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wedrifid comments on Econ/Game theory question - Less Wrong Discussion

12 Post author: Psychohistorian 11 May 2011 08:17PM

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Comment author: wedrifid 12 May 2011 10:38:49AM *  -1 points [-]

Are we assuming that the two players have perfect knowledge of each others' prices?

A and B know each others costs and values.

That is a yes.

If A has something that B values at that price, and that can't be gotten anywhere else, he will charge what the market will bear; and the market will bear 500k, because that's what the phrase "B values the access at 500k" means.

This is not the case. In this scenario there is no special privilege for the resource that happens to be the service over the resource that happens to be money - the 'seller' doesn't arbitrarily get to dominate.

Comment author: RolfAndreassen 12 May 2011 04:43:26PM 1 point [-]

no special privilege for the resource that happens to be the service

I don't understand why this should be the case. Presumably A has other sources of money, but B has no other sources of access; unless you are specifying otherwise, there is an obvious asymmetry. If the situation is intended to be symmetric, the example is a bad one; it is cross-grained to well-established intuition about how money works.

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