“Since arbitrage opportunities are extremely limited on MTGO, that leaves incomplete information as a major driver. ”

I hate to reply to something 6 years late but this is so ridiculously incorrect i had to say something.

I have arbitraged thousands of dollars from bots on MTGO, it is insanely easy, to state that arbitrage opportunities are extremely limited is either completely uninformed (just like your article on p2p) or intentionally untrue.

I don't think your example fits at all. In Magic there are hard and fast written rules that say, "thou shalt do X". If you break the rules, then Y will happen.

In trading there are no rules. Not because no one's written any, but because it's impossible to write any. There would never be consensus on what is right and what is wrong.

What Corbin has put together here is essentially his Terms & Conditions for trading with him. He's very open about it and there's no hiding it. If you decide that's unfair, no one is forcing you to agree to them.

I think you and I are operating on fundamentally different definition of "value." There are countless examples on this site alone of how and why value is variable, whereas you seem to try and apply a strict price point to it, which is just an untenable position given the dozens of prices attached to any given card.
Since when did traditional economic theory ever apply to collectibles? The inherent nature of the goods discussed is an extremely variable "value," based on who you're talking to.
So when you say "in the absence of added value," I have a problem with that, because that value can be added or subtracted based on nothing more than who you are trading with.
As I noted, I don't play MTGO, so I'm speaking for the world of "paper magic," but seeing as how you addressed both in your article, the issues I discussed still apply (albeit to a lesser extent on MTGO).
I appreciate your reply on here, and I think you and I agree on a lot of trading principles, I just would like to see you acknowledge than rather than stereotype all traders based on anecdotal evidence.

I need to point out that the prices used throughout the article, published on a MTGO related website, were refrencing the *online* price of *online* cards, as of the date the article was written. The article stated that several times.

If you missed that – well, want to trade your pair of Jace TMS for my Tabernacle? (Online, Jace II is pushing $90, and Tabernacle is under $5.00. And, yes, the offer is a joke – I would consider it unethical if I offered it to you, since you clearly didn't know that we were referencing online prices.)

I suggest that you reread the article.

I made two basic points:

1) traditional economic theory defines adding value, as a basis for price differentials between the price of inputs and outputs. That is not happening here.

2) the basis for the difference, in the absence of added value, has to be either arbitrage or incomplete information. Since arbitrage opportunities are extremely limited on MTGO, that leaves incomplete information as a major driver.

I then said that, if a trader knowingly calls a trade "fair" when he or she knows that the trade is unbalanced, that is unethical.

Is there ethical trading? Yes – but it is very, very hard to make a profit at it. It is easier in paper, but possible online. Look at Marin Baraba's latest article on MTGOAcademy for some opportunities for ethical trade options.

In my experience, however, nearly all of the people I have seen trading a lot are not ethical. Pretty much anyone who starts the trade saying "what do you value that at?" is probably looking to trade only for cards their opponent (that's probably more accurate than "trade partner" or the like) undervalues, and that's what they trade for.

Here's another way of looking at a trade. If both people pull out the cards they want, and then check some resource to see if the values balance – throwing in some extra cards on one side or the other to even it out, that is a totally ethical trade. If one person trades only for the cards they expect to be able to trade later for more than they get – especially those that thier opponent undervalues – and lies about an unbalanced trade being balanced, that's not ethical.

Just going to point out that $21 is a VERY expensive price for null rod. The store I work at sells them for $10.00, so naturally for many people (because SCG also lists this price), that looks like an awesome trade for the fellow with the vampires.

This is a concrete example of how you cannot numerically define secondary market prices.

It's only when lying, deceit, misinformation, and lack of knowledge does trading xx for xxx become unethical.

1. Magic cards have no "true value" only an individual value placed upon the card by their former and future owners. If I value Baneslayer at $15, and you value it at $30 who's right? Answer: We both are!

2. No one here has condoned lying to your prospect. Lying is stating a fact that deviates from the truth. This relies on there being one ultimate "Truth". So will one of these honest traders please tell me, right now, 100% truthfully, what is a Baneslayer worth right now and forever more. If you can all agree on an answer to that question, then you're welcome to accuse me of lying to my trading partners.

What do you mean "and forever more" isn't fair? So if I traded for your Frost Titans when they were worth $3 knowing they would spike to $12 that was a completely honest trade? If your moral compass doesn't allow for deviations of value, then it must reconcile temporal differences as well.

No one on any side of this debate (to my knowledge) is saying it's okay to make money by lying. The problem with Pete's article is it comes across as directed at all P2P traders, and "value traders" in general, without referencing that there might be any form of ethical value trading.

You wrote:
"no one can be faulted for making profitable trades, as long as there is equal knowledge on both sides,"

Peter's article is about traders who take advantage of other people that don't have the knowledge. You completely missed the point.

