Introducing Nash Equilibria via an Online Casual Game That People Actually Play

This is an extended write-up of a lecture introducing the concept of Nash equilibrium in the context of an auction-type game that one can observe being played by "ordinary people" in real time. In a simplified model, we give an explicit formula for the Nash equilibrium. The actual game is more complicated and more interesting; players place a bid on one item (among several) during a time window; they can see the numbers but not the values of previous bids on each item. A complete theoretical analysis of the Nash equilibrium now seems a challenging research problem. We give an informal analysis and compare with data from the actual game.