# Dopers , what is YOUR answer to this question ? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 18, 2010, 7:05am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654 "2010-06-18T07:05:35Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Heffalump\_and\_Roo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heffalump_and_roo/32/7691_2.png) [@Heffalump\_and\_Roo](https://boards.straightdope.com/u/Heffalump_and_Roo)\ **Post date:** [June 18, 2010, 11:10pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/61 "2010-06-18T23:10:50Z")
Option (2) 20 lbs. Is this going to be one of those threads that leaves us hanging? Please, no. I hate those. > [@Oakminster](#): > > I think that’s the sum of it. Your answer comes from your perspective as a tax guy. Mine comes from what I’d probably ask for in damages if I sued the scammer. What?. . . no punitive damages? 😛 ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [June 18, 2010, 11:30pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/62 "2010-06-18T23:30:48Z")
Yeah, it’s a rough question, because the answer clearly comes down to ten quid and a horse. The most obvious value to put on the horse is a tenner, giving us the answer of 20. But you can make an argument for 30, or you could even make an argument for 10 (the horse depreciated and really is worth nothing, but the scammer convinced the seller it was worth 20). My final answer is his loss is ten pounds and a horse, but that’s not available, so I’d have to go with 20 as the number the test makers are fishing for. ---
**Author:** ![outlierrn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/outlierrn/32/3005_2.png) [@outlierrn](https://boards.straightdope.com/u/outlierrn)\ **Post date:** [June 19, 2010, 2:01am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/63 "2010-06-19T02:01:55Z")
I think it’s a lot easier to see this if you separate out the transactions. 1 you have 20, buy a horse to take to market, close the deal of horse +10 for a 30 pound check, the end. 2 You cash the check at the store, stop at the magazine rack, and the manager says this checks no good, I want my 30 back and you can take this check to the fraud cops, the end. You now have 0. I think it’s confusing because we have a tendency to see what others get and we don’t much more clearly than the reverse. As such this question could be very loosely interpreted as a variation of a Wason test. > **[Wason selection task](https://en.wikipedia.org/wiki/Wason_selection_task)** > > The Wason selection task (or four-card problem) is a logic puzzle devised by Peter Cathcart Wason in 1966. It is one of the most famous tasks in the study of deductive reasoning. An example of the puzzle is: > You are shown a set of four cards placed on a table, each of which has a number on one side and a color on the other. The visible faces of the cards show 3, 8, blue and red. Which card(s) must you turn over in order to test that if a card shows an even number on one face, then its opposite f... ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [June 19, 2010, 2:41am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/64 "2010-06-19T02:41:37Z")
> [@Baal\_Houtham](#): > > Suppose I buy a house (not a horse) for £100,000, and spend £100,000 fixing it up to make it ready to sell. > > If someone comes along and burns it down, I’ve lost £200,000. It doesn’t matter what the market value of the house was. No you are making a common mistake. You are confusing loss as a consequence of a particular event (fire) with loss as a consequence of market value change. If you buy a house for £100,000, and spend £100,000 fixing it up to make it ready to sell, what you have is a fixed up house with a particular market value. It may be £250,000 if your improvements were astute or the market has risen. It may be £150,000 if you have overcapitalised the house or the market has fallen. The amount of money you spend on an asset tends to have _some_ relationship with the value of the asset but the relationship is indirect. When the fire occurs, your loss as a consequence of the fire is the market value of the asset you have lost, at the time of the fire. You may already have lost or gained money on the asset as a consequence of market change at the time of the fire, but that is a different issue. Again, try a reductio on your theory. You say in your scenario you have lost £200,000 and it doesn’t matter what the value of the house was. So let’s say that since you bought the house and fixed it up the area has improved and the market has risen and on 1 July 2010 you had a firm offer from someone to buy the house for £1,000,000 and the buyer is coming to sign the contract on 2 July. On the night of 1 July the house burns down. Still say the loss is £200,000? I don’t think so. ---
