Because of asymmetric information about demand schedules in the individual one-off context, either you’re guessing or accepting their self-reports (i.e., I agree with Kokotajlo and Shlomi). As nice as probabilistic negotiation is in theory, practically you just hope to converge to splitting the surplus, and giving-in happens for whomever tires of the negotiation first. Depends on how much you know about your counterpart.
It’s much easier to set market prices where you have repeated transactions across participants, so “market” demand schedules (i.e., multiple unitary reservation prices) can be “learned” and the “market price” that enables value-maximization reveals itself. I appreciate that it’s harder at the individual level—bringing in probability allows working with individual demand schedules (i.e., multiple probabilistic reservation prices rather than a single unitary reservation price), but bringing in probability doesn’t exactly solve the problem because probabilities can only be learned through being furnished knowledge of the generating mechanism (e.g., Yudkowsky and Kennedy) or through repeated observation, the exact things that we assume we lack in this situation and that make this a problem in the first place.
Related: probabilistic negotiation (linking to my comment).
Because of asymmetric information about demand schedules in the individual one-off context, either you’re guessing or accepting their self-reports (i.e., I agree with Kokotajlo and Shlomi). As nice as probabilistic negotiation is in theory, practically you just hope to converge to splitting the surplus, and giving-in happens for whomever tires of the negotiation first. Depends on how much you know about your counterpart.
It’s much easier to set market prices where you have repeated transactions across participants, so “market” demand schedules (i.e., multiple unitary reservation prices) can be “learned” and the “market price” that enables value-maximization reveals itself. I appreciate that it’s harder at the individual level—bringing in probability allows working with individual demand schedules (i.e., multiple probabilistic reservation prices rather than a single unitary reservation price), but bringing in probability doesn’t exactly solve the problem because probabilities can only be learned through being furnished knowledge of the generating mechanism (e.g., Yudkowsky and Kennedy) or through repeated observation, the exact things that we assume we lack in this situation and that make this a problem in the first place.