I immediately had the same thought, but on second thoughts, I don’t think it’s quite as simple as that—remember this isn’t the only table the dealer will ever buy, and I’m not the only person he will ever sell a table to. The dealer needs to make a profit in general, and while it might make sense to make a loss on this particular table, it probably doesn’t make sense to have the attitude “it’s ok if I make a loss on tables that I sell”. On the other hand, it’s quite possible that the dealer would be better off if he had that attitude, as then he’d buy and sell more tables, and each table might still have a positive expected value. Either way, I think there is something to the idea that the dealer might want to remember what he paid for a table when deciding how much to sell it for.
Indeed, the concept of sunk costs sounds like a specifically CDT one to me, so I wouldn’t be surprised if there were scenarios whereas TDT considerations mean that the fact that you know you yourself decided to pay $50 for a table, using the same decision theory as you’re using now, is relevant.
the dealer might want to remember what he paid for a table when deciding how much to sell it for
Perhaps, but I doubt it. It becomes more important later—when it’s time to re-stock. That’s whent the dealer should think, “Let’s see, I bought the last table for $50 and sold it for $40. This time I won’t buy for more than $50.”
In other words, it should affect the dealer’s bargaining with her own dealer, not with the buyer.
Edit: I changed the last word in the previous sentence from “seller” to “buyer.”
I immediately had the same thought, but on second thoughts, I don’t think it’s quite as simple as that—remember this isn’t the only table the dealer will ever buy, and I’m not the only person he will ever sell a table to. The dealer needs to make a profit in general, and while it might make sense to make a loss on this particular table, it probably doesn’t make sense to have the attitude “it’s ok if I make a loss on tables that I sell”. On the other hand, it’s quite possible that the dealer would be better off if he had that attitude, as then he’d buy and sell more tables, and each table might still have a positive expected value. Either way, I think there is something to the idea that the dealer might want to remember what he paid for a table when deciding how much to sell it for.
Indeed, the concept of sunk costs sounds like a specifically CDT one to me, so I wouldn’t be surprised if there were scenarios whereas TDT considerations mean that the fact that you know you yourself decided to pay $50 for a table, using the same decision theory as you’re using now, is relevant.
Perhaps, but I doubt it. It becomes more important later—when it’s time to re-stock. That’s whent the dealer should think, “Let’s see, I bought the last table for $50 and sold it for $40. This time I won’t buy for more than $50.”
In other words, it should affect the dealer’s bargaining with her own dealer, not with the buyer.
Edit: I changed the last word in the previous sentence from “seller” to “buyer.”