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Two people engaging in consensual trade would be better off by the definition of trade. The judges are keeping them unhappy in the name of “fairness”, but is i

Two people engaging in consensual trade would be better off by the definition of trade. The judges are keeping them unhappy in the name of “fairness”, but is it fair that this exchange among willing individuals is forbidden? This can be reduced to an argument against free trade, because scarcity makes things unfair to those who can’t engage in the trade, which in my opinion is absurd.

danharaj 8y ago
> Two people engaging in consensual trade would be better off by the definition of trade. No, the definition of consensual trade is that they would think they were better off. That people know their exact preferences and calculate with ease whether a transaction brings them closer to those preferences is a charade. > The judges are keeping them unhappy in the name of “fairness”, but is it fair that this exchange among willing individuals is forbidden? If you only focus on the individual level, maybe. But it's at least plausible that preventing locally favorable actions can create globally superior conditions for everyone in aggregate. This is obvious and arguments that center on "two individuals engaging in consensual trade" are trying to distract from that fundamental aspect of reality, either knowingly or unknowingly.
- andrenth 8y ago
  So when you buy a discounted item is it a charade? How can two people being prevented to perform an exchange make things better globally? I don’t think that obvious at all. In fact allowing the exchange will make things better globally, by definition, because more people will be better off, while no one not engaging in the exchange will be worse off (unless you consider maybe envy).
  - philipkglass 8y ago
    Consider people who buy concert tickets and immediately resell them at higher than retail prices. I don't personally object to that, but I note that it makes a lot of people angry. It's not terribly clear that it makes things "better globally, by definition" either. The same number of people get to attend the concert with or without resellers. The band and the venue don't get any more money with resellers in play. The only set of people really better off are the resellers, who strategically mimic interest in attending but immediately trade their dozens of tickets for more money. That's a very narrow, rather than global, improvement from strategic trading. The same possible dynamic with schools is, according to the article, one reason school trades aren't allowed. Strategizing traders could mimic interest in attending popular school X, but really intend to trade a school X place for their true preference later. Everyone who isn't strategizing that way is worse-off or no-better-off when the strategic behavior is allowed. Note that more complex rules with more potential for strategizing don't just inconvenience individuals. More complex tax codes or regulatory codes, too, tend to disadvantage e.g. small businesses that can't afford legal teams to strategically take advantage of non-obvious consequences of the rules. The small businesses aren't "envious" that bigger ones have a higher laywer-to-engineer ratio. Small business employees aren't necessarily any more foolish than big-co employees, except in specific matters of legal interpretation and strategizing. They just want less exploitable rules so that facially-optimal and actually-optimal behaviors stay closer to each other.
    - dnautics 8y ago
      >The band and the venue don't get any more money with resellers in play. That's true, but the existence of resellers signals that the band and the venue could have made more money by structuring their prices differently
  - danharaj 8y ago
    > So when you buy a discounted item is it a charade? It being valid in one instance does not justify it at every instance. > How can two people being prevented to perform an exchange make things better globally? I don’t think that obvious at all. It is an instance of an optimization problem. It is algorithmically true that there are instances of optimization problems where local strategies, e.g hill climbing or trade between individuals, can only find local optima. Since the real world is far more complicated than any particular optimization problem... This does not even touch market failures such as externalities where exchange isn't even aware of all the interested parties involved. Frankly, this whole business about trade being better than any other way of distributing resources is so naive it boggles the mind how it can be such a widespread meme. Except, of course, for the fact that millions of dollars of propaganda are pumped into it by institutions far larger than individuals who have an interest in individuals thinking they're playing the same game and it's the best game in town.
    - andrenth 8y ago
      First consider that students switching schools also can’t be sure their choice is better (what if there’s a bully who will make their life horrible in their preferred school?). So even your premise that “trade is not valid if both parts know they’re getting a good deal” (which makes little if any sense) does not apply here. You follow with angry anti-market rethoric but you never explain how a number of people trading places in schools, according to their own interest, makes anything worse for those not involved in an exchange.
      - danharaj 8y ago
