Idea Ripper // ArchiveCards: 1555 [Live] | Updated: 2026-10-14
Card #c1292IR // #c1292Synthesis

"All other things equal, you should think that Jo only has 40% (0.20/0.50) of the confidence in her fair value as you do in yours."

— In our words · Source: Trade Outside the Box (Brent Donnelly)

[Use when]

The other side's number differs from yours and you have to decide how much to move.

[Why it matters]

Donnelly quotes Agustin Lebron's example from The Laws of Trading. Your rival's price is 0.50 wide and yours is 0.20, so blend the two fair values weighted by confidence. You end up with a better estimate than blindly trusting either one.

Filed under situations:When the other side has more leverageWhen you must decide and the facts aren’t in

More from Trade Outside the Box

#c1278"Keynes asks us to imagine a newspaper which holds a contest where readers are rewarded for choosing which contestant will be chosen by the…You're right on the merits and need to predict how a crowd, market or committee will actually decide. #c1279"Younger children, or those without a fully developed Theory of Mind, will say that James will say: “pencils,” because they are unable to…You're sure the other side must see what you see. #c1280"There is a market aphorism that says: Early is the same thing as wrong." "You underperform as you wait for your dream trade to come true…You're about to bet against a trend just because it has gone a long way.

Same situation, different book

#c1358Take the deal when the timing and the partner are rightAn offer undervalues you but solves your real constraints and comes from a partner you trust.From Cancel Me If You Can #c1273Moving the goalposts, best versus goodEach time a deal gets close, someone declares it not good enough.From The Oxford Handbook of Modern Diplomacy #c1267Test motives instead of pleadingYou're chasing a reluctant party to the table and wondering why each round goes nowhere.From The Oxford Handbook of Modern Diplomacy #c1259Time to cool down saved the worldYou've just been provoked and the pressure is on to answer today.From The Oxford Handbook of Modern Diplomacy