3 ms·

It's mutually assured destruction within a specific deal, not within their biological lives (like in case of a military doctrine). This allows maintaining an eq

It's mutually assured destruction within a specific deal, not within their biological lives (like in case of a military doctrine). This allows maintaining an equilibrium. Regardless of our wealth, we both put in 1 BTC before trading something worth 1 BTC. Maybe the name is not perfect, but it's quite close to what NashX provides.

moocowduckquack 13y ago
It isn't in equilibrium though unless each party knows how much that 1BTC is worth to the other party. Knowledge of the other person's wealth is vital in this, otherwise it is just an abuse of terminology. Just as in the case that MAD is not in equilibrium unless both parties have extensive and reliable knowledge about the nuclear capabilities and procedures of the other, so this is not in equilibrium if there is any doubt about either what the financial capabilities of the other party are, or if there are doubts about what your item is worth to them personally. Also, the whole thing is a bit odd anyway as it is using a currency to facilitate a direct barter. I am trying to think of situations where someone would want to do a direct swap and use something like this to insure it. Bob's worst scenario is no item and no money, with Alice getting both items and no money and Bob has no idea beyond Alice's say-so whether Alice values both items more than the money. So for low value items, this would seem silly as it would be better to just risk the item rather than the item plus some money, but the higher the value of the item, the higher the risk of miscalculating the funds required to secure the transaction.
- oleganza 13y ago
  > It isn't in equilibrium though unless each party knows how much that 1BTC is worth to the other party. Strictly speaking, one can never possibly know other person's "real" valuation. People can always lie to themselves and change their mind. The only way we can know how much 1 BTC is worth is by seeing a successful 1 BTC transaction. > Also, the whole thing is a bit odd anyway as it is using a currency to facilitate a direct barter. There's nothing odd. If I want to exchange my bike for an iPhone, I have to be very lucky to find someone who wants my bike and does not want his iPhone. That's why we all use money, it's the most marketable product — you can sell it to anyone. > Bob's worst scenario is no item and no money, with Alice getting both items and no money and Bob has no idea beyond Alice's say-so whether Alice values both items more than the money. This is fixed easily by having insurance deposit 1.5x or higher that of the price. So Alice is motivated to pay the bill to release higher amount.

moocowduckquack 13y ago

It isn't in equilibrium though unless each party knows how much that 1BTC is worth to the other party. Knowledge of the other person's wealth is vital in this, otherwise it is just an abuse of terminology. Just as in the case that MAD is not in equilibrium unless both parties have extensive and reliable knowledge about the nuclear capabilities and procedures of the other, so this is not in equilibrium if there is any doubt about either what the financial capabilities of the other party are, or if there are doubts about what your item is worth to them personally. Also, the whole thing is a bit odd anyway as it is using a currency to facilitate a direct barter. I am trying to think of situations where someone would want to do a direct swap and use something like this to insure it. Bob's worst scenario is no item and no money, with Alice getting both items and no money and Bob has no idea beyond Alice's say-so whether Alice values both items more than the money. So for low value items, this would seem silly as it would be better to just risk the item rather than the item plus some money, but the higher the value of the item, the higher the risk of miscalculating the funds required to secure the transaction.

oleganza 13y ago
> It isn't in equilibrium though unless each party knows how much that 1BTC is worth to the other party. Strictly speaking, one can never possibly know other person's "real" valuation. People can always lie to themselves and change their mind. The only way we can know how much 1 BTC is worth is by seeing a successful 1 BTC transaction. > Also, the whole thing is a bit odd anyway as it is using a currency to facilitate a direct barter. There's nothing odd. If I want to exchange my bike for an iPhone, I have to be very lucky to find someone who wants my bike and does not want his iPhone. That's why we all use money, it's the most marketable product — you can sell it to anyone. > Bob's worst scenario is no item and no money, with Alice getting both items and no money and Bob has no idea beyond Alice's say-so whether Alice values both items more than the money. This is fixed easily by having insurance deposit 1.5x or higher that of the price. So Alice is motivated to pay the bill to release higher amount.