Several months ago, I stumbled onto a baseball article which intrigued me. In probably the best example of how an exchange of product and services doesn't have to have a winner and a loser, Major League Baseball witnessed a trade in 2009 that ultimately benefited every team involved. What is particularly odd about this trade is that there were more than two teams involved.
Three teams executed a trade which, over time, involved a fourth team. The three involved were Detroit, the New York Yankees, and Arizona. A player involved in the original trade passed through 4 more trades before landing with the St. Louis Cardinals. Essentially, this turned out to be a trade which allowed 4 teams to improve enough to reach the playoffs. Sure, it took 2 years, but at least everyone benefited.
As the saying goes, one person's trash is another person's treasure. It is sometimes assumed that there has to be a winner and a loser involved in every trade. But the networked nature of exchange can lead to net gains for all involved. In an example of Metcalfe's Law, 4 teams showed how markets can benefit everyone, even in baseball where there are usually winners and losers.
http://www.thepostgame.com/features/201109/perfect-trade-how-yankees-tigers-and-diamondbacks-all-got-steal
There is a philosophy in this country that you never 'leave anything on the table' when it comes to a transfer of any kind. A purchase, a trade, or an exchange should yield optimal results for you and you shouldn't worry about others. As a result, we can usually determine a winner and loser. A classic sports example of this was the "Herschel Walker Trade". All sides thought they were 'winning'. Clearly it wasn't as well thought out as some believed, as Dallas went on to win 3 Super Bowls on the back of this trade, while Minnesota got fleeced.
Wall Street frequently employs the win at all costs mindset. When you're seeking Alpha, it makes sense. At any given time, there is a fixed pool of money being traded, and the goal is to maximize your return from that pool. Then, of course, there's Beta, in which markets change, and you're less concerned with the pool of money but performance against the norm. Many Wall Streeters play poker because, it's the ultimate game of chasing Alpha returns through skill and chance. I play in Texas Hold'em tournaments and if you leave anything on the table on any given hand, you're likely to leave everything there in the end.
I was once told by a sales manager who had heard a client was facing some difficulties to "take them for all they've got". I was a bit reluctant, stating that we may find a time when we'd need this client's assistance because we rely on return business. In the end, I did as I was told, though I made it clear to the client I wasn't at all happy about it. Several years later, we did need their help. Their initial reaction was to say no, and remind us of the previous event. Eventually, they proved a better partner in the relationship than we were and stepped up.
This baseball trade, however, was unique. It isn't often that you can analyze a trade and not find an overall clear winner. It's a great example of how and why exchange takes place, even among groups that are competing with each other.
