Saturday Night Science: Skin in the Game

“Skin in the Game” by Nassim Nicholas TalebThis book is volume four in the author’s Incerto series, following Fooled by Randomness, The Black Swan, and Antifragile. In it, he continues to explore the topics of uncertainty, risk, decision making under such circumstances, and how both individuals and societies winnow out what works from what doesn’t in order to choose wisely among the myriad alternatives available.

The title, “Skin in the Game”, is an aphorism which refers to an individual’s sharing the risks and rewards of an undertaking in which they are involved. This is often applied to business and finance, but it is, as the author demonstrates, a very general and powerful concept. An airline pilot has skin in the game along with the passengers. If the plane crashes and kills everybody on board, the pilot will die along with them. This insures that the pilot shares the passengers’ desire for a safe, uneventful trip and inspires confidence among them. A government “expert” putting together a “food pyramid” to be vigorously promoted among the citizenry and enforced upon captive populations such as school children or members of the armed forces, has no skin in the game. If his or her recommendations create an epidemic of obesity, type 2 diabetes, and cardiovascular disease, that probably won’t happen until after the “expert” has retired and, in any case, civil servants are not fired or demoted based upon the consequences of their recommendations.

Ancestral human society was all about skin in the game. In a small band of hunter/gatherers, everybody can see and is aware of the actions of everybody else. Slackers who do not contribute to the food supply are likely to be cut loose to fend for themselves. When the hunt fails, nobody eats until the next kill. If a conflict develops with a neighbouring band, those who decide to fight instead of running away or surrendering are in the front line of the battle and will be the first to suffer in case of defeat.

Nowadays we are far more “advanced”. As the author notes, “Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.” As populations have exploded, layers and layers of complexity have been erected, removing authority ever farther from those under its power. We have built mechanisms which have immunised a ruling class of decision makers from the consequences of their decisions: they have little or no skin in the game.

Less than a third of all Roman emperors died in their beds. Even though they were at the pinnacle of the largest and most complicated empire in the West, they regularly paid the ultimate price for their errors either in battle or through palace intrigue by those dissatisfied with their performance. Today the geniuses responsible for the 2008 financial crisis, which destroyed the savings of hundreds of millions of innocent people and picked the pockets of blameless taxpayers to bail out the institutions they wrecked, not only suffered no punishment of any kind, but in many cases walked away with large bonuses or golden parachute payments and today are listened to when they pontificate on the current scene, rather than being laughed at or scorned as they would be in a rational world. We have developed institutions which shift the consequences of bad decisions from those who make them to others, breaking the vital feedback loop by which we converge upon solutions which, if not perfect, at least work well enough to get the job done without the repeated catastrophes that result from ivory tower theories being implemented on a grand scale in the real world.

Learning and Evolution

Being creatures who have evolved large brains, we’re inclined to think that learning is something that individuals do, by observing the world, drawing inferences, testing hypotheses, and taking on knowledge accumulated by others. But the overwhelming majority of creatures who have ever lived, and of those alive today, do not have large brains—indeed, many do not have brains at all. How have they learned to survive and proliferate, filling every niche on the planet where environmental conditions are compatible with biochemistry based upon carbon atoms and water? How have they, over the billions of years since life arose on Earth, inexorably increased in complexity, most recently producing a species with a big brain able to ponder such questions?

The answer is massive parallelism, exhaustive search, selection for survivors, and skin in the game, or, putting it all together, evolution. Every living creature has skin in the ultimate game of whether it will produce offspring that inherit its characteristics. Every individual is different, and the process of reproduction introduces small variations in progeny. Change the environment, and the characteristics of those best adapted to reproduce in it will shift and, eventually, the population will consist of organisms adapted to the new circumstances. The critical thing to note is that while each organism has skin in the game, many may, and indeed must, lose the game and die before reproducing. The individual organism does not learn, but the species does and, stepping back another level, the ecosystem as a whole learns and adapts as species appear, compete, die out, or succeed and proliferate. This simple process has produced all of the complexity we observe in the natural world, and it works because every organism and species has skin in the game: its adaptation to its environment has immediate consequences for its survival.