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [June 19, 2010, 2:48am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/65 "2010-06-19T02:48:55Z")
Princhester, you are just getting back to whether “loss” means “a sunk cost” or “a lost opportunity.” ---
**Author:** ![Alan\_Smithee](https://avatars.discourse-cdn.com/v4/letter/a/2acd7d/32.png) [@Alan\_Smithee](https://boards.straightdope.com/u/Alan_Smithee)\ **Post date:** [June 19, 2010, 3:54am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/66 "2010-06-19T03:54:30Z")
> [@Princhester](#): > > The last few answers almost but not quite nail it > > Clearly he is out 10 pounds plus the horse. But we do not know what the value of the horse is. > > It is wrong to say definitively that the horse is worth 10 pounds since we don’t know whether the horsedealer paid precise market value: he may have got a good or bad deal on the horse at that price. Even if he paid perfect market value, the value may have moved either up or down in the meantime. > > It is wrong to say that the horse is worth 20 pounds because we don’t know that the horse thief agreed to pay 20 pounds because that was market value: he may have agreed to pay 20 pounds only because he knew he was going to rip the horsedealer off so didn’t care if he paid over market value. > > It is wrong to bring in the cost of keeping the horse: these are sunk costs and eat into profit but are not relevant to market value. > > The question does not contain sufficient information to allow a perfectly accurate answer except “ten pounds plue the value of the horse at the time of the transaction”. This is exactly what I was going to say. ---
**Author:** ![Baal\_Houtham](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baal_houtham/32/13604_2.png) [@Baal\_Houtham](https://boards.straightdope.com/u/Baal_Houtham)\ **Post date:** [June 19, 2010, 4:00am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/67 "2010-06-19T04:00:51Z")
> [@Princhester](#): > > No you are making a common mistake. You are confusing loss as a consequence of a particular event (fire) with loss as a consequence of market value change. > > If you buy a house for £100,000, and spend £100,000 fixing it up to make it ready to sell, what you have is a fixed up house with a particular market value. It may be £250,000 if your improvements were astute or the market has risen. It may be £150,000 if you have overcapitalised the house or the market has fallen. The amount of money you spend on an asset tends to have _some_ relationship with the value of the asset but the relationship is indirect. > > When the fire occurs, your loss as a consequence of the fire is the market value of the asset you have lost, at the time of the fire. You may already have lost or gained money on the asset as a consequence of market change at the time of the fire, but that is a different issue. > > Again, try a reductio on your theory. You say in your scenario you have lost £200,000 and it doesn’t matter what the value of the house was. So let’s say that since you bought the house and fixed it up the area has improved and the market has risen and on 1 July 2010 you had a firm offer from someone to buy the house for £1,000,000 and the buyer is coming to sign the contract on 2 July. On the night of 1 July the house burns down. Still say the loss is £200,000? I don’t think so. Well I’m not an economist, but I think a decent argument can be made either way. Several analogies that I find interesting… **Stock Market Losses:** If you invest in a stock, you don’t lose money merely because the stock goes down (the market value). You only lose money if you actually sell the stock at a lower price. OTOH if your money is stolen by the stock broker you have lost your full investment, not just the present market value. I’d score that one for me. Here’s a score for for you: Lottery Ticket:\*\* You spend $2 for a lottery ticket \*\*that turns out to be a $100,000 winner. Your ticket is lost/destroyed/stolen or otherwise nonredeemable. Did you lose $2 or $100,000 (approx.) I’d say $100,000. **Gold Nugget:** You buy a gold nugget for $50, and it gets stolen. Are you out $50 or are you out the present market value? To me it’s a toss-up. Were you planning on selling it immediately or were you just holding it without an immediate goal. If you were just holding it then you lost exactly your investment. $50. If you’re an insurance agent then it makes sense to compensate people only for fair market value. But if you’re the person who has lost something then you have lost everything you put into it, despite what the insurance man says. If someone is unfairly forced to get rid of something before they are ready (e.g. by theft), then they have lost what they put into it. Not just the market value at the time of the theft. