The Nonlinear Library LW - Conditional on Getting to Trade, Your Trade Wasn't All That Great by Ricki Heicklen
Mar 14, 2024
07:52
Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Conditional on Getting to Trade, Your Trade Wasn't All That Great, published by Ricki Heicklen on March 14, 2024 on LessWrong.
"I refuse to join any club that would have me as a member" -Marx[1]
1. The Subway Seat: You're on a subway platform, and the train pulls into the station. Almost all of the subway cars are full to the brim, but you notice one that is entirely empty. You'll be able to get a seat to yourself! You step onto that car. The air conditioning is broken, and someone has defecated on the floor.
2. The Juggling Contest: Your quantitative trading firm is holding its annual juggling tournament. Cost to enter is $18, winner takes all. You know you're far better at juggling than most of your coworkers, so you sign up. As it turns out, only a few of your coworkers sign up, including Alice, who used to be in the lucrative professional juggling world before leaving to pursue her lifelong passion of providing moderate liquidity to US Equities markets. You come in second place.
3. The Bedroom Allocation: You're moving into a new two-bedroom apartment with your roommate Bob. You've each had a chance to check out the apartment, and Bob asks you which bedroom you prefer. Both looked equally good to you, so you tell Bob that he can choose. Bob chooses a room, and lo and behold, you find upon moving in that your room has less closet space and worse flooring.
You realize you would have been better off flipping a coin (giving you a 50% chance at the better room) instead of leaving it up to Bob.
4. The Thanksgiving Leftovers: It's the Sunday after Thanksgiving, and dinner is leftovers. You recall that your family's Thanksgiving meal was delicious, so you're excited to eat more of it. You get to the table, and find that the only food left is Uncle Cain's soggy fruit salad - all of the yummy food has disappeared over the weekend.
5. The Wheelbarrow Auction: At the town fair, a wheelbarrow is up for auction. You think the fair price of the wheelbarrow is around $200 (with some uncertainty), so you submit a bid for $180. You find out that you won the auction - everyone else submitted bids in the range of $25-$175, so your bid is the highest. After paying and taking your new acquisition home, you discover that the wheelbarrow is less sturdy than you'd estimated, and is probably worth more like $120.
You check online, and indeed it retails for $120. You would have been better off buying it online.
6. The Wheelbarrow Auction, part 2: At the town fair, a wheelbarrow is up for auction. You think the fair price of the wheelbarrow is around $120 (with some uncertainty), so you submit a bid for $108. You find out that you didn't win - the winning bidder ends up being some schmuck who bid $180. You don't exchange any money or wheelbarrows. When you get home, you check online out of curiosity, and indeed the item retails for $120.
Your estimate was great, your bid was reasonable, and you exchanged nothing as a result, reaping a profit of zero dollars and zero cents.
7. The Laffy Taffys: Laffy Taffys come in four flavors, three of which you really like. Your friend Drew is across the room next to the Laffy Taffy bowl, and you ask him to throw you a Laffy Taffy. (You don't want to ask him for too big a favor, so you don't specify flavor - you figure you're 75% to get a good one anyway.) He reaches into the bowl and draws a Laffy Taffy and tosses it to you. It's banana.
8. The Field: You want to invest in real estate, so you go to your field-owning friend Ephron and submit a market order for his field.
You: I would like to buy your field.
Ephron: My man, it is all yours. Take it.
You: No, I want to pay dollars for it. I will pay whatever it costs. Which is how much, by the way?
Ephron: Oh, I guess, if I had to put a price on it, hrm, maybe $400 million? What's $400 million between frien...
"I refuse to join any club that would have me as a member" -Marx[1]
1. The Subway Seat: You're on a subway platform, and the train pulls into the station. Almost all of the subway cars are full to the brim, but you notice one that is entirely empty. You'll be able to get a seat to yourself! You step onto that car. The air conditioning is broken, and someone has defecated on the floor.
2. The Juggling Contest: Your quantitative trading firm is holding its annual juggling tournament. Cost to enter is $18, winner takes all. You know you're far better at juggling than most of your coworkers, so you sign up. As it turns out, only a few of your coworkers sign up, including Alice, who used to be in the lucrative professional juggling world before leaving to pursue her lifelong passion of providing moderate liquidity to US Equities markets. You come in second place.
3. The Bedroom Allocation: You're moving into a new two-bedroom apartment with your roommate Bob. You've each had a chance to check out the apartment, and Bob asks you which bedroom you prefer. Both looked equally good to you, so you tell Bob that he can choose. Bob chooses a room, and lo and behold, you find upon moving in that your room has less closet space and worse flooring.
You realize you would have been better off flipping a coin (giving you a 50% chance at the better room) instead of leaving it up to Bob.
4. The Thanksgiving Leftovers: It's the Sunday after Thanksgiving, and dinner is leftovers. You recall that your family's Thanksgiving meal was delicious, so you're excited to eat more of it. You get to the table, and find that the only food left is Uncle Cain's soggy fruit salad - all of the yummy food has disappeared over the weekend.
5. The Wheelbarrow Auction: At the town fair, a wheelbarrow is up for auction. You think the fair price of the wheelbarrow is around $200 (with some uncertainty), so you submit a bid for $180. You find out that you won the auction - everyone else submitted bids in the range of $25-$175, so your bid is the highest. After paying and taking your new acquisition home, you discover that the wheelbarrow is less sturdy than you'd estimated, and is probably worth more like $120.
You check online, and indeed it retails for $120. You would have been better off buying it online.
6. The Wheelbarrow Auction, part 2: At the town fair, a wheelbarrow is up for auction. You think the fair price of the wheelbarrow is around $120 (with some uncertainty), so you submit a bid for $108. You find out that you didn't win - the winning bidder ends up being some schmuck who bid $180. You don't exchange any money or wheelbarrows. When you get home, you check online out of curiosity, and indeed the item retails for $120.
Your estimate was great, your bid was reasonable, and you exchanged nothing as a result, reaping a profit of zero dollars and zero cents.
7. The Laffy Taffys: Laffy Taffys come in four flavors, three of which you really like. Your friend Drew is across the room next to the Laffy Taffy bowl, and you ask him to throw you a Laffy Taffy. (You don't want to ask him for too big a favor, so you don't specify flavor - you figure you're 75% to get a good one anyway.) He reaches into the bowl and draws a Laffy Taffy and tosses it to you. It's banana.
8. The Field: You want to invest in real estate, so you go to your field-owning friend Ephron and submit a market order for his field.
You: I would like to buy your field.
Ephron: My man, it is all yours. Take it.
You: No, I want to pay dollars for it. I will pay whatever it costs. Which is how much, by the way?
Ephron: Oh, I guess, if I had to put a price on it, hrm, maybe $400 million? What's $400 million between frien...