Because in a blackmail, I do not wish the trade to happen at all. Let the “default” outcome for a trade T be one where the trade doesn’t happen. Assume that my partner (the Baron) gets to decide whether T happens or not.
If T is a blackmail, then every option is worse than not-T. So, if I can commit to ensuring that T is also negative for the Baron, then the Baron won’t let T happen. This gives a definition for blackmail: a trade T where every option is worse than not-T, but where I can commit to actions that ensure that T is negative for the person that decides whether T happens or not.
Let’s contrast this with another trade T, with no blackmail elements to it, where I am a monopolist or monopsonist. It is still to my advantage to credibly commit to rejecting everything if I don’t get 99% of the profit. However, I am limited by the fact that I want the trade to happen; I can’t commit to any option that is actually harmful to the Baron. He will trade with me as long as he doesn’t lose; his ‘default’ ensures that I have to give him something.
Finally, most trades are not monopolist or monopsonist. In this case, it is not to my advantage to precommit to taking more than “my fair (market) share” of the profit, as that will cause the trade to fail; the Baron’s default is higher (he can trade with others) so I have to offer him at least that.
Now, I don’t want to go down the rabbit hole of dueling pre-commitments, or the proper decision-theoretic way of resolving the issue (blackmailing someone or precommiting to avoid blackmail are very similar processes). But it does show why you would want to precommit to a particular action in blackmail situations, but not in others: you do not control if the trade happens, and blackmails are trades that you do not want to see happen. You can call not-trading the ‘default’ if you wish, but the salient fact is that it is better for you, not that it is default.
Because in a blackmail, I do not wish the trade to happen at all.
Something has to happen, and you must choose from the options you’re dealt. Maybe I don’t wish to pay for my Internet connection, and would rather have the Flying Spaghetti Monster provide it to me free of charge, and also grant me $1000 as a bonus? This seems to qualify as not wishing I had to choose a provider at all. But in reality, I have to choose, and FSM is not available as an option, just as not being blackmailed is not available as an option (by assumption; the agent doesn’t need to know that, only the problem statement that logically implies that).
The difference is that since blackmail is costly, there is no incentive to blackmail someone who will not give into it, which makes people who won’t give in better off than people who will. On the other hand, there is no incentive for a company to offer free services to someone who refuses to ‘give in’ and pay money.
I think the logic is along the lines of “make the decision which, if the other party knew you were going to make it, would maximise your expected utility”.
Which shows exactly why the rule is not universally applicable—the other party does not, in general, know what decision you’re going to make (though they can predict it to some level of accuracy), and so there’s a cost/benefit situation.
Yes, I was not entirely straightforward in my questions and wished to elicit some clarity from others. Here, the key is the difference between observational (logical) impossibility and agent-provable impossibility.
Because in a blackmail, I do not wish the trade to happen at all. Let the “default” outcome for a trade T be one where the trade doesn’t happen. Assume that my partner (the Baron) gets to decide whether T happens or not.
If T is a blackmail, then every option is worse than not-T. So, if I can commit to ensuring that T is also negative for the Baron, then the Baron won’t let T happen. This gives a definition for blackmail: a trade T where every option is worse than not-T, but where I can commit to actions that ensure that T is negative for the person that decides whether T happens or not.
Let’s contrast this with another trade T, with no blackmail elements to it, where I am a monopolist or monopsonist. It is still to my advantage to credibly commit to rejecting everything if I don’t get 99% of the profit. However, I am limited by the fact that I want the trade to happen; I can’t commit to any option that is actually harmful to the Baron. He will trade with me as long as he doesn’t lose; his ‘default’ ensures that I have to give him something.
Finally, most trades are not monopolist or monopsonist. In this case, it is not to my advantage to precommit to taking more than “my fair (market) share” of the profit, as that will cause the trade to fail; the Baron’s default is higher (he can trade with others) so I have to offer him at least that.
Now, I don’t want to go down the rabbit hole of dueling pre-commitments, or the proper decision-theoretic way of resolving the issue (blackmailing someone or precommiting to avoid blackmail are very similar processes). But it does show why you would want to precommit to a particular action in blackmail situations, but not in others: you do not control if the trade happens, and blackmails are trades that you do not want to see happen. You can call not-trading the ‘default’ if you wish, but the salient fact is that it is better for you, not that it is default.
Something has to happen, and you must choose from the options you’re dealt. Maybe I don’t wish to pay for my Internet connection, and would rather have the Flying Spaghetti Monster provide it to me free of charge, and also grant me $1000 as a bonus? This seems to qualify as not wishing I had to choose a provider at all. But in reality, I have to choose, and FSM is not available as an option, just as not being blackmailed is not available as an option (by assumption; the agent doesn’t need to know that, only the problem statement that logically implies that).
The difference is that since blackmail is costly, there is no incentive to blackmail someone who will not give into it, which makes people who won’t give in better off than people who will. On the other hand, there is no incentive for a company to offer free services to someone who refuses to ‘give in’ and pay money.
I think the logic is along the lines of “make the decision which, if the other party knew you were going to make it, would maximise your expected utility”.
Which shows exactly why the rule is not universally applicable—the other party does not, in general, know what decision you’re going to make (though they can predict it to some level of accuracy), and so there’s a cost/benefit situation.
I am going to try and save my attempted solution ( http://lesswrong.com/lw/39a/unpacking_the_concept_of_blackmail/342c?c=1 ) from being stuck at the bottom of the thread. This might be inappropriate behavior, and if so please inform me.
I think you’ve answered your own question in your comment.
Yes, I was not entirely straightforward in my questions and wished to elicit some clarity from others. Here, the key is the difference between observational (logical) impossibility and agent-provable impossibility.