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# CORPUS-0005
## Rumor Before Confirmed Price
### Status: Training Corpus Seed
### Layer: Layer_1--Worked_Examples
### Purpose: Teach that a trader may act before a destination price is confirmed, but the final arithmetic still depends on the actual settled price
### Repository Path: docs/training/corpus/Layer_1--Worked_Examples/CORPUS-0005-rumor-before-confirmed-price.md
---
## 0. Scenario
A trader in Ostia hears a report that oil is selling high in Capua.
The report is not confirmed.
The trader must decide whether to act before certainty arrives.
The rumor may create opportunity because other traders have not yet reacted.
The rumor may also create loss if the report is stale, exaggerated, or wrong.
---
## 1. Known Facts
| Fact | Value |
|---|---:|
| Origin | Ostia |
| Destination | Capua |
| Good | oil |
| Purchase price in Ostia | 10 asses |
| Total expected movement and handling cost | 6 asses |
| Rumored sale price in Capua | 22 asses |
| Confirmed sale price in Capua | unknown |
Expected total cost:
```text
10 + 6 = 16 asses
```
If the rumor is true:
```text
22 - 16 = 6 asses expected profit
```
But this is not yet actual profit.
---
## 2. Source Of The Rumor
The trader hears the report from a muleteer who arrived from the Capua road.
The muleteer says:
> Buyers in Capua are paying 22 asses for oil.
The trader must evaluate:
- when the muleteer left Capua
- whether he saw a sale or repeated talk
- whether the price was for ordinary oil or better quality oil
- whether one urgent buyer caused an unusual price
- whether another shipment has arrived since then
- whether the muleteer benefits if the trader hires his cart
The report may be useful without being certain.
---
## 3. Possible Outcomes
### Outcome A — Rumor True
The oil sells for 22 asses.
```text
sale value = 22 asses
total cost = 16 asses
result = 6 asses profit
```
The trader benefited from acting early.
### Outcome B — Rumor Stale
A rival shipment reached Capua first.
The oil sells for 17 asses.
```text
sale value = 17 asses
total cost = 16 asses
result = 1 as profit
```
The venture barely succeeds.
### Outcome C — Rumor Wrong
The price was exaggerated or misunderstood.
The oil sells for 14 asses.
```text
sale value = 14 asses
total cost = 16 asses
result = 2 asses loss
```
The trader acted on bad information.
---
## 4. Correct Model Behavior
The model should separate:
| Category | Meaning |
|---|---|
| rumored price | price reported before confirmation |
| expected profit | result if the rumor is accurate |
| actual sale price | price received at settlement |
| final arithmetic result | sale value minus total cost |
| information quality | reliability of the source and report |
Rumor can justify action.
Rumor cannot replace settlement.
---
## 5. Incorrect Model Behavior
The model should not:
- treat rumored price as confirmed price
- ignore the age of the report
- ignore source credibility
- assume all Capua oil sells for the same price
- ignore quality differences
- calculate final profit from rumor alone
- treat a good rumor outcome as proof the rumor was certain
---
## 6. Why Acting On Rumor Can Be Rational
Waiting for confirmation reduces uncertainty.
But waiting can also reduce opportunity.
If the trader waits:
- rivals may buy available oil first
- cart space may be reserved
- Capua prices may change
- the buyer may satisfy demand elsewhere
- the margin may close
Acting on rumor is not irrational.
It is a choice to accept information risk in exchange for timing advantage.
---
## 7. Layer-0 Concepts Used
This example uses:
- `CORPUS-0002-goods-have-local-prices`
- `CORPUS-0005-profit-is-sale-minus-total-cost`
- `CORPUS-0006-delay-is-economic-cost`
- `CORPUS-0007-information-arrives-unevenly`
- `CORPUS-0008-rumor-is-uncertain-information`
- `CORPUS-0012-every-venture-risks-loss`
- `CORPUS-0018-rivalry-changes-conditions`
---
## 8. Success Condition
If the model can act on rumor as uncertain information while still calculating final profit only from confirmed settlement values, this file is functioning correctly.