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The person who bought the painting is not losing millions of dollars, only failing to gain them. Unless of course the original price they paid for the painting
by an_ko 10y ago
The person who bought the painting is not losing millions of dollars, only failing to gain them.
Unless of course the original price they paid for the painting was millions of dollars. I doubt that, given they bought it off of a 17-year-old fresh out of prison.
By the time the case is over, they'll probably be in the negative. Pure sunk cost fallacy.
- intopieces 10y ago>Unless of course the original price they paid for the painting was millions of dollars. The retired corrections officer, Robert Fletcher, 62, said he bought the painting for $100 from a man named Pete Doige (spelled with an e), whom he met in 1975 in Thunder Bay, Ontario. But that's beside the point. If it's worth $Xm, it can be used as collateral for a loan. And it's probably also insured for a certain amount.
- rdtsc 10y agoIt is up to the loan company then to ascertain if it is worth that much, let them sue the artist. > If it's worth $Xm, it can be used as collateral for a loan It is worth only that much if it is authentic. The "if" is pretty big it seems.
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- chimeracoder 10y ago> The person who bought the painting is not losing millions of dollars, only failing to gain them. By the time the case is over, they'll probably be in the negative. Pure sunk cost fallacy This is an example of the endowment effect (fear of losing value that one perceives to already have), not sunk cost. Sunk cost would be if they continue the trial based on the amount of money they have already spent in fees, as opposed to the money they believe they can recoup later. (Even that isn't necessarily sunk cost, because legal fees can be covered by the losing party in egregious cases, though that's unlikely here).
- icebraining 10y agoThe person who bought the painting is not losing millions of dollars, only failing to gain them. Economically, there's little difference.
- chimeracoder 10y ago> Economically, there's little difference. There's a difference economically, because the derivative of marginal utility with respect to income is (generally) negative. In other words, utility is concave with respect to the origin[0]. This makes a difference because, in many circumstances, people are more willing to insure against loss than they are to insure against gain. It also makes difference legally, as well as financially, because assets can be used to collateralize loans, etc. [0](That's the first derivative of marginal utility, which is the second derivative of the income-utility function).
- cpncrunch 10y ago>It also makes difference legally, as well as financially, because assets can be used to collateralize loans, etc. But how will that make a difference legally in this court case ?
- theseatoms 10y ago> There's a difference economically, because the derivative of marginal utility with respect to income is (generally) negative. In other words, utility is concave with respect to the origin[0]. Sure.. many economic models make this simplifying assumption. But each man defines his own utility functions, by their very nature.
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