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I assume that the host does that because he wants the best chance of having a bunch of really good stories.
The way I see it, the host was going to be hanging out with these people for quite a long time on the way to Canterbury for the pilgrimage and on the way back. Imagine how boring that would have been back in the days of now portable DVD players or iPods or anything.
So the host wants to be entertained. I think he figures that he'll get better stories and be more entertained if he offers a prize.
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