Abadarian Trades

Spoilers for planecrash (Book 2).

I propose an equal split of the gains from this trade, and will reject lesser splits with a probability corresponding to how disproportionately they reserve the gains for you, such that you can’t actually do better by pretending to underrate me, but we’ll still work something out with high probability if we honestly disagree, paid in Wishes and spellsilver above and beyond the ordinary payment of permanent Arcane Sight. …and permanent Tongues.”

…first of all, mortals aren’t supposed to know about any of that, however garbled and incomplete it sounds, and second, if they stumble over a piece of it, you’re supposed to shut them down hard and refuse to bargain for their soul and ideally let them get executed by Cheliax.

“That is not the way of Hell,” he rumbles. “Asmodeus is not Abadar, little mortal, no matter what company you have been keeping of late. You can try to hold what secrets you like, and Hell will keep its own, and whoever is closer to Asmodeus in wit and ways is the one to win the compact. Name to me the price you seek for yourself.”


If I offer you tutoring for $40, you have the option of either turning me down and keeping $40 or gaining tutoring and losing $40. Whichever option is more desirable to you is the one you’ll take. Similarly, I have the option of offering tutoring for money or not offering tutoring with my time. I’ll do whichever sounds net best to me. Because people only ever willingly switch alternatives when the new alternative is a net improvement, someone taking me up on my tutoring offer means that we both prefer what we bought ($40, tutoring) to what we sold (tutoring, $40). This is one of the best reasons to be enthusiastic about free markets: transactions are mutually beneficial to both traders.

Because they constitute improvements by both trader’s lights, both traders want to make every transaction they can. Once no more trades can clear, no more mutual improvements can be made. However much happier each trader is now, by their own lights, is how beneficial free markets were to them.

If tutoring is worth $100 to you in total, then I can offer tutoring for up to $99 and you’d still buy from me. If I’d rather have unpaid leisure time than work for $24, I’ll only ever offer tutoring for $25 or more. So there are many prices I can offer that you’d buy from me at, that would leave us both better off. Towards one end, I am much happier and you’re a bit happier because of free markets. Towards the other, you’re much happier and I’m just a bit happier. Which of those offers is made and accepted alters how much better off each of us ends up.

Because this range of offers are all mutually agreeable, and only one actual offer has to be signed, how should the two of us choose a trade? One option, to head off getting into commitment races with each other over splits, is to precommit to dividing the value pie according to your notion of fairness. You each accept proffered fair splits of the value pie with probability 1. You each accept unfair splits with diminishing probability as those offers seem more unfair, such that it is always lower EV to offer a more unfair division. This precommitment also has the advantage of being robust to small differences in notions of fairness, and degrading gracefully in the face of very different notions of fairness.[1]

  1. ^

    If you ultimately endorse a Schelling notion of fairness—say that Shapley values are the only obvious formalization of what’s fair, meaning that scattered agents could all converge on endorsing the Shapley formalization—you’ll be less likely to have to pay even that disagreement-about-fairness tax.