None of this is controversial or new. What the author has done in this book is to apply this evolutionary epistemology to domains far beyond its origins in biology—in fact, to almost everything in the human experience—and demonstrate that both success and wisdom are generated when this process is allowed to work, but failure and folly result when it is thwarted by institutions which take the skin out of the game.

How does this apply in present-day human society? Consider one small example of a free market in action. The restaurant business is notoriously risky. Restaurants come and go all the time, and most innovations in the business fall flat on their face and quickly disappear. And yet most cities have, at any given time, a broad selection of restaurants with a wide variety of menus, price points, ambiance, and service to appeal to almost any taste. Each restaurant has skin in the game: those which do not attract sufficient customers (or, having once been successful, fail to adapt when customers’ tastes change) go out of business and are replaced by new entrants. And yet for all the churning and risk to individual restaurants, the restaurant “ecosystem” is remarkably stable, providing customers options closely aligned with their current desires.

To a certain kind of “expert” endowed with a big brain (often crammed into a pointy head), found in abundance around élite universities and government agencies, all of this seems messy, chaotic, and (the horror!) inefficient. Consider the money lost when a restaurant fails, the cooks and waiters who lose their jobs, having to find a new restaurant to employ them, the vacant building earning nothing for its owner until a new tenant is found—certainly there must be a better way. Why, suppose instead we design a standardised set of restaurants based upon a careful study of public preferences, then roll out this highly-optimised solution to the problem. They might be called “public feeding centres”. And they would work about as well as the name implies.

Survival and Extinction

Evolution ultimately works through extinction. Individuals who are poorly adapted to their environment (or, in a free market, companies which poorly serve their customers) fail to reproduce (or, in the case of a company, survive and expand). This leaves a population better adapted to its environment. When the environment changes, or a new innovation appears (for example, electricity in an age dominated by steam power), a new sorting out occurs which may see the disappearance of long-established companies that failed to adapt to the new circumstances. It is a tautology that the current population consists entirely of survivors, but there is a deep truth within this observation which is at the heart of evolution. As long as there is a direct link between performance in the real world and survival—skin in the game—evolution will work to continually optimise and refine the population as circumstances change.

This evolutionary process works just as powerfully in the realm of ideas as in biology and commerce. Ideas have consequences, and for the process of selection to function, those consequences, good or ill, must be borne by those who promulgate the idea. Consider inventions: an inventor who creates something genuinely useful and brings it to market (recognising that there are many possible missteps and opportunities for bad luck or timing to disrupt this process) may reap great rewards which, in turn, will fund elaboration of the original invention and development of related innovations. The new invention may displace existing technologies and cause them, and those who produce them, to become obsolete and disappear (or be relegated to a minor position in the market). Both the winner and loser in this process have skin in the game, and the outcome of the game is decided by the evaluation of the customers expressed in the most tangible way possible: what they choose to buy.

Now consider an academic theorist who comes up with some intellectual “innovation” such as “Modern Monetary Theory” (which basically says that a government can print as much paper money as it wishes to pay for what it wants without collecting taxes or issuing debt as long as full employment has not been achieved). The theory and the reputation of those who advocate it are evaluated by their peers: other academics and theorists employed by institutions such as national treasuries and central banks. Such a theory is not launched into a market to fend for itself among competing theories: it is “sold” to those in positions of authority and imposed from the top down upon an economy, regardless of the opinions of those participating in it. Now, suppose the brilliant new idea is implemented and results in, say, total collapse of the economy and civil society? What price do those who promulgated the theory and implemented it pay? Little or nothing, compared to the misery of those who lost their savings, jobs, houses, and assets in the calamity. Many of the academics will have tenure and suffer no consequences whatsoever: they will refine the theory, or else publish erudite analyses of how the implementation was flawed and argue that the theory “has never been tried”. Some senior officials may be replaced, but will doubtless land on their feet and continue to pull down large salaries as lobbyists, consultants, or pundits. The bureaucrats who patiently implemented the disastrous policies are civil servants: their jobs and pensions are as eternal as anything in this mortal sphere. And, before long, another bright, new idea will bubble forth from the groves of academe.

