There's no such thing as a free watch (2017) • Hacker News Board

Re: There's no such thing as a free watch (2017)

#91

Post by timr » Tue, Dec 18, 2018, 6:23 PM UTC

starbeast wrote: post #43

timr wrote: post #34

Earlier quoted context omitted.

"That is not a requirement for efficiency. Unknowns are factored into the price as "risk"." If someone is lying to you and you have no way of knowing it, there's no way to price the risk. Dishonesty can never be eliminated (that's software engineer pedantry) but it's always a drag on efficiency. People who don't trust each other don't engage in trade. "Risk is a perfectly normal characteristic of efficient markets, p…

>People who don't trust each other don't engage in trade. You are going to need one hell of a citation for that claim, or you are using some new definition of 'trust' that I have not previously encountered.

Saying "citation needed" doesn't work when it's one of the fundamentals of the field. But hey, Hackernews, I'll google it for you:

https://www.jstor.org/stable/41638856?seq=1#page_scan_tab_co...

http://econ.sciences-po.fr/sites/default/files/file/yann%20a...

https://voxeu.org/article/trust-and-economic-development

https://pdfs.semanticscholar.org/f7e3/e958b4b7387707a5ae32fa...

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2906280

http://www.oecd.org/innovation/research/1825662.pdf

https://www.parisschoolofeconomics.eu/IMG/pdf/Huck2.pdf

I stopped midway down the first page. But this quote is great, so I'll include it:

"Conjoint action is possible just in proportion as human beings can rely on each other. There are countries in Europe, of first-rate industrial capabilities, where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money."

- John Stuart Mill, Principles of Political Economy, 1848

Re: There's no such thing as a free watch (2017)

#92

Post by timr » Tue, Dec 18, 2018, 6:25 PM UTC

WalterBright wrote: post #55

timr wrote: post #34

Earlier quoted context omitted.

"That is not a requirement for efficiency. Unknowns are factored into the price as "risk"." If someone is lying to you and you have no way of knowing it, there's no way to price the risk. Dishonesty can never be eliminated (that's software engineer pedantry) but it's always a drag on efficiency. People who don't trust each other don't engage in trade. "Risk is a perfectly normal characteristic of efficient markets, p…

> People who don't trust each other don't engage in trade. They do all the time. It's just that the level of distrust is factored into the price. For example, you'll pay more money to buy a used car from a dealer than from a random person, and you'll pay more to buy from a reputable dealer. And it's why there are such things as cashier's checks, wire transfers, and escrow services. > Deception is not normal. It is no…

"It's just that the level of distrust is factored into the price."

Right. That's called "reduced economic efficiency".

Re: There's no such thing as a free watch (2017)

#93

Post by starbeast » Wed, Dec 19, 2018, 4:35 PM UTC

timr wrote: post #91

starbeast wrote: post #43

Earlier quoted context omitted.

>People who don't trust each other don't engage in trade. You are going to need one hell of a citation for that claim, or you are using some new definition of 'trust' that I have not previously encountered.

Saying "citation needed" doesn't work when it's one of the fundamentals of the field. But hey, Hackernews, I'll google it for you: https://www.jstor.org/stable/41638856?seq=1#page_scan_tab_co... http://econ.sciences-po.fr/sites/default/files/file/yann%20a... https://voxeu.org/article/trust-and-economic-development https://pdfs.semanticscholar.org/f7e3/e958b4b7387707a5ae32fa... https://papers.ssrn.com/sol3/papers.cfm?…

Caveat Emptor - Chandelor v Lopus (1603)

edit - there is a core difference in definitions of trust going on here and it is basically the difference between the list of people you would lend money to vs the list of people you would buy something from. For certain trades, these lists are essentially the same, but for other trades they are very, very different.