Nassim Nicholas Taleb is writing a new book, Skin In the Game. Taleb discusses the concept of equality in uncertainty in one of the book's excerpts, and I have some thoughts on how the internet is making equality in uncertainty possible in a way that could not have previously existed.
Information asymmetry in a sale isn't fair. Taleb shares a few punchy anecdotes that drive this point home. But to what extent must we level the informational playing field?
Taleb shares a debate between two ancient Stoic philosophers, Diogenes and Antipater, about what degree of information an ethical salesperson must share:
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?
Each philosopher promoted a valid viewpoint:
Diogenes held that the seller ought to disclose as much as civil law would allow. Antipater 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.
In theory, Antipater's view resonates with me. In practice, I can see how this view could quickly become prohibitive to the seller.
I believe buyers need access to information, coupled with competency to filter and interpret that information, to satisfy Antipater's threshold of ethical selling.
Very rarely does a situation present itself that is as clear cut as the man with the shipment of corn. The corn seller would be taking advantage of the Rhodians because they did not have access to critical information that would affect their decision to purchase his corn.
I think this last part - access to information - is key, because the internet has fundamentally removed barriers to acquiring most information. While the internet has not removed information asymmetry entirely, it has begun to level the playing field.
Imagine that the Rhodians in Taleb's story are living in 2017. If the other corn sellers are en route to Rhodes from Alexandria and are sending tweets and posting to Instagram that they're on their way, the first corn seller could sell without disclosing that more corn is on the way because there is no information asymmetry.
When access to information is not readily accessible, or when the buyer is unlikely to be able to interpret this information, the seller must step in and provide the buyer with this filtered information so each individual shares equality in their uncertainty.
I could see how providing each buyer with this filtered information could be prohibitive for a seller in the past, but now software can now automate most of this process. This automation makes it more possible to be an ethical salesperson in 2017 than in the days of Diogenes and Antipater, because there's no excuse to withhold relevant information from buyers.
I'm looking forward to reading Skin In the Game. In the meantime, I'll keep chewing on the concept of equality in uncertainty.
This assumes the Rhodians had access to the internet and were acting rationally. ↩︎
Filtering and interpreting information is getting harder every day as more and more information is thrown at us from the internet. Information is essentially a commodity and our ability to process it is now the constraint. ↩︎