(If you think this hypothetical example is unrealistic, see the career of one Robert Rubin. “Bob”, during his association with Citigroup between 1999 and 2009, received total compensation of US$126 million for his “services” as a director, advisor, and temporary chairman of the bank, during which time he advocated the policies which eventually brought it to the brink of collapse in 2008 and vigorously fought attempts to regulate the financial derivatives which eventually triggered the global catastrophe. During his tenure at Citigroup, shareholders of its stock lost 70% of their investment, and eventually the bank was bailed out by the federal government using money taken by coercive taxation from cab drivers and hairdressers who had no culpability in creating the problems. Rubin walked away with his “winnings” and paid no price, financial, civil, or criminal, for his actions. He is one of the many poster boys and girls for the “no skin in the game club”. And lest you think that, chastened, the academics and pointy-heads in government would regain their grounding in reality, I have just one phrase for you, “trillion dollar coin”, which “Nobel Prize” winner Paul Krugman declared to be “the most important fiscal policy debate of our lifetimes”.)

Intellectual Yet Idiot

A cornerstone of civilised society, dating from at least the Code of Hammurabi (c. 1754 B.C.), is that those who create risks must bear those risks: an architect whose building collapses and kills its owner is put to death. This is the fundamental feedback loop which enables learning. When it is broken, when those who create risks (academics, government policy makers, managers of large corporations, etc.) are able to transfer those risks to others (taxpayers, those subject to laws and regulations, customers, or the public at large), the system does not learn; evolution breaks down; and folly runs rampant. This phenomenon is manifested most obviously in the modern proliferation of the affliction the author calls the “intellectual yet idiot” (IYI). These are people who are evaluated by their peers (other IYIs), not tested against the real world. They are the equivalent of a list of movies chosen based upon the opinions of high-falutin’ snobbish critics as opposed to box office receipts. They strive for the approval of others like themselves and, inevitably, spiral into ever more abstract theories disconnected from ground truth, ascending ever higher into the sky.

Many IYIs achieve distinction in one narrow field and then assume that qualifies them to pronounce authoritatively on any topic whatsoever. As was said by biographer Roy Harrod of John Maynard Keynes,

He held forth on a great range of topics, on some of which he was thoroughly expert, but on others of which he may have derived his views from the few pages of a book at which he happened to glance. The air of authority was the same in both cases.

Still other IYIs have no authentic credentials whatsoever, but derive their purported authority from the approbation of other IYIs in completely bogus fields such as gender and ethnic studies, critical anything studies, and nutrition science. As the author notes, riding some of his favourite hobby horses,

Typically, the IYI get first-order logic right, but not second-order (or higher) effects, making him totally incompetent in complex domains.

The IYI has been wrong, historically, about Stalinism, Maoism, Iraq, Libya, Syria, lobotomies, urban planning, low-carbohydrate diets, gym machines, behaviorism, trans-fats, Freudianism, portfolio theory, linear regression, HFCS (High-Fructose Corn Syrup), Gaussianism, Salafism, dynamic stochastic equilibrium modeling, housing projects, marathon running, selfish genes, election-forecasting models, Bernie Madoff (pre-blowup), and p values. But he is still convinced his current position is right.

Doubtless, IYIs have always been with us (at least since societies developed to such a degree that they could afford some fraction of the population who devoted themselves entirely to words and ideas)—Nietzsche called them “Bildungsphilisters”—but since the middle of the twentieth century they have been proliferating like pond scum, and now hold much of the high ground in universities, the media, think tanks, and senior positions in the administrative state. They believe their models (almost always linear and first-order) accurately describe the behaviour of complex dynamic systems, and that they can “nudge” the less-intellectually-exalted and credentialed masses into virtuous behaviour, as defined by them. When the masses dare to push back, having a limited tolerance for fatuous nonsense, or being scolded by those who have been consistently wrong about, well, everything, and dare vote for candidates and causes which make sense to them and seem better-aligned with the reality they see on the ground, they are accused of—gasp—populism, and must be guided in the proper direction by their betters, their uncouth speech silenced in favour of the cultured “consensus” of the few.