You wrote:
"Many serious traders start conversation with “what do you value card X at?” for a reason. Is their partner using Ebay or SCG pricing? Do they place an arbitrarily high value on a card because it was their first-ever rare? Do they even know prices?"

Most people that ask "What do you value card X at" are looking for a bargain and will repeatedly ask that question looking for you to undervalue your cards. When they want to know what pricing system they use, they ask "What pricing system do you want to go by". I've been trading for a very long time, and I would say this is true 90% of the time or more.

The point is, if you both trade using the same pricing scale (guide), no harm can be had since you both have fair information. If you want to value something higher than what the scale says, and the other person agrees to it, that's fine. If you can make a proffit using arbitration by picking cards up cheap using one scale, then using a different scale in a seperate trade that values the card at a higher %, that's perfectly fine. Most trades that I have seen involve 2 people using their own seperate pricing scales and their own knowledge, which opens the channels for ripoffs. If each person places values on their own cards and agree, that's fine. The problem comes when trader A tells trader B what the value of trader B's cards are. Just because the other person agrees to it does not make it ok, it makes them a victim for having trusted you. If you're going to tell them what the value of their cards are, just use the same pricing system you used to value your cards, and memorizing 1 site's prices does not entitle you to make a gain by lying our just letting them make poor guesses.

There are still pleanty of ways to make a gain in trading, buy lying about values of cards should not be one of them.

My point is that we embarked on a PSP-like mission and by the end of the night we had ended up with something more valuable than what we had started with. I don't think that anybody we traded with regretted having trading with us (they could have said no, after all). And so I disagree that when one person parlays an item into another item of greater value using a series of trades over time, that it requires that other people be taken advantage of.

There are also those who misrepresent the value of their trades to gain value, but those people are being dishonest. They are taking advantage of others.

So there are 2 ways to go from P2P, honestly and dishonestly. To say that all those who go from P2P all do so using the dishonest method is not fair.

“you claim that it is unethical to trade $15 in cards for $21 in cards”

No no no! You misunderstand the position, here. It’s not unethical to trade 15 for 21 – what’s unethical is to present that trade as even to your trading partner. This includes keeping mum about the imbalance – a lie of omission is still a lie, and just as dishonest.

If the other guy knows you’re trading for profit, and is cool with it, then the trade is ethical. You don’t have to go into specifics or reveal your ‘trade secrets’ (you don’t need to tell him that only want his Koth because you know a guy who desperately needs it for the tournament tomorrow), just let him know that you’re in it for value.

(Obviously if the trade is actually even, based on market value, this doesn’t apply.)

Also, the phrase you’re looking for in the Null Rod/Captivating Vampire example is utility. The Vampire in your binder does nothing – it doesn’t even beat for 2, the bare minimum we ask of most cards! – but the same Vampire in the girlfriend’s deck can win games, and more importantly, make her happy. By moving the Vampire into a deck, you increase the utility of the Vampire.

Making profit by increasing the utility of cards is definitely a value-adding process (this is the major point Peter Jahn’s article missed), and quite ethical. Making a profit off of sheer ignorance – not so much! If you want to wear the ‘white hat’, you need to figure out how to do the former without doing the latter.

No no no! You misunderstand the position, here. It's not unethical to trade 15 for 21 – what's unethical is to [i]present that trade as even[/i] to your trading partner. This includes keeping mum about the imbalance – a lie of omission is still a lie, and just as dishonest.

If the other guy knows you're trading for profit, and is cool with it, then the trade is ethical. You don't have to go into specifics or reveal your 'trade secrets' (you don't need to tell him that only want his Koth because you know a guy who desperately needs it for the tournament tomorrow), just let him know that you're in it for value.

(Obviously if the trade is actually even, based on market value, this doesn't apply.)

Also, the phrase you're looking for in the Null Rod/Captivating Vampire example is [i]utility[/i]. The Vampire in your binder does nothing – it doesn't even beat for 2, the bare minimum we ask of most cards! – but the same Vampire in the girlfriend's deck can win games, and more importantly, make her happy. By moving the Vampire into a deck, you increase the utility of the Vampire.

Making profit by increasing the utility of cards is definitely a value-adding process (this is the major point Peter Jahn's article missed), and quite ethical. Making a profit off of sheer ignorance – not so much! If you want to wear the 'white hat', you need to figure out how to do the former without doing the latter.

Paul,
Thank you for taking the time to write out such a thoughtful response, this is the level of discussion I hoped to generate with this piece.
On the whole, I agree with nearly everything you said. And I agree with much of what Pete said. The problem is he makes extreme generalizations by stereotyping traders (and even P2P traders).