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [June 19, 2010, 7:37am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/68 "2010-06-19T07:37:46Z")
> [@Baal\_Houtham](#): > > **Stock Market Losses:** If you invest in a stock, you don’t lose money merely because the stock goes down (the market value). You only lose money if you actually sell the stock at a lower price. OTOH if your money is stolen by the stock broker you have lost your full investment, not just the present market value. > I’d score that one for me. Your discussion is interesting and I’m aware of the principles but your discussion is not relevant to the OP situation. The OP situation involves a particular event which forcibly crystallises a loss at a point in time. The analogy in a stock market situation is for your shares to be misappropriated from you on a particular date: your loss is the market value of the shares on that date. The amount you paid for them originally is irrelevant. Think about this: say you have some shares. I take them off you and sell them. You learn of this immediately and force me to compensate you. How much do I have to give you, right now, to put you in exactly the same position you were in before I took them off you? Suggesting that it is the amount you originally paid for them is absurd. I have to gve you back the market value, right now, so you can buy some shares to replace those I took to put you back in the position you were in. If you bought them for $10 but they are now worth $100 it is hardly going to give you back the value I took if I give you $10. And the same is true if the market has fallen rather than risen. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 19, 2010, 8:30am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/69 "2010-06-19T08:30:05Z")
> [@jjimm](#): > > So one could argue he’s lost £30 since he didn’t get the expected profit, but as far as the hard figures are concerned, he’s only lost £20. This is the correct answer. Easy to see if you recall that in zero-sum games the (signed) gains sum to … zero. Shopkeeper broke even; horserider had illicit £30 gain; what’s left? Many economic misconceptions in the political threads in GD forum would disappear if people understood the useful analyses available with zero-sum formulations. It might be fun to correlate wrong posters here with wrong political analyses there! 😃 :dubious: ---
**Author:** ![Markxxx](https://avatars.discourse-cdn.com/v4/letter/m/5daacb/32.png) [@Markxxx](https://boards.straightdope.com/u/Markxxx)\ **Post date:** [June 20, 2010, 2:53am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/70 "2010-06-20T02:53:43Z")
This is actually a new spin on an old problem from Marketing 101. If I recall correctly the problem goes something like this Alice gives the following people a check for $1,000 when they get married: Greg, Peter, Bobby, Marcia and Cindy all get a wedding present of $1,000. On Jan’s wedding day she gets $25.00. How much is Jan out? Well the anwer is NOTHING. In fact Jan is up $25.00. But when you ask groups of people this, most people will say Jan is out $975.00. But Jan is infact out nothing. The $1,000 serves as what’s termed in marking as a “pseudo-reference” point. It gives something PRECEIVED value. Where in fact no true value exists. That is why at the end of the problem the original cost of the horse is throw in. This is a psuedo-reference point and means nothing. The original problem concerns what the person is out concerning the transaction specific, not the total cost. By stating the price the horse was bought at, we natually want to figure in that cost. But what about the cost of food, the costs of stable fees, the cost of a trainer, rider and grooming. One could argue, since those aren’t known we can’t figure that into it. But