One of the reasons we seem to have many more IYIs around than we used to, and that they have more influence over our lives is related to scaling. As the author notes, “it is easier to macrobull***t than microbull***t”. A grand theory which purports to explain the behaviour of billions of people in a global economy over a period of decades is impossible to test or verify analytically or by simulation. An equally silly theory that describes things within people’s direct experience is likely to be immediately rejected out of hand as the absurdity it is. This is one reason decentralisation works so well: when you push decision making down as close as possible to individuals, their common sense asserts itself and immunises them from the blandishments of IYIs.

The Lindy Effect

How can you sift the good and the enduring from the mass of ephemeral fads and bad ideas that swirl around us every day? The Lindy effect is a powerful tool. Lindy’s delicatessen in New York City was a favoured hangout for actors who observed that the amount of time a show had been running on Broadway was the best predictor of how long it would continue to run. A show that has run for three months will probably last for at least three months more. A show that has made it to the one year mark probably has another year or more to go. In other words, the best test for whether something will stand the test of time is whether it has already withstood the test of time. This may, at first, seem counterintuitive: a sixty year old person has a shorter expected lifespan remaining than a twenty year old. The Lindy effect applies only to nonperishable things such as “ideas, books, technologies, procedures, institutions, and political systems”.

Thus, a book which has been in print continuously for a hundred years is likely to be in print a hundred years from now, while this season’s hot best-seller may be forgotten a few years hence. The latest political or economic theory filling up pages in the academic journals and coming onto the radar of the IYIs in the think tanks, media punditry, and (shudder) government agencies, is likely to be forgotten and/or discredited in a few years while those with a pedigree of centuries or millennia continue to work for those more interested in results than trendiness.

Religion is Lindy. If you disregard all of the spiritual components to religion, long-established religions are powerful mechanisms to transmit accumulated wisdom, gained through trial-and-error experimentation and experience over many generations, in a ready-to-use package for people today. One disregards or scorns this distilled experience at one’s own great risk. Conversely, one should be as sceptical about “innovation” in ancient religious traditions and brand-new religions as one is of shiny new ideas in any other field.

(A few more technical notes…. As I keep saying, “Once Pareto gets into your head, you’ll never get him out.” It’s no surprise to find that the Lindy effect is deeply related to the power-law distribution of many things in human experience. It’s simply another way to say that the lifetime of nonperishable goods is distributed according to a power law just like incomes, sales of books, music, and movie tickets, use of health care services, and commission of crimes. Further, the Lindy effect is similar to J. Richard Gott’s Copernican statement of the Doomsday argument, with the difference that Gott provides lower and upper bounds on survival time for a given confidence level predicted solely from a random observation that something has existed for a known time.)

Uncertainty, Risk, and Decision Making

All of these observations inform dealing with risk and making decisions based upon uncertain information. The key insight is that in order to succeed, you must first survive. This may seem so obvious as to not be worth stating, but many investors, including those responsible for blow-ups which make the headlines and take many others down with them, forget this simple maxim. It is deceptively easy to craft an investment strategy which will yield modest, reliable returns year in and year out—until it doesn’t. Such strategies tend to be vulnerable to “tail risks”, in which an infrequently-occurring event (such as 2008) can bring down the whole house of cards and wipe out the investor and the fund. Once you’re wiped out, you’re out of the game: you’re like the loser in a Russian roulette tournament who, after the gun goes off, has no further worries about the probability of that event. Once you accept that you will never have complete information about a situation, you can begin to build a strategy which will prevent your blowing up under any set of circumstances, and may even be able to profit from volatility. This is discussed in more detail in the author’s earlier Antifragile.

The Silver Rule

People and institutions who have skin in the game are likely to act according to the Silver Rule: “Do not do to others what you would not like them to do to you.” This rule, combined with putting the skin of those “defence intellectuals” sitting in air-conditioned offices into the games they launch in far-off lands around the world, would do much to save the lives and suffering of the young men and women they send to do their bidding.

