the original wall depositor. I guess we'll have to consult Dana, the TPS legal expert, in the comments!

Hat Tip: Jason Oberle for the pointer.