11 Apr Is it ethical to sell something to someone knowing the price will eventually drop? (NICHOLAS TALEB)
There is a problem in the course of the
transactions: how much should the seller reveal to the buyer?
The question “Is it ethical to sell something to someone
knowing the price will eventually drop?” is an ancient one—but
its solution is no less straightforward. The debate goes back to a
disagreement between two stoic philosophers, Diogenes of
Babylon and his student Antipater of Tarsus, who took the higher
moral ground on asymmetric information and seems to match the
ethics endorsed by this author. Not a piece from both authors is
extant, but we know quite a bit from secondary sources, or, in the
case of Cicero, tertiary. The question was presented as follows,
retailed by Cicero in De Officiis. Assume a man brought a large
shipment of corn from Alexandria to Rhodes, at a time when corn
was expensive in Rhodes because of shortage and famine.
Suppose that he also knew that many boats had set sail from
Alexandria on their way to Rhodes with similar merchandise.
Does he have to inform the Rhodians? How can one act honorably
or dishonorably in these circumstances?
Diogenes held that the seller ought to disclose as much as civil
law requires. As for Antipater, he believed that everything ought
to be disclosed—beyond the law—so that there was nothing that
the seller knew that the buyer didn’t know.
Clearly Antipater’s position is more robust—robust being
invariant to time, place, situation, and color of the eyes of the
participants. Take for now that
The ethical is always more robust than the legal. Over time, it is the legal
that should converge to the ethical, never the reverse.
Hence:
Laws come and go; ethics stay
SKIN IN THE GAME
NICHOLAS TALEB