A few things I wanted to address:
– Pete unequivocally calls P2P trading a zero-sum process, which is why I addressed that. The quote from his article:
"The flip side, of course, is that this is only possible if his trading partners have lost a lot of money. This sort of trading is a zero sum game. No value has been added in the process. The only thing that has changed is the ownership of the cards."

– Many traders don't share their information with their trading partners, which results in unequal information, I understand that. My problem is that Pete lumped every single "value trader" into this category in his article. I have a personal ethics system that keeps me from "ripping off" children or genuinely uninformed players. Five days a week a writer on this site discourages the type of trading Pete claims to have a problem with, and he does not mention that anywhere in his nearly 3000-word article. I was personally offended because it seems that he and I align pretty closely on the ethics of trading, and yet he lumps me into a group that he claims is stealing. I have a problem with that.

– It is entirely possible to do a P2P on sound ethical ground. If you are trading with someone who thinks themselves a shark, would you correct them like you would a 14-year-old kid with his first booster? This is where I draw the line. Since you are new to the site, you probably haven't read much of my work. I will trade on whatever grounds my partner wants. If he wants to quote prices at me, I'll take a hard stance and take advantage of his misinformation. I don't lose sleep over this because he is trying to do the same to me. If I'm trading with a casual player with little-to-no knowledge of prices I don't even bring numbers to the table, because it can intimidate these players, but that does NOT mean I am planning on ripping them off. I keep a mental tally of our trade and make sure it works out to what I consider fair value.

Again, thank you for your feedback and I hope to see you back on QS.

I did not extract "zero sum" ideology from Pete's article. I think Pete is intelligent enough to see that different people place different values on things. (After all they are just things right?) But I also think his point is that while there are differing values from personal perspectives there is a mean objective value that good traders know about.

Trading "up" is an art-form (I've done quite a bit of that in my past as a paper player.) This can be achieved with an eye towards ethics or by ignoring them. I think THIS is what Pete's main point is. People who trade with knowledge of the market value (or mean objective value) of an item is and take advantage of the fact that their trade partner does not know this information are trading unethically. Sure Timmy might really want the gigantosaurus rex card for their dinodragonbot collection but if it's worth a nickle then taking megaomgwtfweretheythinking mythic in trade (worth mega $$$ on the market) for it is just robbery.

Even if both parties are happy, because one is ignorant they are being ripped off, and the other because they are the one getting away with it, someone is losing out. This doesn't mean every uneven trade is unethical or bad. Ive trade 3-4x the value of a card I was asking for just because I wanted the card (betas for example.) I knew the values and made an informed decision. Now if I was trading 3-4x value for a card I didn't know the value of I'd feel pretty bad once I found out how much I'd been taken for. Again by value here I am not referring to how much I valued betas for but how much their average price on the market was.

Wanting something for nothing, getting over on someone, lying because it is easier than being truthful are all human traits. Throw a rock in a group of people you are bound to hit someone who has done or felt these things. The difference is acting on it. As someone who has done plenty of wrong in my past I am acute aware of where my ethical boundaries are. I do believe many mtg(o) players are not as intune this way. Many are still adolescent or even children themselves if only in maturity level. Personal ethics are something that grow with a person as they become adults. Not everyone achieves the same set.

I do believe the point Pete was making was that uneven information in trading may lead to unethical decisions. I don't even think this point is debatable. The most you can say is "well no one I know does that." (I'd disagree, because inevitably someone you know will try to get a fast buck, if not off you, then someone else) or potentially "Well there is that one guy but everyone stays away from him by consensus." And pariahs are harder to spot and deal with online because of the anonymous nature of user accounts.

It amazes me how strongly people reacted to Pete's article considering that it is about a topic that is so well known and discussed. Sure he did call a group of people out (The pack to power writers) but there were plenty of responses from other people on all sides of this apparently still controversial subject. (One I wrote about years ago concerning paper trades.) I lament that trading is not fun online and yet at the same time I suppose that is to the better if the end result is so much emotion spent arguing about it. If Trading were easier online I imagine it would be fraught with subtler perils than exist now.

Thanks for sharing.
Paul Emerson Leicht
Winter.Wolf on Modo

Corbin your article was very well written in trying to get across the view of a trader that sees the value of cards differently. It is true that the value of cards is all relative to the person who owns them. Just today someone offered me a trade of a Jace Beleren and a foil Temple Bell for a Jace, the Mindsculptor because the shop didn't accept it as a buy. In my right mind I could not accept this trade and told the guy to go back to shopping in my binder for a lot more cards. Not everyone would do what I did and he knew that, just because we love to trade does not mean we are heartless.

Trade something that isn't worth much to you for something that is worth more to you. Your trade partner is seeking to do the same thing. You agree on the trade and voila – we both gained.