If your BATNA to winning the bid on that wheelbarrow auction is to order it for 120$ of Amazon with free overnight shipping, then winning the auction for 180$ is net negative for you.
But if your BATNA is to carry bags of sand on your back all summer, then 180$ for a wheelbarrow is a bloody bargain.
Assuming a toy model where dating preferences follow a global preference ordering (‘hotness’), then any person showing any interest in dating you is proof that you can likely do better.[1] But if you follow that rule, you can practically never date anyone (because you are only sampling the field of partners), which leaves a lot of utility on the table because relationships can be net positive for all participants even if they do not precisely match their market values.
If you want to buy stock to make money from speculation then you need to worry that almost everyone you trade with is better informed than you and you will end up net negative. On the other hand, if you buy stock as a long term investment (tracking some index or whatever) then you probably care a lot less about overpaying one percent.
I think that Zvi mentions a few legitimate examples of things which are out to get you, and their advice to avoid ones with unlimited cost potential is certainly sound.
If I buy toilet paper in the supermarket, I am paying more than the market price. If I wanted, I could figure out what toilet paper costs in bulk, find a supplier and buy a lifetime supply of toilet paper, likely saving a few 100$ in the process. I am not doing this because these amounts of savings over a lifetime are just not worth the hassle. Instead, I trust that competition between discounters mean that their markup is less than an order of magnitude and cheerfully pay their price.
Not everyone is out to get you.
If your BATNA to winning the bid on that wheelbarrow auction is to order it for 120$ of Amazon with free overnight shipping, then winning the auction for 180$ is net negative for you.
But if your BATNA is to carry bags of sand on your back all summer, then 180$ for a wheelbarrow is a bloody bargain.
Assuming a toy model where dating preferences follow a global preference ordering (‘hotness’), then any person showing any interest in dating you is proof that you can likely do better.[1] But if you follow that rule, you can practically never date anyone (because you are only sampling the field of partners), which leaves a lot of utility on the table because relationships can be net positive for all participants even if they do not precisely match their market values.
If you want to buy stock to make money from speculation then you need to worry that almost everyone you trade with is better informed than you and you will end up net negative. On the other hand, if you buy stock as a long term investment (tracking some index or whatever) then you probably care a lot less about overpaying one percent.
I think that Zvi mentions a few legitimate examples of things which are out to get you, and their advice to avoid ones with unlimited cost potential is certainly sound.
If I buy toilet paper in the supermarket, I am paying more than the market price. If I wanted, I could figure out what toilet paper costs in bulk, find a supplier and buy a lifetime supply of toilet paper, likely saving a few 100$ in the process. I am not doing this because these amounts of savings over a lifetime are just not worth the hassle. Instead, I trust that competition between discounters mean that their markup is less than an order of magnitude and cheerfully pay their price.
Don’t ask me if that is part of the reason why flirting is about avoiding the creation of common knowledge. I am just some nerd, why would I know?