        > So even your premise that “trade is not valid if both parts know they’re getting a good deal” (which makes little if any sense) does not apply here. Your assertion that trade always implies that both parties are better off is just wrong, that's my only point. That you build an ideology around that premise is none of my business; I didn't propose any normative philosophy about trade. > You follow with angry anti-market rethoric but you never explain how a number of people trading places in schools, according to their own interest, makes anything worse for those not involved in an exchange. I just pointed out that the premise to your reasoning did not really hold. If the premise doesn't hold then your position might be justified, but it hasn't been justified. If you can't entertain the possibility that you're wrong, then I don't know what to say; perhaps peruse the other lines of reasoning that were considered in this submission's comments? P.S. just because i'm dismissive doesn't mean i'm angry
  - BrandonM 8y ago
    A lot of this stuff people are asking about was literally in the article. They want to incentivize students to rank their true preferences rather than strategizing. If you can trade, then the right strategy is to rank the most popular school first so that you can trade it for the school you actually want.
gpvos 8y ago
The point is that if you allow swapping, people will change their behaviour regarding for which schools they will initially enroll. They will, essentially, start gambling with very incomplete information, and many will be worse off. I've been to a presentation by the Amsterdam civil servants who set this up, and they have run lots of simulations with several systems, and also compared the actual outcome of the current system with that of the previous ones. While some of the requirements one might want are logically incompatible, the current system does satisfy the requirements that, as far as I can see, most Dutch people would find the most important. Whichever way you decide, it's a policy decision. Besides, free trade is always regulated in order for the market to function well.
- conanbatt 8y ago
  Very unconvinced with the notion that the parents of kids are unable to make school choices, and that removing the choice altogether gives better results. I believe it gives a high level of heterogeneity that the Dutch might not want to tolerate, but it does not give superior school choices. Removing choices sometimes do help to choose better, but generally the more choices the better. Lets not put Dutch policy in a pedestal: they have a retirement system that is so pervasive, that once you are 60, you earn more money by retiring than by continuing to work, and thus literally push the entire population to retire at the same age.
  - Scarblac 8y ago
    > they have a retirement system that is so pervasive, that once you are 60, you earn more money by retiring than by continuing to work, and thus literally push the entire population to retire at the same age. You don't get paid retirement money unless you are of retirement age. That is 68 at the moment, and increasing. And then, you get the money regardless of whether you're still working (most people stop).
    - conanbatt 8y ago
      I just googled the netherlands and I see a completely different system than the one I was told about. I completely retract the reference.
zizek23 8y ago
This is a significant misrepresentation of the issue. The judge gave multiple reasons of which fairness was only one. The other was it encourages strategizing in future lotteries as students will select spots that are 'good trading material' rather than their first choices which would undermine the whole system.
- gowld 8y ago
  How would that undermine the system? There is a lottery, that's a given. The inequity is built into the system. Why should the judges artificially devalue the lotteried objects, making everyone worse off on average?
smallnamespace 8y ago
> Two people engaging in consensual trade would be better off by the definition of trade. Not if their swap implicitly makes everyone else worse off though; and this is precisely the claim that judges make, that you cannot simply isolate the effects of the swap without considering the global consequences of the state of the 'game', so to speak.
- andrenth 8y ago
  No one is worse off by others’ exchange, they’re the same as before.
  - dctoedt 8y ago
    > No one is worse off by others’ exchange, they’re the same as before. Not necessarily. Second-order global effects need to be considered as well.
    - andrenth 8y ago
      Please be specific. What are these effects?
      - dctoedt 8y ago
        For example: Externalities — https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality Instrumental rationality — https://en.wikipedia.org/wiki/Instrumental_and_value_rationality https://en.wikipedia.org/wiki/Instrumental_and_value_rationa... Cognitive biases of various flavors — https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring
        andrenth 8y ago
        Again, please be specific. You trade places with someone else. Now you're on your preferred school and so is the person you traded with. I wasn't able to trade, therefore I'm in the school I was assigned by the lottery. My situation is exactly the same whether you traded your place or not. How can it possibly be worse? And the global consequences, which seem to be the main concern here, has clearly improved, as more people are happier in their preferred schools.
akie 8y ago
Not everything should be organized according to market theories.
- andrenth 8y ago
  Please explain why not doing so in this specific example would not be beneficial.
  - akie 8y ago
    Allowing two students to swap would create incentives that will undermine the fairness of the system, thereby creating unfair situations a few years down the road. Highly educated parents and rich parents are more likely to complain, and by complaining they would be rewarded with a higher chance of their kid getting into a good school. Schools are funded with public money, and getting into a good school should be equally achievable to everyone (regardless of the background of their parents). That's why swapping places was forbidden. It's about the system's integrity and the system's fairness, not about the individual outcomes.

