That Time Christie’s Auction House Made Millions of Dollars by Winning a a Game of Rock, Paper Scissors
While you’ve probably never heard of Maspro Denkoh, a Japanese company founded in 1952 that makes various TV reception equipment, among other things, they will likely forever be remembered in the annals of business lore thanks to a rather oddball decision made by Takashi Hashiyama- the man who would head the company for a little over half a century before his death in 2007 at the age of 76.
Over his years as president of the company, Hashiyama deciding to have the business buy various works of art to hang around, most notably in 1996 purchasing Les grands arbres au Jas de Bouffan by Paul Cézanne for $7.9 million (about $12.8 million today). Among many other works he collected over the years include Picasso’s Boulevard de Clichy and Van Goh’s Vue de la chambre de l’artiste, rue Lepic.
Fast-forward to 2004 and seeing an opportunity to make a rather tidy profit on the art work during a time when business was lagging a little, Hashiyama decided to auction off the art collection the company had accumulated.
While up to this point he had mostly dealt with famed British auction house Sotheby’s in acquiring various items, he also had a working relationship with the other of the Big Two auction houses, Christie’s, via Kanae Ishibashi, president of Christie’s Japan.
Naturally, when he approached the two auction houses about such an auction featuring so many valuable works of art, they both were eager to land the deal. As Christie’s deputy chairman Jonathan Rendell states, “The Maspro Denkoh Corporate Collection was a jewel in the crown. It had everything that one wanted to sell at that precise moment. You know, the Cezanne, the Picasso, the van Gogh – they’re trophy names.”
After spending time having their respective experts examine the collection and coming up with estimates, the two companies pitched Hashiyama on the various ways they’d promote the auction to maximize revenue, as well as outline their exact terms and how much he could expect to get from the auction. The result was that, at least to Hashiyama’s eyes, “[Both] companies were equally good and I just could not choose one…”
While it was an option to simply split the collection between the two, Hashiyama had little interest in this.
In similar situations where a decision needed to be made on something to which Hashiyama could not decide which path was best, he had a propensity to let the fates decide, using various games of chance. On that note, Ishibashi recounted a story Hashiyama once told her in one of their many meetings over the years, “[When] his company was listed in a stock market, which was a very, very important incident, he chose the insurance company by throwing dice….”
He notes of all this, “It probably looks strange to others. But I believe this is the best way to decide between two things which are equally good.”
And so it was that Hashiyama called the two auction houses and informed them of his decision. Said Ishibashi, “I received a call from Mr. Hashiyama in the office, and he said in order to determine which auction house to handle collection, I would like both of you – Christie’s and Sotheby’s – to play the game rock, paper, scissors.”
As you might imagine, the representatives at Christie’s and Sotheby’s weren’t exactly thrilled after countless meetings, flights by various representatives, and all the work they’d put into trying to land the deal.
As for Ishibashi’s immediate response, “I didn’t really reply back to him. I couldn’t really answer him, like, why are you doing this? And, you know, we can’t really do that. I couldn’t believe it.”
Nevertheless, as Rendell stated, “[When] a client asks you to do something, you just get on and do it… So we started compulsively playing rock, paper, scissors, trying to work out how do we win this? Is there some secret to this? How bad are you going to feel? How idiotic are you going to look in front of your colleagues when you’ve lost a collection for a child’s game?”
As for what representatives at Sotheby’s thought, they were decidedly less forthcoming on their opinions and process both before and after, other than their specialist in Impressionist and Modern Art, Blake Koh, simply saying, “There was some discussion, but this is a game of chance, so we didn’t really give it that much thought. We had no strategy in mind.”
In truth, while you might think Rock, Paper, Scissors is purely a game of chance, it turns out there are various strategies one can use to increase the odds of winning. For example, men are a few percentage points more likely to open with rock. Women, on the other hand, show a similar very slight percentage preference to scissors as an opening throw.
That said, according to the World Rock Paper Scissors Society (which is totally a thing), in tournaments featuring more seasoned players, the overall numbers come out to 35.4% rock, 35% paper, and 29.6% scissors, meaning among the “pros” scissors for whatever reason is markedly less popular and rock and paper about even.
Whatever you throw, another interesting trend was observed by Zhijian Wang and co. in their study, Cycle frequency in standard Rock-Paper-Scissors games: Evidence from experimental economics, done at Zhejiang University. In it, they found that if you win, you are likely to make the same choice the next time. If you lose, however, your are likely to choose the next item in the sequence from the one you just loss with. So, if you lost with rock, you are likely to choose paper the next time. If you lost with paper, you are more likely to throw scissors the next time.
Of course, in this case no amount of practice or research on Rock, Paper Scissors strategies helped Ishibashi. After all, this wasn’t a best of three type scenario- it was one and done, winner takes the deal, negating some of the strategies that could have been implemented to mildly improve odds.
