While I was getting my econ degree, all of my game theory classes and most of my classes that discussed game theory used this as an example. There is no way to

While I was getting my econ degree, all of my game theory classes and most of my classes that discussed game theory used this as an example. There is no way to win if the cost of bidding is 0. If there is a cost of bidding and that cost is 10 cents for example, the only way to win is to bid $19.90. However, if you're required to play, the most efficient outcome happens when you're the first to bid and you open by bidding $20. You're neutral on outcome and have satisfied your requirement to play the game. I think there is a psychological problem with the game when the prize is so small and the incremental losses/bets are so small. If the prize was say, $10,000 and the minimum bet increment was $5, people are more likely to bet higher and higher because losing $5 (at a minimum) is psychologically more defeating than losing $0.01 (at a minimum). EDIT: Didn't realize the site was 1v1. It would work better if there were several people. There is absolutely no incentive for a player to bid beyond $20 if the losing player doesn't have to pay their bid.