EWOT #6

My EWOT this week is based on the game that happened today in class. People bid over $1.00 for $1.00. This is a very bad economic move because you lose money with no gain whatsoever except the satisfaction of winning the bidding war at ones own cost. I personally did not bid on any of these dollars up for bid. This is because I knew that people would bid as close to $1.00 as possible to try to gain profit. The only problem was that if they were losing the bid, people would try to minimize their losses and bid over $1.00 so that they won't lose as much money. The problem with this is that the money bidded on the dollar are sunk costs. Once they get outbid, they lost their money already. Most people will just keep bidding not realizing that if they lose they are only increasing their debt. In the game, the person who won the dollar even had losses, sometimes past $2.00 of debt. The smart decision would have been to not bid at all, because even if you won the bid, you still lost money. I had the best situation by have a net loss and a net gain of $0.00 while everyone who bidded had only a net loss.