Bus 1050 1st Edition Lecture 13 Outline of Last Lecture I Sun Tzu from The Art of War 1 17 25 3 14 A The art of war B The basis of war C Opportunism D Flexibility Outline of Current Lecture II Film clip Miracle on 34th Street A Honesty vs Deception III Cicero from De Officiis A Grain Dealer example B House seller example C Diogenes v Antipater Current Lecture Film clip Not only is it important to be honest but also one must be completely honest At Macy s the Santa Claus would tell customers to go to other stores if they didn t have the products the customers wanted Although this may seem like an irrational thing to do the customers appreciate their honest and Macy s revenue goes up In this situation Macys is taking advantage of an opportunity where they are honest and receive and as a result have a larger income This implies that maybe you don t have to be deceptive in order to be successful Macys is concerned with their customers and what they need more than for their own profit Cicero The obligation of the seller These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute The story of the ring of invisibility is mentioned again Consider the power of invisibility the ability to conceal an injustice A specious appearance of expediency Example 1 The king who founded the city He decided it was more expedient for him to reign alone than to share the throne with his brother So he killed his brother Example 2 The foot race We are not required to sacrifice our own interests However we should not act unjustly in order to achieve an advantage The Grain Dealer Example There is a famine at Rhodes and the grain dealer who is headed to Rhodes sees more ships with grain heading to Rhodes He is the first to arrive Does he have the obligation to tell the residents of Rhodes that there is more grain on the way Antipater would say that yes the grain dealer has a social responsibility to the community and if he didn t tell them he d be cheating them Diogenes argues that one must declare any defects as far as it s required by law but otherwise the grain dealer has no other obligations In other words he believes the grain dealer is not required to tell them There is information asymmetry about the market here where the grain dealer knows more about the market than the customers do The house seller example There is an honest man who is selling a house but the house is unsanitary but has a reputation of being healthful There is vermin in the bedrooms and it s likely to collapse Should the house dealer tell the customers about the defects of the house Diogenes would argue that it s the buyers responsibility to learn about the condition of the house The concept of caveat emptor or buyer beware Antipater would say that by not telling the customer the house seller would be leading men astray In this situation there is information asymmetry about the goods because the seller knows more about the house than the buyer does Aquinas Concealment consists in trying for your own profit to keep others from finding out something that you know when it is for their interest to know Antipder tell the customer all that he knows if it s in their interest to know it One must think about the interest of the whole not oneself Diogenes only tell the customer what s required by law to tell If there s a shortage people hoard goods Taking advantage of a temporary good that s in high demand due to disaster is called gouging The wealthy will hoard if prices remain the same solve this by letting the price rise This is price rationing Letting the price rise when there is a good in demand because of a disaster leads to price rationing Information asymmetry the seller knows more about the marketplace than the buyer Acting in a way that is selfish and immoral Pg 248 Roman numeral 13 The House seller The house owner knows the house is filled with vermin and is likely to collapse and he sells it for more than it s worth Antipater says it s a crime deliberately leading a man astray Diogenes says that the salesman did not force the man to purchase the house To what extent does the seller have to share his knowledge Diogenes caveat emptor Why does the government intervene in the purchase and sell of a house In this situation because it s such an enormous amount of money the seller must share the defects of the house Cicero s view Duty of the grain dealer to not withhold information from customers The same goes for the house seller Concealing is one thing but concealing so you can profit from it is a dilemma Diogenes putting on the ring of invisibility