This concept is introduced in Book 1 as the solution to the Ultimatum Game, and describes fairness as Shapely value.
When somebody offers you a 7:5 split, instead of the 6:6 split that would be fair, you should accept their offer with slightly less than 6⁄7 probability. Their expected value from offering you 7:5, in this case, is 7 * slightly less than 6⁄7, or slightly less than 6.
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Once you’ve arrived at a notion of a ‘fair price’ in some one-time trading situation where the seller sets a price and the buyer decides whether to accept, the seller doesn’t have an incentive to say the fair price is higher than that; the buyer will accept with a lower probability that cancels out some of the seller’s expected gains from trade. [1]
This concept is introduced in Book 1 as the solution to the Ultimatum Game, and describes fairness as Shapely value.
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I found this section, along with dath ilani Governance, and SCIENCE! particularly brilliant.