Here’s a fun little brain teaser. There are two cakes of the same size, a chocolate cake and a strawberry cake. Ted and Kim are planning to share each of the cakes, but being the perfectly rational greedy agents they are in an imaginary universe contrived in the twisted mind of a puzzle maker, they both want to divide the cakes in a creative way, and they each want as much cake for themselves as possible, no compromises.

Ted proposes a plan. He says,

“I’m going to cut the first cake into two pieces, and after you see the cut, you get to decide which one of us gets the larger slice. Then I’ll cut the second cake, the person who got the smaller slice of the first cake gets to have the larger slice of the second cake”

Is this a good deal for Kim? If so, what should she do to maximize the amount of cake she gets? If not, what can Ted do to maximize the amount of cake he gets?

NOTE: Yes, this is what I can remember of an exam problem, if you did this subject with me and know the answer, please let some other people have a go before answering.

I’ll post the answer in a few days

UPDATE: The solution is in the comments!