And as for the fact that men tend to pick rock first and women scissors, this is only a very slight preference in each case, and is only terribly useful if playing someone who doesn’t also know that. If they know, and know you probably know, it becomes once again anybody’s guess what they’ll throw. The age-old iocane powder scenario, but with no way to rig the system in this case.
Ishibashi states of her experience preparing,
I don’t really remember those three days. I mean, I was under enormous pressure to think what would be the best strategy. But my struggle was always that I knew that there is no strategy because it’s just a pure chance. So constantly, whenever I had some moment on a train or walking in streets, I suddenly sort of thought about rock, paper, scissors. I had to contemplate between choices. I think it’s paper. No, no, no, I think it’s rock. Then I said, you know, no, no, no, no, I shouldn’t do it because there is no answer. There is no answer. Let’s stop. But then, even though I tried not to think about it, I couldn’t really forget about rock, paper, scissors from my mind.
At a loss for what to do, with literally millions of dollars on the line, she reached out to pretty much anyone she could for their input on what choice she should make.
It was during this process that her boss and Christie’s International Director of Impressionist and Modern Art Department, Nicholas Maclean, decided to ask his twin 11 year old daughters, Flora and Alice, what they would do. In his opinion, they were masters at Rock, Paper, Scissors, playing it all the time to decide all manner of things.
When the mirror twins (meaning identical twins but with various elements mirrored, for example in this case one is right handed and the other left) were consulted, they had a lot of input, as recounted from the following exchange between father and daughters during an interview with NPR several years later:
Nicholas: …they came back to me quite promptly and said, you know, Dad, everybody knows you start with scissors.
Alice: Yeah, scissors is the pretty standard move.
Nicholas: So I said, well, how does that work? And they said, well, most people like the idea of going with rock.
Alice: But because they were, like, super clever Sotheby’s, we’re like, oh, they’re going to bluff.Nicholas: But you then double bluff by going scissors, and scissors cuts paper. And I said, all right, that sounds good. I said, what if they go scissors? They said, you go scissors again.
Alice: Because that’s what I’d do.
Flora: Yeah. You just stick with scissors and see what happens.
Maclean then called up Ishibashi and recounted the exchange, leaving it up to her, but suggesting they go with scissors as, to quote Alice, “Everybody knows you go scissors.”
Ishibashi, however, was still distraught, stating,
I reached the point where the situation got beyond my capacity….I didn’t quite sleep [for] a few days, but on that Sunday evening, I slept for few hours. And then suddenly my husband came up in my dream. He said, Kanae, and he told me what choice I should come up with. Then I woke up, and I saw the window, and the sky was beginning to light up. I didn’t look at the time, but I felt really sort of refreshed. Somehow my husband’s voice [in my dream] really struck me, and I didn’t even think about… right or wrong… I would go for it.
Thus, that Monday morning, she and Rendell drove to Maspro headquarters just outside of Nagoya, Japan, with Ishibashi tight-lipped about her choice.
When they arrived, they were escorted up to the conference room, with two representatives from Sotheby’s already arrived. Rendell states,
I knew who they were. But it’s hardly the moment for, you know, “hi, how are you?” More sort of a grunt. So we sit one side of the table. They sit the other side of the table, and there are two accountants and a fax machine.
As for Rendell, he was still adamant that rock was the correct choice, being the strongest move, as recounted by Ishibashi, “Jonathan actually looked at me, and beneath the table, he showed me rock and – with his hand, and his eyes were very sharp, and he nodded to me once…”
Then Ishibashi picked up her pen and wrote her choice on the paper in front of her.
The two groups handed their respective papers to the accountants and waited. Said Rendell, “Looking at the face of the accountant holding the piece of paper, you could tell nothing. He was totally inscrutable. He looks at it for what was probably 30 seconds, and your heart’s in your mouth.”
Reviewing both notes, the accountant looked up and declared Sotheby had chosen paper. As for Ishibashi, she had decided to take the advice of Flora and Alice, her husband’s suggestion in her dream, as well as go with women’s apparent slight natural tendency- scissors.
Said Ishibashi of the event, “After we went outside of the building, we screamed!”
As for the Sotheby’s camp, they simply stated when asked for a quote by the media, “Sotheby’s never comments on collections it is not offering for sale.”
The total of all the items sold at the auction ended up being $17.8 million (about $23 million today), with reportedly around $1.9-$2.2 million ($2.5-$2.9 million today) going to Christie’s.
As for Alice and Flora, Alice’s original quote, “Everybody knows you go scissors” ended up in Time magazine’s quotes of the week shortly thereafter.
- That Surprisingly Recent Time British Husbands Sold Their Wives at Market
- The Founder of FedEx Once Saved the Company by Taking Its Last $5,000 and Turning It Into $32,000 by Gambling in Vegas
- What Happened to Howard Hughes’ Money After He Died
- The Engineer Who Bought Over 12,100 Cups Of Pudding to Earn 1.25 Million Air Miles
- How Were Kamikaze Pilots Chosen?
