“There are five rational pirates, A, B, C, D and E. They find 100 gold coins. They must decide how to distribute them. The Pirates have a strict order of seniority: A is superior to B, who is superior to C, who is superior to D, who is superior to E. The Pirate world’s rules of distribution are thus: that the most senior pirate should propose a distribution of coins. The pirates should then vote on whether to accept this distribution; the proposer is able to vote, and has the casting vote in the event of a tie [since this is the right of the proposer]. If the proposed allocation is approved by vote, it happens. If not, the proposer is thrown overboard on the pirate ship and dies, and the next most senior pirate makes a new proposal to begin the system again.” A classic of Game Theory in Economics, the results of the Pirate Game’s simple rules may surprise you.
