Hi Everyone,
In July 2021, I brought back the Economics 7-week Challenge Series (previously called the Economics 6-week Challenge Series in 2018). In previous years, a combination of lack of Hive and Hive Power, and the brutal altcoin Bear Market prevented me from running the Challenge Series. Well, the Bear Market appears to be back but less brutal for Hive than it was for Steem in 2018, 2019, and 2020 (Hive is worth well above 10 cents). Even if Hive dips lower, I am committed to making the Challenge Series an annual event. I have no plans to significantly reduce my Hive Power in the next few years. Therefore, it should remain easy to fund.
The video below explains the challenge series and provides a brief run-through of all 7 challenges.
This year’s challenge series will begin in August (exact date still to be determined). Over a period of seven weeks there will be seven challenges. In weeks one and two, there will be two challenges each week (i.e. Challenges 1 to 4). In weeks three, four, and five, there will be one new challenge and one results post each week (i.e. Challenges 5 to 7 and results for Challenges 1 to 3). In weeks six and seven, there will be two results post each week (i.e. results for Challenges 4 to 7). At the end of the seven weeks, the overall winner will be announced.
For my Buying and Selling Games, the prize has been consistently 30 Hive. For the challenges, the prize will depend on participation. As the number of participants increase, so does the value of the prize (see GIF above). For each new participant, the prize for the challenge will increase by 5 Hive. This will occur until the prize reaches a maximum of 60 Hive for the challenge. For example, if there are 5 participants, the prize will be 25 Hive (5 × 5). If there are 10 participants, the prize will be 50 Hive (10 × 5). If there are 12 or more participants, the prize will be 60 Hive. For some challenges, the prize will be awarded to just the winner and for other challenges it will be awarded as 2/3 to the winner and 1/3 to second place.
In addition to prize money, points will be awarded to the top performers of each challenges. The participant with the most points at the end of the Challenge Series will be the overall winner. The prize for the overall winner will depend on total participation across all 7 challenges. For each participant, the prize will increase by 1 Hive. This will occur until the prize reaches a maximum of 80 Hive. For example, if challenges 1 to 7 have 8, 7, 8, 6, 12, 10, and 14 participants respectively, the prize for the overall winner will be 65 Hive (8+7+8+6+12+10+14=62). If the participation rate is high, as much as 500 Hive (7 × 60 + 80 = 500) will be given away.
The focus of this challenge series will be economics. It will follow a very similar format to last year’s challenge series. I strongly recommend that you read last year’s description post (Spectrumecons Seven-Week Challenge (Coming Soon)). Five of the seven challenges from last year’s challenge series will be included in this year’s challenge series. These challenges are as follows (clink links to view last year’s challenges):
There will be two new challenges. These challenges are the ‘Tax Game’ and ‘Pick-a-door’. These challenges are briefly described in the following two sections.
The participant will be required to set the tax rate for a very small country. Tax has been simplified to just a percentage of overall income (i.e. no distinction between different taxes such as income tax, corporate tax, GST, etc.). The current tax rate and national income will be provided in the question. The participants will be required to set the tax rate yearly for the next 3 years (i.e. rate in year 1, year 2, and year 3). They can choose any tax rate they please. Changing the tax rate will have both benefits and costs. For example, lowering the tax rate will raise income but, if tax revenue falls as a result of a lower tax rate, there could be a social cost of reduced funding of services provided by the Government. The extent of the increase in income and social cost will be determined in a Microsoft Excel model. However, participants will be provided a range of possible values. Social costs and benefits will be halved in the following year as it is assumed the market will partially adjust to lower or higher Government spending.
The winner of the challenge will be determined by the sum of national income for the 3 years plus or minus changes in social costs. The winner will receive 2/3 of the prize and second place will receive 1/3 of the prize.
The challenge series is focused on economics. An important aspect of economics is dealing with the unknown. We do not how people will respond to changes. We can only predict behavioural changes and the extent of these changes based on the information we have. In this challenge, participants will need to make decisions based on expected payoff and risk. Participants will be presented with 12 doors. Behind each door there could be a prize (expressed as dollar value). Each door will have a possible prize worth a different dollar value. As the dollar value increases the probability of the prize being behind the door decreases. For example, for Door 3, there could be a 50% chance of a prize worth $50 and for Door 7, there could be a 25% chance of a prize worth $120. If the prize is not there, the participant will receive a value of zero.
To open a door costs $10, each participant will be given a budget of $40. Therefore, each participant could open as many as 4 of the 12 doors; however, they are not compelled to use all of the budget. The winner will be the participant with the highest dollar value at the end (i.e. combined value of budget not spent and prize values). However, if a participant opens 2 or more doors that have zero value behind them, they will be disqualified from the contest. The winner will receive 2/3 of the prize and second place will receive 1/3 of the prize.
That is all the information I have for now. I will include a comment in this post one week before the challenge series begins and I will provide information in the Actifit Report and Update one week before the challenge series starts. To avoid missing out, return to my Hive page frequently.
If you want to read any of my other posts, you can click on the links below. These links will lead you to posts containing my collection of works. These 'Collection of Works' posts have been updated to contain links to the Hive versions of my posts.
▶️ 3Speak
