Did Justin Sun Play a Dominant Strategy When He Won a Lunch With Buffet?
https://www.inc.com/minda-zetlin/warren-buffett-lunch-justin-sun-bitcoin-cryptocurrency.html
The article above shares news about the most recent winner of the lunch with Warren buffet auction. Every year, Warren Buffet holds an auction for a three-hour lunch date with him. All profit is used to benefit Glide, a charity organization in San Francisco that aids people who suffer from homelessness and addiction. This year’s charity-auction winner is Justin Sun, a 28-year-old found of Tron and CEO of BitTorrent.
What was really shocking about the result of this year’s auction was the price. The winner of this first-price auction was willing to pay $4,567,888. This broke the previous record, which was only about $3.3 million. As much as people were shocked by the price, they also questioned whether the lunch will be worth the price.
The author of the article, Minda Zetlin, continues the article to explain why it was worth it. She begins by clarifying that Sun attempts to convince Buffett that cryptocurrency is another ground-breaking technology that will play a more significant role in the society in the upcoming future. Through several interviews, however, Buffet undermined the benefit of investing in Bitcoins by merely calling it a “gambling device.” Sun looks forward to changing his mind by bringing other experts in the industry, such as founders from Ethereum and LiteCoin.
Even if Sun fails to change Buffett’s perspective about Bitcoin, Zetlin argues that it still may be worth the price. Sun’s bigger goal in his career is to become a big bridge that connects the two isolated worlds: cryptocurrency and institutional investors. The lunch will give him a higher profile and greater credibility as he continues to strive for such a goal.
In the INFO 2040 course, we learn that it is a dominant strategy to bid lower than their true value in first-price auctions. That being said, some people may wonder why anyone would be willing to pay such a high price for one meal. However, this article explains that Sun has actually made a dominant strategy. He had a higher value for the lunch because he saw a chance to change his career by earning higher profile and credibility in the industry and a potential shot to change the world by convincing one of the most prominent investors in the world to accelerate the growth of the cryptocurrency industry. Shortly put, Sun invested around 4.6 million dollars in granting himself a chance to change the world. Considering the great value that he saw in the product, he for sure bid less than his true value, and thus played the dominant strategy.