Taleb, Nassim Nicholas. Skin in the Game. New York: Random House, 2018. ISBN 978-0-425-28462-9.

Here is a one hour talk by Nassim Nicholas Taleb at Google about the book.


Author: John Walker

Founder of, Autodesk, Inc., and Marinchip Systems. Author of The Hacker's Diet. Creator of

16 thoughts on “Saturday Night Science: Skin in the Game

  1. Terrific post and to those who have never owned a business, The Silver Rule is absolutely critical not only to employees but most importantly to the vendors you do business with. Trust is key and helped grow my sports business exponentially; I was given 90 day payment schedules, with liberal return and exchange policies and an unlimited open to buy.

    I grew one of my sports businesses (baseball) from a mere $30k annually to a million in 13 months. This is because we had developed a sound business relationship with the salesman and the owner; we literally had unlimited risk and consequently, were comfortable taking risks and were certain to pay our bills on time. We wrote more sports business in So Cal than Nordstrom and were also able to meet minimums to bring in special product, unique to our stores only. And I’m not too modest to tell you that my hero Derek Jeter (when he was in town for an Angels game) took notice.

    I never had so much fun in my life!

  2. How should we view the players in the key government positions(the Swamp) involved in this conflict with President Trump? Skin in the Game? There is an investigation now into the acts leading to the extensive Russia election involvement. It could result in a number of Obama Administration players being charged with crimes if some of the suggested scenarios are true. Is the Silver Rule to be applied by those officials in the Trump Administration? If Trump were to fail in his bid for re-election in 2020, what should we expect?

  3. Bob Thompson:
    How should we view the players in the key government positions(the Swamp) involved in this conflict with President Trump? Skin in the Game?

    It seems to me that not having skin in the game is very close to the definition of what it means to be a swamp creature.  Another word Taleb uses for them is “interventionistas”: those who believe that they can intervene, whether in other countries or the lives of U.S. citizens (see Jonathan Gruber: “the American people are too stupid to understand the difference”, for example).  Historically, they have paid no price for the consequences of following their advice.  Draining the swamp means putting their skin in the game, precisely as would happen to a contractor who failed to perform in a Trump building project.  At the very least, they should lose their jobs or contracts, and never be considered for further employment.  This will encourage their replacements to behave responsibly and perform.

    The people trying to bring Trump down believed they were immune from consequences.  First of all, Hillary was going to win, and nobody would look further into what happened.  When that didn’t happen, they could rely on the other members of the club and their allies in Congress to protect them.  The last few years have shown just how hard a nut to crack that has been.  Their rule is that outsiders are not allowed into the club, and can be subverted by any means possible.  If Trump loses in 2020, I expect them to seek their revenge.

    Here is an interview with Taleb by Ron Paul which goes more deeply into interventionistas.  I did not include it in the main post because it’s not a central issue in the book, but it’s relevant to the issues raised in your comment.

  4. Bob Thompson:
    How should we view the players in the key government positions(the Swamp) involved in this conflict with President Trump?

    These are my thoughts:

    1. I hope the Socialists turn off the electorate as they did me. I actually felt sorry for Biden last night because he supported his president and got no endorsement whatsoever. I do wish he would drop out because he could possibly get a sympathy vote from Indies if he stays in the race. BHO got nailed (for the wrong reasons) but I won’t lie- he deserved it.

    2. Trump needs to continue the high octane tweets about socialism.

  5. I think Bryan, it’s because we don’t make the right decisions at the right times. Especially when we need to be aware of our lack of knowledge.  I don’t know law, I can analyses things but not be able to put them into practice.


  6. Great post–I enjoyed reading it. One thought:

    If you disregard all of the spiritual components to religion, long-established religions are powerful mechanisms to transmit accumulated wisdom, gained through trial-and-error experimentation and experience over many generations, in a ready-to-use package for people today. One disregards or scorns this distilled experience at one’s own great risk. Conversely, one should be as sceptical about “innovation” in ancient religious traditions and brand-new religions as one is of shiny new ideas in any other field.

