I was intrigued for a couple of reasons. The appeal started with the rate. The savings yield was very competitive and even slightly higher than ING Direct. As of this writing, Discover Bank offers a 1.35% APY versus ING Direct’s 1.10%.

And then there was the name. The bank is associated with Discover Financial Services, and it brought to mind the good customer service and great website usability of the Discover credit card.

The high rate and the good reputation were strong reasons. I was sold on the account…almost.

Before I opened an account, I decided to look at the fees. It was there I saw what looked like a red flag.

The stupidest fee ever

Here’s a list of Discover Bank online savings account fees:

One fee stood out to me and it’s marked above–the Account Closure fee of $20 within 90 days of opening.

From a consumer perspective, it puzzled me. I’ve never heard of a bank that charges to close an account, let alone an online one that doesn’t have the overhead of a physical bank. This definitely seems like a sneaky and annoying fee.

It also struck me as a bad signal from a game theory perspective. A bank that has a high rate and a good reputation should not need a closing fee to keep me as a customer. It’s customer service should do that job. The account closure fee was like the bank saying, “Trust us, you’ll love our services. But by the way, if you don’t love our services, we’ll charge you to leave.”

This is reinforced by the 90 day lock-in period. A small period of 15 or 30 days might be understandable to discourage rate-chasers that keep moving their money around to find the highest rate. A 90 day period seems excessive. I am not going to try an untested savings account for a 90-day period, particularly in a market with so many banks that don’t charge closing fees.

If Discover Bank ever wants my business, it will eliminate this account closure fee.

And it would also help to improve its customer service–Discover Bank is getting a lot of /bad reviews.

Handbag companies were not happy to see reality star Snooki on Jersey Shore vomit in their handbags and defile their brands.

And so, they fought back in an interesting way. Via NBCPhiladelphia:

Well, it ends up that fashion powerhouses like Gucci and Coach have been allegedly sending the “Jersey Shore” train wreck [Snooki] expensive designer bags.

The kicker: Coach is not sending [Snooki] Coach bags. They’re sending her Gucci bags, and any other competing designer product they can put into her Guido-grabbing hands.

Who knew the strategies of Game Theory would come so naturally to the fashionistas who think a $5,000-price tag for a handbag is a reasonable marketing move?

It’s funny how each company is fighting by trying to destroy the competitor. The logic is something like “the enemy of my enemy is my friend.”

On closer analysis, the game is not good for the companies. The brand war is a type of Prisoner’s dilemma.

The best outcome is if no one sent Snooki a handbag. Yet each company is motivated to send a competitor’s handbag–regardless of what the other does–and so each sends a handbag as a dominant strategy. Ultimately both pay for handbags and both brands get shown negatively on TV.

In spite of the clever strategies, the losers of this “unbranding game” are the companies. The clear winner is Snooki. Ironic, isn’t it?

The hand is from Season 6, Episode 49, and here’s a clip where the hand gets interesting on the river:

Youtube video: Poker After Dark hand at 7:52

The action is ultimately between Brad Booth and Erick Lindgren. Booth made trip fours on the river and made a sizable bet.

Lindgren faces a decision of what to do. He had flopped top pair of jacks and was ahead most of the hand. He was deciding whether to fold or call the big bet. Based on the betting in the hand, Lindgren believed he was facing either a straight, trip fours, or a pure bluff. Lindgren was thinking, “Does Booth have the goods or is he bluffing?”

Lindgren contemplates the decision out loud, and Booth comes up with an interesting offer.

Erick Lindgren: Yukon Brad. You do bluff a lot…If you show me one card, I’ll probably call it. Show me one card.

Brad Booth: places his card on the table Pick one card! Point to a card!

Erick Lindgren: You have a five and a six [making a straight] in your hand. Show me that card right there!

Brad Booth: shows the King of diamonds

Erick Lindgren: Alright, you win. makes the call.

Brad Booth: flips over king, happy Lindgren picked wrong card. I so knew he was picking this one.

While Booth was enjoying his victory and Lindgren analyzing his loss, other players started chiming in with their analyses:

Antonio Esfandiari: Do you know what a genius he is? [Booth] knew he wasn’t going to get paid off, so he took a fifty-fifty shot of getting paid off, and it went from like twenty percent to fifty percent.

…

Brad Booth: But it’s more than fifty-fifty because I think more than 70 percent of the time he’s going to pick the one here [to his right] … because he’s right handed. Generally if you’re right handed you pick the thing on the right.

I’m not sure Booth is correct about the right-handed psychology, but I do think Booth used a fun strategy of surprise. Booth was acting overly strong on the river which is what made Lindgren suspicious. When he offered to show a card, it was even more suspicious–why show a card that ruins your chance of a payout? Lindgren suspected all this acting meant Booth was weak so he called.