Prior to 1978, the airline industry was completely regulated by the government in the United States. As in, if a seat on a flight from Washington DC to New York City was a hundred dollars on United, it would be hundred dollars on Continental and American as well. Prices were the same for every airline due to federal regulations, as dictated by the Civil Aeronautics Board, because it was considered interstate commerce. That is unless the airline only flew within one state. That was the thinking behind Texas businessman Rollin King’s and lawyer Herb Kelleher’s creation of Air Southwest, which would later become Southwest Airlines. But, while actually pretty fascinating, we’re not here today to talk about the founding of the popular airline. Instead, we’re going to talk about a rather interesting event in their history.
From the beginning, Southwest Airlines, led by King and Kelleher, fostered it’s reputation as a fun and zany airline. Their lower prices helped with this. So did the (all-female) flight attendants wearing bright orange shorts and go-go boots. They also had a propensity for coming up with a myriad of pun-filled slogans, one of which “Just Plane Smart” they debuted on October 22, 1990.
They used that slogan for about 15 months until they got a call from Stevens Aviation in Greenville, South Carolina. Apparently, they had been using the slogan “Plane Smart” prior to Southwest.
You might think with two large companies in a tussel that a lot of lawyers were about to be able to buy those vacation homes they’d been dreaming about in Maui.
However, instead of spending hundreds of thousands of dollars on legal fees and letting the courts decide the matter, Stevens Aviation chairman Kurt Herwald (along with executive vice-president Stephen Townes) came up with an idea. They challenged the CEO of Southwest, Herb Kelleher, to an arm wrestling match for the rights to the slogan “Plane Smart.”
Kelleher excitedly accepted.
“Malice in Dallas” was to be held on March 20, 1992 at the famed wrestling forum, the Dallas Sportatrium in downtown Dallas.
Besides losing rights to the slogan, the loser of each round (it was going to be a best of three competition) would have to donate $5,000 to the Muscular Dystrophy Association or Ronald McDonald House of Cleveland.
The days leading up to the match-up, both companies heavily promoted it. Customers and well-wishers sent items to Kelleher that they thought would help him win, including a box of Wheaties, a can of spinach, a bottle of Wild Turkey, and “anabolic steroids from Mexico.”
Both men showed up to the ring at nine am on Friday, March 20th prepared to fight. They also made a spectacle out it. Herb Kelleher arrived in a bus with cheerleaders wearing a white satin robe. Kurt Herwald, when introduced, ran from the tunnel in a red robe with boos reigning down from the pro-Southwest crowd.
After Kelleher arrived in the ring to the “Rocky” theme song and pre-match tussling between the two corners died down, the competition began.
Immediately, Kelleher called in a “replacement” due to his “injured arm” that he suffered while allegedly saving a child’s life on his way to the arena. That replacement was J.R. Jones, the 1986 Texas arm wrestling champion. Jones and Southwest Airlines easily won the first around.
The second round, Herwald brought in a “ringer” as well, one of his employees – “Killer” Annette Coats. She faced off with Kelleher, even though his arm still “hurt.” Coats defeated him in a manner of seconds.
Now with theatrics out of the way, the real match began. The third round was perfectly set-up with a winner-take-all between the two faces of their companies. Herwald, in a red polo shirt, and Kelleher, with a cigarette hanging out of his mouth, locked arms in a dead heat for a solid 35 seconds.
Finally, Herwald pinned Kelleher’s arm for the win. Boos erupted from the crowd in Dallas, but Herwald won fair and square, meaning Stevens Aviation got to keep the slogan. But Kurt Herwald decided to do things a bit different one more time. He allowed Southwest to use the slogan too as a show of good sportsmanship and for Southwest’s willingness to accept such a crazy proposal in the first place when so many other companies would have simply gone to court.
Said Herwald after,
There’s too much litigation in business today and not enough leadership. We need more guys like Herb Kelleher who are willing to say we don’t need to go to court all the time.
Kelleher told the New York Times that if Stevens and Southwest went to court about this, it would have cost Southwest $500,000 and a few years to decide.
Both companies believe that the “Malice in Dallas” had much to do with their rise in profits directly after. Stevens Aviation, three years later, was making nearly four times as much as it did in 1992. Ed Stewart, manager of public relations for Southwest, estimated it at least generated six million dollars in publicity, and a mere year later Southwest’s stock prices had doubled. And to top it all, $15,000 got donated to charity between the three rounds.Expand for References
- Playing Rock Paper Scissors for $20 Million
- Maspro Corporate History
- Anything for the Client
- How Rock, Paper, Scissors Settled an Auction House Feud
- Scissors, Paper, Rock, a Strategy Game
- Rock Breaks Scissors
- Rock Paper Scissors Game Theory in Everyday Life
- How Two Major Companies Used an Arm Wrestling Match Instead of Litigation to Resolve a Dispute
|Share the Knowledge!|