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The is a difference between the trade being zero sum, and the negotiation being zero sum. In the apple example, the trade is not zero sum, but the negotiation i
by benchaney 9y ago
The is a difference between the trade being zero sum, and the negotiation being zero sum. In the apple example, the trade is not zero sum, but the negotiation is. If I negotiate to spend less money for the same amount of apples, then the seller has lost as much as I gained. The caveat being that even in this simplified apple example there are multiple dimensions to negotiate on. I could buy more apples at a lower cost per apple, which may very well be benefit both parties.
- UncleEntity 9y ago> If I negotiate to spend less money for the same amount of apples, then the seller has lost as much as I gained. That assumes that apples have an intrinsic value above and beyond the value placed upon them by the two trading parties. Marginal utility and all that...
- benchaney 9y agoNo it doesn’t. All it assumes is that both parties prefer having more money to having less money.