The Sealed Envelopes

Two merchants agreed to exchange trade secrets. Each would place his knowledge in a sealed envelope and hand it to the other at noon.

The night before, each merchant faced the same temptation. He could put real secrets in the envelope, or worthless information. If both shared genuinely, both gained. If one cheated while the other was honest, the cheater gained a rival’s secrets for free. If both cheated, neither gained anything — but neither lost anything either.

Each merchant sat at his desk, pen in hand, reasoning: “If he’s honest, I gain more by cheating — I get his secrets and keep mine. If he cheats, I lose less by cheating too — at least I haven’t given away my knowledge for nothing.”

At noon, two envelopes of worthless paper changed hands. Both merchants walked away with exactly what they deserved — and far less than what they could have had.