danharaj 8y ago

> Two people engaging in consensual trade would be better off by the definition of trade. No, the definition of consensual trade is that they would think they were better off. That people know their exact preferences and calculate with ease whether a transaction brings them closer to those preferences is a charade. > The judges are keeping them unhappy in the name of “fairness”, but is it fair that this exchange among willing individuals is forbidden? If you only focus on the individual level, maybe. But it's at least plausible that preventing locally favorable actions can create globally superior conditions for everyone in aggregate. This is obvious and arguments that center on "two individuals engaging in consensual trade" are trying to distract from that fundamental aspect of reality, either knowingly or unknowingly.

andrenth 8y ago
So when you buy a discounted item is it a charade? How can two people being prevented to perform an exchange make things better globally? I don’t think that obvious at all. In fact allowing the exchange will make things better globally, by definition, because more people will be better off, while no one not engaging in the exchange will be worse off (unless you consider maybe envy).
- philipkglass 8y ago
  Consider people who buy concert tickets and immediately resell them at higher than retail prices. I don't personally object to that, but I note that it makes a lot of people angry. It's not terribly clear that it makes things "better globally, by definition" either. The same number of people get to attend the concert with or without resellers. The band and the venue don't get any more money with resellers in play. The only set of people really better off are the resellers, who strategically mimic interest in attending but immediately trade their dozens of tickets for more money. That's a very narrow, rather than global, improvement from strategic trading. The same possible dynamic with schools is, according to the article, one reason school trades aren't allowed. Strategizing traders could mimic interest in attending popular school X, but really intend to trade a school X place for their true preference later. Everyone who isn't strategizing that way is worse-off or no-better-off when the strategic behavior is allowed. Note that more complex rules with more potential for strategizing don't just inconvenience individuals. More complex tax codes or regulatory codes, too, tend to disadvantage e.g. small businesses that can't afford legal teams to strategically take advantage of non-obvious consequences of the rules. The small businesses aren't "envious" that bigger ones have a higher laywer-to-engineer ratio. Small business employees aren't necessarily any more foolish than big-co employees, except in specific matters of legal interpretation and strategizing. They just want less exploitable rules so that facially-optimal and actually-optimal behaviors stay closer to each other.
  - dnautics 8y ago
    >The band and the venue don't get any more money with resellers in play. That's true, but the existence of resellers signals that the band and the venue could have made more money by structuring their prices differently
- danharaj 8y ago
  > So when you buy a discounted item is it a charade? It being valid in one instance does not justify it at every instance. > How can two people being prevented to perform an exchange make things better globally? I don’t think that obvious at all. It is an instance of an optimization problem. It is algorithmically true that there are instances of optimization problems where local strategies, e.g hill climbing or trade between individuals, can only find local optima. Since the real world is far more complicated than any particular optimization problem... This does not even touch market failures such as externalities where exchange isn't even aware of all the interested parties involved. Frankly, this whole business about trade being better than any other way of distributing resources is so naive it boggles the mind how it can be such a widespread meme. Except, of course, for the fact that millions of dollars of propaganda are pumped into it by institutions far larger than individuals who have an interest in individuals thinking they're playing the same game and it's the best game in town.
  - andrenth 8y ago
    First consider that students switching schools also can’t be sure their choice is better (what if there’s a bully who will make their life horrible in their preferred school?). So even your premise that “trade is not valid if both parts know they’re getting a good deal” (which makes little if any sense) does not apply here. You follow with angry anti-market rethoric but you never explain how a number of people trading places in schools, according to their own interest, makes anything worse for those not involved in an exchange.
    - danharaj 8y ago
      > So even your premise that “trade is not valid if both parts know they’re getting a good deal” (which makes little if any sense) does not apply here. Your assertion that trade always implies that both parties are better off is just wrong, that's my only point. That you build an ideology around that premise is none of my business; I didn't propose any normative philosophy about trade. > You follow with angry anti-market rethoric but you never explain how a number of people trading places in schools, according to their own interest, makes anything worse for those not involved in an exchange. I just pointed out that the premise to your reasoning did not really hold. If the premise doesn't hold then your position might be justified, but it hasn't been justified. If you can't entertain the possibility that you're wrong, then I don't know what to say; perhaps peruse the other lines of reasoning that were considered in this submission's comments? P.S. just because i'm dismissive doesn't mean i'm angry
- BrandonM 8y ago
  A lot of this stuff people are asking about was literally in the article. They want to incentivize students to rank their true preferences rather than strategizing. If you can trade, then the right strategy is to rank the most popular school first so that you can trade it for the school you actually want.

