| Joe seeks Item X from Mary, but Mary has no personal use for anything that Joe would want to offer in exchange. Similarly, Mary would like Item Y from Edward, but has no item to offer in trade that is valued by Edward. Finally, Edward seeks Item M, but cannot provide anything in return that Joe values. The situation is depicted at right, showing only the highest value on each value scale for simplicity. If we consider only the immediate personal use-values of Items X, Y, and M, then it seems as if no mutually beneficial exchanges are possible.
Mary, however, sees an opportunity to increase her subjective utility. She offers Item X to Joe in exchange for Item M (Exchange #1). Then she trades Item M to Edward in exchange for Item Y (Exchange #2). |
|
Joe
 Item X
stock:
Item M |
Mary
Item Y
stock:
Item X |
Edward
Item M
stock:
Item Y |
|
| Stocks |
Joe |
Mary |
Edward |
| Initial |
M | X | Y |
| After Exchange #1
|
X | M | Y |
| After Exchange #2
|
X | Y | M |
|
). 
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