In the Outpsider case, what is the trick to expanding the pie and making the deal happen?
Giving Cade a job at the new magazine.
Raising the purchase price.
Providing Cade with health insurance coverage for his back.
Allowing Helen to keep writing articles.
Allowing Helen to keep getting ads at cost.
This creates value. The magazine has excess capacity in terms of space for ads, so it doesn’t cost them to provide an extra page of ads, beyond the $500 printing cost. Helen values the ads at $3,000/page, thus each ad page creates $2,500 of value. You might think the magazine could just sell the ads to Helen, but that doesn’t work. She isn’t willing to pay the full price of $4,500. If they discount the ads for her, then they have to offer the same discount to all the other advertisers.