gpvos 8y ago

The point is that if you allow swapping, people will change their behaviour regarding for which schools they will initially enroll. They will, essentially, start gambling with very incomplete information, and many will be worse off. I've been to a presentation by the Amsterdam civil servants who set this up, and they have run lots of simulations with several systems, and also compared the actual outcome of the current system with that of the previous ones. While some of the requirements one might want are logically incompatible, the current system does satisfy the requirements that, as far as I can see, most Dutch people would find the most important. Whichever way you decide, it's a policy decision. Besides, free trade is always regulated in order for the market to function well.

conanbatt 8y ago
Very unconvinced with the notion that the parents of kids are unable to make school choices, and that removing the choice altogether gives better results. I believe it gives a high level of heterogeneity that the Dutch might not want to tolerate, but it does not give superior school choices. Removing choices sometimes do help to choose better, but generally the more choices the better. Lets not put Dutch policy in a pedestal: they have a retirement system that is so pervasive, that once you are 60, you earn more money by retiring than by continuing to work, and thus literally push the entire population to retire at the same age.
- Scarblac 8y ago
  > they have a retirement system that is so pervasive, that once you are 60, you earn more money by retiring than by continuing to work, and thus literally push the entire population to retire at the same age. You don't get paid retirement money unless you are of retirement age. That is 68 at the moment, and increasing. And then, you get the money regardless of whether you're still working (most people stop).
  - conanbatt 8y ago
    I just googled the netherlands and I see a completely different system than the one I was told about. I completely retract the reference.

zizek23 8y ago

This is a significant misrepresentation of the issue. The judge gave multiple reasons of which fairness was only one. The other was it encourages strategizing in future lotteries as students will select spots that are 'good trading material' rather than their first choices which would undermine the whole system.

gowld 8y ago
How would that undermine the system? There is a lottery, that's a given. The inequity is built into the system. Why should the judges artificially devalue the lotteried objects, making everyone worse off on average?

smallnamespace 8y ago

> Two people engaging in consensual trade would be better off by the definition of trade. Not if their swap implicitly makes everyone else worse off though; and this is precisely the claim that judges make, that you cannot simply isolate the effects of the swap without considering the global consequences of the state of the 'game', so to speak.

andrenth 8y ago
No one is worse off by others’ exchange, they’re the same as before.
- dctoedt 8y ago
  > No one is worse off by others’ exchange, they’re the same as before. Not necessarily. Second-order global effects need to be considered as well.
  - andrenth 8y ago
    Please be specific. What are these effects?
    - dctoedt 8y ago
      For example: Externalities — https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality Instrumental rationality — https://en.wikipedia.org/wiki/Instrumental_and_value_rationality https://en.wikipedia.org/wiki/Instrumental_and_value_rationa... Cognitive biases of various flavors — https://en.wikipedia.org/wiki/Anchoring https://en.wikipedia.org/wiki/Anchoring
      - andrenth 8y ago
        Again, please be specific. You trade places with someone else. Now you're on your preferred school and so is the person you traded with. I wasn't able to trade, therefore I'm in the school I was assigned by the lottery. My situation is exactly the same whether you traded your place or not. How can it possibly be worse? And the global consequences, which seem to be the main concern here, has clearly improved, as more people are happier in their preferred schools.

akie 8y ago

Not everything should be organized according to market theories.

andrenth 8y ago
Please explain why not doing so in this specific example would not be beneficial.
- akie 8y ago
  Allowing two students to swap would create incentives that will undermine the fairness of the system, thereby creating unfair situations a few years down the road. Highly educated parents and rich parents are more likely to complain, and by complaining they would be rewarded with a higher chance of their kid getting into a good school. Schools are funded with public money, and getting into a good school should be equally achievable to everyone (regardless of the background of their parents). That's why swapping places was forbidden. It's about the system's integrity and the system's fairness, not about the individual outcomes.