whether known or not those are actual costs. Notice how the problem makes sure the horse is a commodity with such built in hidden costs. A piece of art or such wouldn’t have such auxillaries to be addded or could be ignored. The answer is the original price of the horse is a psuedo-reference point. This is found in things like, I recall when I’d visit NYC, the ads for the Broadway show the producers would advertise, Box Seats at $498.00. Even though there were vary few box seats to sell, this means anyone pricing seats for that show would think $99.00 is a steal. In fact the $498 is just a reference point. You could say the average cost of a seat was $99 and people would then think box seats are priced outrageously high at five times as much. ---
**Author:** ![Gestalt](https://avatars.discourse-cdn.com/v4/letter/g/90ced4/32.png) [@Gestalt](https://boards.straightdope.com/u/Gestalt)\ **Post date:** [June 20, 2010, 1:59pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/71 "2010-06-20T13:59:47Z")
Trying to understand all of this is making my head hurt :). Could someone point out the flaw in my logic? Start: Horsedealer has horse worth $20 (or $10, depending on whether you consider the expected profit to be part of the horse’s value) End: Horsedealer has no horse, and is also out $30 to shopkeeper. He has put no money in his pocket from this. So wouldn’t that be a $40 or $50 loss, depending on what you consider to be the value of the horse? ---
**Author:** ![Gestalt](https://avatars.discourse-cdn.com/v4/letter/g/90ced4/32.png) [@Gestalt](https://boards.straightdope.com/u/Gestalt)\ **Post date:** [June 20, 2010, 2:03pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/72 "2010-06-20T14:03:09Z")
Nevermind, that money came from the shopkeeper. The horsedealer is only out what the horse thief gained, as the shopkeeper stays at the same. The horse thief walks away with $10 plus horse, so the dealer loses either $20 or $30, depending on how you value the horse. ---
**Author:** ![jackdavinci](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackdavinci/32/3259_2.png) [@jackdavinci](https://boards.straightdope.com/u/jackdavinci)\ **Post date:** [June 21, 2010, 6:54am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/73 "2010-06-21T06:54:23Z")
&40 - &20 for the horse and &10 for the shopkeeper and &10 change to the customer ---
**Author:** ![jackdavinci](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackdavinci/32/3259_2.png) [@jackdavinci](https://boards.straightdope.com/u/jackdavinci)\ **Post date:** [June 21, 2010, 7:13am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/74 "2010-06-21T07:13:50Z")
> [@indian](#): > > A man bought a horse for £20 and gave in payment a cheque for £30. The horsedealer persuaded a shopkeeper to change the cheque for him, and the buyer, having received his £10 change, rode off on the horse and was not seen again. Later the cheque was found to be valueless, and the horsedealer had to refund the shopkeeper the amount he had received. The horsedealer had himself bought the horse for £10. How much did the horsedealer lose altogether? > > (1) Nothing. (2) £20. (3) £10. (4) £30. (5) £40. OK having read it more carefully… 1. Horse Dealer buy a horse with 10 pounds from Original Horse Dealer HD -10E +1H OHD -1H +10E 2. He sells the horse plus 10 pounds cash, to a Man for a 30 pound check, M + 1H -30C +10E HD -1H +30C -10E 3)The shopkeeper trades 30 pounds for a 30 pound check plus promise to compensate for fraud SK +30C -30E HD -30C +30E 1. Horse Dealer compensate Shop Keeper the thirty pounds he was given SK +30E HD -30E Final result: Original Horse Dealer: -1H + 10E Horse Dealer: -10E + 1H -1H +30C -30C +30E -10E -30E= -20E + 0H + 0C Man: +1H -30C +10E= 1H -30C +10E Shop Keeper: +30C - 30E +30E So original horse dealer gets 10 pounds and loses a horse Our horse dealer ends up missing 20 pounds The thieving man ends up with a horse, 10 pounds, and liable for a false check of 30 pounds The shop keeper ends up with 30 pounds to compensate for the thirty pounds they shelled out for a bogus 30 pound check - assuming no fees, they end up even ---
