tag:blogger.com,1999:blog-2098432983500045934.post8502960600183203466..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Fair coin, foul outcomeThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2098432983500045934.post-22525952847684373732017-11-02T05:21:33.293-04:002017-11-02T05:21:33.293-04:00OT: "... almost all economic transactions inv...<br />OT: "... almost all economic transactions involve information asymmetries. Trash and treasure discussing to me means the seller does not understand the value the item has to the buyer."<br /><br />When I read that I thought: <i>like selling manhattan for $24</i>...<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-10809183294900498112017-10-30T09:51:26.610-04:002017-10-30T09:51:26.610-04:00The math is not the only thing that gets you.
As ...The math is not the only thing that gets you.<br /><br />As in most things not all the players are equal, coin toss analogies for win loss is a very rare event when it comes to wealth building.<br /><br />Asymmetric information exist and almost all economic transactions involve information asymmetries. <br /><br />Trash and treasure discussing to me means the seller does not understand the value the item has to the buyer. He is making a mistake due to his lack of knowledge of his buyer and what he is selling. <br /><br />I know people who make a great living exploiting asymmetric information for finding valuables buried in boxes of trash. <br /><br />When I play Hold'em at a table with out much information on the players, I have to assume your I am the worse player and stay away from the big stacks. I play the math more than the player.<br /><br />You only take them on when start to get information and behavior tells on the other players. Now you can play math and the player (Asymmetric information). It can make a coin flip decision into something more favorable to you. <br /><br />If you can not figure out who the fish is quit that table because it is you. <br /><br />People who spend 15% if their disposable income on lottery tickets comes to mind. You can not explain to them that they would be better off financially (accumulate wealth) if they just put that money in a bank savings account. Oilfield Trashhttps://www.blogger.com/profile/16151172995826850192noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-32857083960860983812017-10-28T12:43:21.124-04:002017-10-28T12:43:21.124-04:00" losing a few in a row will mean game over f..." losing a few in a row will mean game over for the poor guy.?"<br /><br />If the amount won/lost is 10% of the poor guy's net worth then he will always have 90% left so in theory he can never go broke. in practice, if the 90% left is less than a penny, he is broke. <br /><br />If however you make the amount won/lost 1% of the rich guy wealth then he might go broke if he loses the first 10 in a row, but if he wins half the first 10 and loses half, regardless of the order, the poor guy will win more than he loses. If he wins the first five then the 5 losses that follow will be smaller and if he loses the first five then the five wins that follow will be larger. Eventually yhe poor guy will become the rich guy.jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-30285969527709052642017-10-27T10:02:41.663-04:002017-10-27T10:02:41.663-04:00Jim, I don't think that's true at all. The...Jim, I don't think that's true at all. The poor guy will only have to lose a couple of coin tosses before he's out of the running entirely.<br /><br />(I think the "you win, I win, you win, I win" in Art's model is an important flaw, actually. It's an important part of how it works, that sometimes you win a few in a row, or you lose a few in a row. Because e.g. losing a few in a row will mean game over for the poor guy. So it's sort of only a matter of time until the poor guy loses, unless he gets extremely lucky.)<br /><br />All that (the model, etc) aside,<br />It seems obvious that, absent any rules, the big guy will beat the little guy. <br />That's why civilization needs some kind of rules.Jerrynoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-54304057237136566832017-10-27T09:23:16.483-04:002017-10-27T09:23:16.483-04:00Hi Art
I see several problems with this yard sale...Hi Art <br />I see several problems with this yard sale model<br /><br />Real yard sales are not zero sum.<br />The adage that prevails is 'one man's junk is another man's treasure" (implying both sides win). <br />It also should be noted that this YSM is an economic model for non-GDP transactions. Wealth generated by actual production of goods and services is ignored. <br /><br />Your analysis at the end exposes the fallacy of the conclusions derived from the model.<br />The reason the poor guy loses is that the amount won/lost on each transaction is a function of the poor guy's net worth.<br />If you change that assumption so that the amount won/lost is a function of the rich guy's wealth (let's say 1%) then I think you will find the rich guy getting poorer in the long run.jimnoreply@blogger.com