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