Quite the display of strategy, I think. Though notably the commentator was less enthused, saying “Brad [Booth] just gave us a glimpse of pure genius or dumb luck, still not sure which of the two.”

From 11pm to midnight every 5th drink each bartender serves will be free. That means if the person before you orders four drinks, you win. Doesn’t matter if it’s top shelf: gratis. (You still have to tip though, you cheap bastards.)

All attempts to game the system are welcome. [via Chapman/Chapman]

How would you maximize your free drinks?

I have yet to work out an optimal strategy, but here are a few of my thoughts.

Case 1: you know the last person’s order

You could eavesdrop on orders to try to game the system. Let’s say you can hear the order of the person ahead of you. You know how many drinks ordered and whether any of them is free.

In this situation, there is a way to improve your odds. You wait until someone orders k < 5 drinks, none of which are free, and then make your order at least 5 - k drinks. If the person ahead of you paid full price for two drinks, for instance, then you can order three and guarantee yourself a free drink. This improves your discount from 20 percent (one out of five) to 33 percent (one out of three).

You could further exploit the position by choosing expensive, top-shelf liquors.

Case 2: position is unknown

In a busy bar, you may not be able to know your position. The bartender might fulfill a bunch of orders at the other side of the bar–some drinks being free–but you can’t tell because people have tabs and they are tipping anyway. Your drink might be the 5th (free), 4th, 3rd, 2nd, or 1st in the queue.

In this case, it’s advantageous to make large orders with friends. If you just order one of two drinks, you may not get a free drink at all. If you order 5, however, you can be sure you’ll get a free drink. If you’re lucky, you could even get two drinks free by ordering six (if your drinks are the sequence 5-6-7-8-9-10, then the first and last would be free).

Of course, everyone would be thinking along similar lines. I would think most people would order five drinks at a time, eliminating any positional advantage for the next order.

Notice this encourages more people to order drinks–seems like a good game for the bar!

What are your thoughts?

How can you maximize your free drinks in the two cases of knowing and not knowing your position?

Have you ever been in a bar with a free drink promotion like this?

What other free drinks schedules could generate revenues? Dan points out a random free drink schedule could generate more drink orders, but it might anger drunk people and not be worth it.

The first part is my favorite segment of the tournament. There are always quality matches, and every game affects a teams chance to advance.

In case you’re unfamiliar, the first part is known as the group stage. There are four teams in each group that play each other in a round robin tournament. A team gets three points for a win, one point for a draw, and no points for a loss. The top two teams advance past the group stage and the bracket continues with single-elimination games.

The most exciting part is the final day of the group coverage. All four teams in the group play simultaneously and each team cares not only about its performance but also the result of the other match which can affect their chances of advancing. Often a team can celebrate even in loss. In 2002 the U.S. squad lost its match to Poland but ended up advancing anyway since South Korea beat the favored Portugal squad.

And yet, it was not always this way.

Through 1982 the final group stage matches were not played simultaneously and they were played sequentially. Certain matches happened first and that gave some teams perverse incentives to perform. Someone was going to game the rules and make an embarrassment of the World Cup.

An infamous example

That someone was the West Germany squad. The apparent match-fixing is described on Wikipedia:

A more recent example occurred in the 1982 FIFA World Cup, West Germany played Austria in the last match of group B. A West German victory by 1 or 2 goals would result in both teams advancing; any less and Germany was out; any more and Austria was out (and replaced by Algeria, who had just beaten Chile). West Germany attacked hard and scored after 10 minutes. Afterwards, the players then proceeded to just kick the ball around aimlessly for the remainder of the match. Algerian supporters were so angered that they waved banknotes at the players, while a German fan burned his German flag in disgust. By the second half, the ARD commentator Eberhard Stanjek refused any further comment on the game, while the Austrian television commentator Robert Seeger advised viewers to switch off their sets.

Highlights of the match

Someone uploaded a video with highlights of the match so you can see how West Germany gave a poor effort after the first goal:

Link to Youtube video

Even the commentator was disgusted on the spot. Here’s a quote from the video:

Players on both teams made little attempt to attack, or shoot, or tackle, and indeed there wasn’t a single efforted goal. The crowd, not surprisingly, reacted angrily, shouting “surrender” and “cowards”…

It is difficult to prove that 22 footballers weren’t trying, or that these two countries might have gotten together and decided that a one-nil scoreline was in their best interest for both of them, but that is certainly the way it looked.

And it is difficult to imagine that FIFA won’t do something to stamp out the memory of an afternoon that was an insult to the crowd and an embarrassment to football.

FIFA takes action

FIFA saw a bad situation and realized it had to take drastic action.

Rather than tweaking some minor rule or implementing an unenforceable penalty on bad play, it decided used the powerful tactic of changing the game.

FIFA scheduled the tournament’s last matches of group play so that all teams played simultaneously. And thus we have our current format which tries to preserve fairness and leads to some fantastic soccer games.