Thursday, December 08, 2005

A Talmudic Cab Ride

Carl Bialik devotes his The Numbers Guy column in today's WSJ to an interesting problem:
Three economists get into a cab. They're each getting off at different places along the route. How should they split the bill?

It's not a joke but an everyday numbers dilemma, and it highlights some important economic principles. I asked several economists to solve the problem, and they came up with some unique approaches. One called on the work of game-theory pioneer John Nash (the inspiration for "A Beautiful Mind") to divide up the bill. Another referenced the ancient Jewish legal text, the Talmud.

Answers were all over the place and reflected different notions of fairness and approaches to bargaining. I may use it as an interview question :-)


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