**Author:** ![jackdavinci](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackdavinci/32/3259_2.png) [@jackdavinci](https://boards.straightdope.com/u/jackdavinci)\ **Post date:** [June 21, 2010, 7:24am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/75 "2010-06-21T07:24:20Z")
OK this is difficult lol My new answer: > [@indian](#): > > A man bought a horse for £20 and gave in payment a cheque for £30. The horsedealer persuaded a shopkeeper to change the cheque for him, and the buyer, having received his £10 change, rode off on the horse and was not seen again. Later the cheque was found to be valueless, and the horsedealer had to refund the shopkeeper the amount he had received. The horsedealer had himself bought the horse for £10. How much did the horsedealer lose altogether? > > (1) Nothing. (2) £20. (3) £10. (4) £30. (5) £40. OK having read it more carefully… 1. Horse Dealer buy a horse with 10 pounds from Original Horse Dealer HD -10E +1H OHD -1H +10E 2. He sells the horse plus 10 pounds cash, to a Man for a 30 pound check, M + 1H -30C +10E HD -1H +30C -10E 3)The shopkeeper trades 30 pounds for a 30 pound check plus promise to compensate for fraud SK +30C -30E HD -30C +30E 1. Horse Dealer compensates Shop Keeper the thirty pounds he was given SK +30E HD -30E Final result: Original Horse Dealer: (-1H + 10E) Horse Dealer: (-10E + 1H) (-1H +30C) (-30C +30E) (-30E)= -10E + 0H + 0C Man: (+1H -30C) (+10E)= 1H -30C +10E Shop Keeper: (+30C - 30E) (+30E) So original horse dealer gets 10 pounds and loses a horse Our horse dealer ends up missing 10 pounds The thieving Man ends up with a horse, 10 pounds, and liable for a false check of 30 pounds The shop keeper ends up with 30 pounds to compensate for the thirty pounds they shelled out for a bogus 30 pound check - assuming no fees, they end up even ---
**Author:** ![jackdavinci](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackdavinci/32/3259_2.png) [@jackdavinci](https://boards.straightdope.com/u/jackdavinci)\ **Post date:** [June 21, 2010, 7:34am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/76 "2010-06-21T07:34:41Z")
Having read every one else’s posts, the best compromise I can offer is that the horse dealer lost 10 pounds hard cash, and 10 pounds of promised profit. I can’t justify anything above that potential 20 pounds. Am I wrong? ---
**Author:** ![outlierrn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/outlierrn/32/3005_2.png) [@outlierrn](https://boards.straightdope.com/u/outlierrn)\ **Post date:** [June 21, 2010, 9:45am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/77 "2010-06-21T09:45:11Z")
> [@jackdavinci](#): > > Final result: > Horse Dealer: (-10E + 1H) (-1H +30C) (-30C +30E) (-30E)= -10E + 0H + 0C Yeah, right here you left out the additional 10 in cash that the dealer gave to the thief. The thief recieved a 20 pound horse and 10 in cash for a 30 pound check. So the thief is up the horse and 10, and the seller is out the horse and 10. But the best, most current estimate we have for the value of the horse is the 10 the seller paid for it. Sure, he _might_ have paid maintenance, but he might have bought it that morning believing he could flip it in town for a profit. It _might_ be worth 20, or the thief might have offered an inflated price to hurry the deal, but that’s not in the OP, all we know is that the seller paid 10 actual pounds for it. I still think he’s out 20. ---
**Author:** ![shijinn](https://avatars.discourse-cdn.com/v4/letter/s/cc9497/32.png) [@shijinn](https://boards.straightdope.com/u/shijinn)\ **Post date:** [June 21, 2010, 10:30am UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/78 "2010-06-21T10:30:01Z")
a pony for 20 quid?! me want. i’ll buy everything you’ve got. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [June 21, 2010, 12:27pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/79 "2010-06-21T12:27:59Z")
> [@shijinn](#): > > a pony for 20 quid?! me want. i’ll buy everything you’ve got. A perfect post to illustrate why all those who think the answer to the question can be determined from the information given are wrong: clearly going by your post the dealer got the horse cheap so 10 pounds for the horse does not represent the value he lost, and neither does 20 pounds. ---
**Author:** ![Shirley\_Ujest](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shirley\_Ujest](https://boards.straightdope.com/u/Shirley_Ujest)\ **Post date:** [June 21, 2010, 12:38pm UTC](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654/80 "2010-06-21T12:38:22Z")
You are all wrong. You never make any profit for horses. [Previous page](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654.md?page=3) [Next page](https://boards.straightdope.com/t/dopers-what-is-your-answer-to-this-question/543654.md?page=5)