This episode explores the problem of fairly allocating a scarce resource—farm-fresh eggs—among a group of colleagues, given a fixed low price set by the egg supplier (a colleague with backyard chickens). Against the backdrop of a nationwide egg shortage, the hosts initially propose auctioning or using a lottery system, but the egg supplier rejects these options, preferring a more equitable solution. More significantly, the podcast delves into alternative methods, employing a blind survey technique from market research to gauge egg preference without revealing the true purpose. For instance, the survey disguised eggs among other breakfast items, forcing participants to make trade-offs and revealing a clear "egg lover" who received the first dozen eggs. However, this method's limitations lead to the exploration of the Becker-DeGroote-Marshak (BDM) method, a technique that incentivizes honest reporting of willingness to pay. The hosts then apply this method in a game-show format, revealing that one colleague's exceptionally high willingness to pay for a single egg ultimately secured them a dozen at the fixed low price. This highlights the complexities of resource allocation even in seemingly simple scenarios and demonstrates the power of economic techniques in revealing true preferences.
