Moving Day

Module 3: Offers and Concessions

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Professors Gershwin and Brown were enjoying August; with no classes, the campus seemed very calm. As was often the case, they ate lunch together and following their meal they took a walk up Nashville. There seemed to be more activity than usual for August.

As they turned on Willow Street, it hit them: Moving Day! Another right turn revealed a few guys loading up an old mini-van.Clearly in a hurry to pack the van and get to their new apartment, the guys were arguing about what to take and what to leave behind.

Already on the sidewalk there were a number of boxes marked "take me, I'm yours."An avid collector of everything, Brown, a U.S. historian, was delighted to go through the box.A biologist, Gershwin, could not help thinking what might be growing on the heap of trash.Gershwin nonetheless followed Brown's lead and started rummaging through the boxes, suddenly noting a second edition of Darwin'sOrigins of the Species.

"Take a look at this," Gershwin yelled over to Brown.

"My, my.Isn't this something," was all that Brown could say in response.

Brown and Gershwin rummaged a bit more, but didn't find anything of interest.At this point, Gershwin approached one of the guys in the van."So we can take what we want?"

"Take it all!" was the reply.

Brown and Gershwin looked at each other and continued on their way.As soon as they were out of earshot of the van, Brown turned to Gershwin and said, "Well, do you really want that book?"

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In the following exercise, you will play the role ofBrownand your counterpart the role of Gershwin.By one method or another, you must determine who is to get the book.

After some careful thinking, you have valued the book at$600.That is how much it is worth to you.You know that Gershwin is quite keen on the book, but you don't know the precise value your counterpart will place on it.

You are free to cooperate and to use any method (e.g., the use of side payments) that's mutually agreeable to determine who gets the book.For instance, you may tell your counterpart your true values if you wish.(You maynot, however show Gershwin the actual written value above.)Indeed, the assignment of the book may be made by a randomized device (a roll of a die, for instance) and may be accompanied by a cash payment between the parties.Only one person can obtain the book.