Back when Jeopardy started, quiz shows were common, so they needed some sort of gimmick to stand out over all of the rest. Nowadays, it’s by far the most popular one, and so the gimmick isn’t needed any more, but it’s hung on through inertia.
Y’all are overthinking it. Player 3 has $8,400 and if they bet it all and win, they have $16,400. Player 2 bets $7,601 so if they also get it right, they’ll have $16,401. Player 1 doesn’t factor into this, other than for the others to think “If he’s right, he wins.”
This. Player 1 wins if they get the question right, so just remove that player from the pool and only bet enough to beat all-in from Player 3. That way, if everyone is wrong, there’s a chance to beat both by still having a little left in the kitty.
Where it fails is that if everyone gets it wrong (worst case winning scenario), Player 1 wouldn’t have lost enough to be lower than Player 2 unless he/she went for a greedy all-in style bet.
Ha! You’re right of course.
See Cliff Clavin’s Jeopardy appearance for an example of this in action. 
What was the clue? Not seeing it in this thread so far…
Category: British Authors
Born in 1866, he has been called “The Shakespeare of Science Fiction”
Incorrect answers:
(1st) Asimov (2nd) Verne (3rd) Clarke
Actual answer:
H.G. Wells
That was a super-easy FJ question. Even my wife got it right, and she hates SF.
Yeah and the guesses were terrible. For “British Authors” they guessed an American, a Frenchman, and a Brit born a generation and a half later.
I can understand the Jules Verne guess, it you just did a brain fart on the nationality part. As a kid I remember reading his books and saying his name in an anglicized way, I’m not sure I knew he was French until later. He otherwise comes close to fitting the bill.
I mean, I missed it too. The only guy I could come with that kind of sort of fit the bill was Sir Arthur Conan Doyle, which I was about 95% sure was wrong, but at least he’s British and fit the timing.
So the third place player pulled off a Bradbury maneuver; and on a science fiction question no less? That’s kind of awesome.
Getting the right answer is not quite the same thing as knowing the right answer. OTOH the questions the three contestants came up with were all silly.
the turn the answer into a question was a play on the quiz show scandals …merv Griffiths wife said “something like why not just give them the answer and make them figure out the question?”
it wasn’t successful the first time but in the 80s people wanted a smarter game show than wheel of fortune … so merv brought it back but it was competing with wheel so they packaged it together and then it took off