April 15, 2019

10 Lessons from Magic the Gathering

Black Lotus

15 years ago I was a vicious little Magic the Gathering card collector.

I loved every aspect of it:

  • the artwork,
  • the strategy of playing the game,
  • and most important: trading the cards themselves.

Here’s a Top-10 list of life lessons I learned as a middle school Magic card trader:

1. Auction environments are fun

Trading is exhilarating.

You learn a lot about what people care about, and how to get people to share with you what it is that they care about.

2. Asymmetric information is your edge

You can conquer the market by having the most information.

Get info on who has which cards, how rare the cards are, and who has demand.

3. Punish bad actors

No one trades with an asshole. Assholes will:

  • “shop” their bad trades around trying to find a sucker,
  • use coercion (e.g. wedgies, tittie-twisters),
  • cry about their ill-fortune

A healthy community will punish assholes by blacklisting them from trades.

They may have to buy their way back into good favor by taking a bad trade to prove their standing.

4. Find secondary market liquidity

Lunchtime isn’t the only marketplace for trading.

You can meet outside of school, find new participants, and pay for new cards from the store.

5. Batch trades are sometimes easier

Let your counterparty feel in-control by offering to increase the deal size + scope.

This signals that you care about finding a trade that benefits everyone.

6. Understanding your counterparty’s intent

At least half of trade volume arises from asking counterparties to share what it is they are seeking.

They can’t say “yes” if you never ask (the same is true of dating 😉).

7. Track scarcity

Know who has which cards.

This makes you the fastest to be able to find counterparties for your trades.

This is how you capture “alpha” (risk-free profit).

8. Combinatorial discovery

Identify winning card combinations and educate other market participants on your findings.

They will come to you for consultation and “first look” at trades due to your reputation.

9. Price anchoring

Sometimes yelling “NO” has a strong effect on the market’s impression of an asset’s value.

10. Visual appeal

Some people are in the market because the artwork is cool.

Consider all the properties of your assets beyond the dollar-value.

A final lesson

People often confuse “competitive” with “zero-sum.”

In the long run, trading only happens because it’s consensual.