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To each person participating in the transaction, it's a net zero transaction. Person A values the item they're getting more than the item they've giving, but th
by pwinnski 6y ago
To each person participating in the transaction, it's a net zero transaction. Person A values the item they're getting more than the item they've giving, but that also means they believe that Person B is getting the short end of the stick. So +1 for Person A is -1 for Person B. However, Person B obviously feels the opposite, as if +1 for Person B is -1 for Person A.
An outsider, Person C, might say that each of them has given up a fruit (-1), and gained a fruit (+1), so both Person A and Person B end up at 0. This is the point the writer was making.
- gweinberg 6y agoNo, each person does not believe the other person is getting the shorty end of the stick. They have different preferences, they both know this, so they both know that they are both better off after the exchange. The third party know this also.