Actually, each party had an account payable equal to an

account receivable, so they were not only not "in debt,"

at least with respect to those particular accounts, but it

did not require any new transaction to net them out.

-----Original Message-----
From: Behavioral-Finance@yahoogroups.com [mailto:Behavioral-Finance@yahoogroups.com] On Behalf Of pgreenfinch
Sent: Saturday, July 04, 2009 6:56 AM
To: Behavioral-Finance@yahoogroups.com
Subject: [Behavioral-Finance] The debt related logical fallacy

This fable seems to be the craze

http://scienceblogs.com/evolutionblog/2009/06/an_amusing_brainteaser.php

Of course, the trick is that it is assumed that

from the start everybody has zero net debt (equal

amount owed and amount lended.

So obviously a compensation that would cancel all

debts can take place even without the tourist and

its magical 100 $ bill.

The hotel owner could have used one of its room

as a discreet clearing house ;-)

But that outrageous fable seems to persist, and even

bring macroecpnomic interpretations by self appointed

pundits.

Peter

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