diff --git a/docs/training/corpus/Layer_2--Uncertainty/CORPUS-0007-acting-before-certainty.md b/docs/training/corpus/Layer_2--Uncertainty/CORPUS-0007-acting-before-certainty.md new file mode 100644 index 0000000..4d23f83 --- /dev/null +++ b/docs/training/corpus/Layer_2--Uncertainty/CORPUS-0007-acting-before-certainty.md @@ -0,0 +1,224 @@ +# CORPUS-0007 +## Acting Before Certainty +### Status: Training Corpus Seed +### Layer: Layer_2--Uncertainty +### Purpose: Teach that a trader may rationally act before confirmation when timing advantage outweighs information risk +### Repository Path: docs/training/corpus/Layer_2--Uncertainty/CORPUS-0007-acting-before-certainty.md + +--- + +## 0. Scenario + +A trader in Ostia hears an uncertain report that oil prices are rising in Capua. + +He cannot confirm the report immediately. + +He must choose whether to act now, wait for confirmation, reduce the size of the venture, or ignore the report. + +Acting before certainty is risky. + +But waiting for certainty may close the opportunity. + +--- + +## 1. Initial Situation + +| Fact | Value | +|---|---:| +| Origin | Ostia | +| Destination | Capua | +| Good | oil | +| Purchase price in Ostia | 10 asses | +| Expected total movement cost | 6 asses | +| Rumored sale price in Capua | 24 asses | +| Confirmed sale price | unknown | +| Time required for confirmation | 2 days | +| Rival awareness | possible | + +If the rumor is true: + +```text +sale value = 24 asses +total cost = 16 asses +expected profit = 8 asses +``` + +But the sale value is not confirmed. + +--- + +## 2. Choice A — Act Immediately + +The trader buys oil and reserves transport now. + +Benefits: + +- may move before rivals +- may secure cart space before costs rise +- may reach Capua while demand remains high +- may preserve the full margin if the rumor is true + +Risks: + +- rumor may be wrong +- rumor may be stale +- quality or buyer terms may differ +- final sale price may be lower than expected + +Acting immediately preserves timing advantage but accepts information risk. + +--- + +## 3. Choice B — Wait For Confirmation + +The trader waits two days for better information. + +Benefits: + +- greater confidence +- better estimate of sale price +- reduced chance of acting on false report + +Risks: + +- rivals may act first +- cart space may be reserved +- Ostia purchase price may rise +- Capua demand may be satisfied +- margin may shrink or disappear + +Waiting reduces information risk but increases timing risk. + +--- + +## 4. Choice C — Reduce Exposure + +The trader sends a smaller cargo or reserves only partial transport. + +Benefits: + +- participates in possible opportunity +- limits loss if rumor is wrong +- preserves some liquidity +- keeps option open + +Risks: + +- smaller profit if rumor is true +- partial action may not secure full buyer relationship +- fixed costs may consume margin + +Reducing exposure is neither full action nor full waiting. + +It is a response to uncertainty. + +--- + +## 5. Outcome Examples + +### Outcome A — Immediate Action Succeeds + +```text +sale value = 24 asses +total cost = 16 asses +result = 8 asses profit +``` + +The trader benefited from acting before certainty. + +### Outcome B — Immediate Action Fails + +```text +sale value = 14 asses +total cost = 16 asses +result = 2 asses loss +``` + +The trader accepted information risk and lost. + +### Outcome C — Waiting Confirms But Closes Margin + +After two days, the trader learns the price is real, but rivals moved first. + +```text +sale value = 18 asses +total cost = 17 asses +result = 1 as profit +``` + +Waiting improved knowledge but reduced opportunity. + +--- + +## 6. Correct Model Behavior + +The model should compare: + +| Factor | Immediate Action | Waiting | +|---|---|---| +| information confidence | lower | higher | +| timing advantage | higher | lower | +| risk of bad report | higher | lower | +| risk of missed opportunity | lower | higher | +| rival exposure | lower | higher | +| margin preservation | possible | uncertain | + +Neither choice is automatically correct. + +The correct decision depends on margin, confidence, urgency, rivalry, and capacity to absorb loss. + +--- + +## 7. Incorrect Model Behavior + +The model should not: + +- require certainty before every action +- treat acting on uncertainty as automatically irrational +- treat fast action as always wise +- ignore the cost of waiting +- ignore rival movement during delay +- treat uncertainty as pure randomness +- judge decision quality only by final outcome + +A decision can be rational from known evidence and still fail. + +A decision can be reckless and still succeed. + +--- + +## 8. Decision Questions + +The trader must ask: + +- how large is the possible margin? +- how reliable is the report? +- how fast can the market change? +- who else may know? +- what is the cost of being wrong? +- what is the cost of waiting? +- can exposure be reduced? +- can transport or goods be reserved conditionally? +- will failure create a hard stop? + +--- + +## 9. Layer-0 And Layer-1 Concepts Used + +This example uses: + +- `Layer_0/CORPUS-0006-delay-is-economic-cost` +- `Layer_0/CORPUS-0007-information-arrives-unevenly` +- `Layer_0/CORPUS-0008-rumor-is-uncertain-information` +- `Layer_0/CORPUS-0012-every-venture-risks-loss` +- `Layer_0/CORPUS-0018-rivalry-changes-conditions` +- `Layer_1/CORPUS-0003-arithmetic-resolves-the-venture` +- `Layer_1/CORPUS-0005-rumor-before-confirmed-price` +- `Layer_1/CORPUS-0010-hard-stop-after-loss` +- `Layer_2/CORPUS-0006-confirmation-has-a-cost` + +--- + +## 10. Success Condition + +If the model can recognize that acting before certainty may be rational when timing advantage is valuable, while still preserving information risk and final arithmetic, this file is functioning correctly.