    If we disregard all of the spiritual components to religion, isn’t that an innovation? 😉


  7. 10 Cents:

    Bryan G. Stephens:
    No matter how good a person I am, or how well I treat people, I am have not made it to riches

    It all depends on what scale you are using, Bryan. I think I am rich because of all the freedom I have.

    I am constrained at every turn but events. It is not a complaint. Doing the right thing for others just does not always pay off for you.

  8. JJ:
    If we disregard all of the spiritual components to religion, isn’t that an innovation? 😉

    Chapter 15 of Skin in the Game is titled “They Don’t Know What They Are Talking About When They Talk about Religion” (capitalisation as in the original).  In it, Taleb observes that different religions have different definitions of the word “religion”, and that this has led to a great deal of confusion when those from one religious tradition assume their definition applies to others.

    Different people rarely mean the same thing when they say “religion,” nor do they realize it.  For early Jews and Muslims, religion was law.  Din means law in Hebrew and religion in Arabic.  For early Jews, religion was also tribal; for early Muslims, it was universal.  For the Romans, religion was social events, rituals, and festivals—the word religio was a counter to superstitio, and while present in the Roman zeitgeist it had no equivalent concept in the Greek-Byzantine East.  Throughout the ancient world, law was procedurally and mechanically its own thing.  Early Christianity, thanks to Saint Augustine, stayed relatively away from the law, and, later, remembering its origins, had an uneasy relation with it.  For instance, even during the Inquisition, a lay court formally handled final sentencing.

    Thus, the component of a religion which can be considered “spiritual”, or even the definition of “spiritual”, varies across religions.  What I was trying to get at is that, setting this aside, what is common to just about all ancient religions is that they provide a set of rules, guidelines, and/or goals by which to live, which are the product of long experience by those who follow those traditions.  Religions which have survived for many centuries or millennia are Lindy—they have withstood the test of time, while many others have come and gone.  An evolutionist would conclude that they equip their believers to propagate the religion from generation to generation.

    You can read a preliminary draft of part of chapter 15 of Skin in the Game at

  9. Bryan G. Stephens:
    Doing the right thing for others just does not always pay off for you.

    Indeed—I’d say in the majority of cases doing the right thing for others is neutral: it neither pays off nor costs you in the future.  The Silver Rule (which Taleb sometimes refers to as the “negative golden rule”) is somewhat different in application and, I think, more likely to produce a tangible net gain.  In the glossary, he expands upon it by observing, “Note the difference from the Golden Rule, as the silver one prevents busybodies from attempting to run your life.”

    An early statement of the Silver Rule applied to international relations was by Isocrates in the fifth century B.C.:

    Deal with weaker states as you think it appropriate for stronger states to deal with you.

    I suspect that Taleb’s experience as a trader reinforced his appreciation of the Silver Rule.  When you make a trade, disclosing all relevant information to your counterparty, even if it results in a lower price or causes the transaction not to be made, is not only the right (ethical) thing to do, but also practical and will result in a better outcome for you over time.  Traders deal with one another constantly.  If you develop a reputation for deception or withholding relevant information, you can expect others to either treat you the same way or else decline to do business with you.

    There is a word in Arabic, gharar (غرر), which is usually translated as uncertainty or deception, but which Taleb interprets as meaning something more sophisticated: inequality of uncertainty.  In other words, both parties to a transaction should have equal uncertainty about the items involved.  If the seller knows of a defect and fails to disclose it to the buyer, he has committed gharar, but is blameless if a defect which is later discovered was unknown at the time of the transaction.  This is expressed in the Sharia manual Reliance of the Traveller as:

    k5.1  Whoever knows of a defect in the article (O: he is selling) is obliged to disclose it.  If he does know, he has cheated (O: the buyer, which is prohibited by the Prophet’s statement (Allah bless him and give him peace), “He who cheats is not one of us”), though the transaction is valid (A: provided the buyer accepts it, as discussed below).

    Here is an example of the Silver Rule from my career.  Shortly before Autodesk’s IPO, we were approached by a patent troll who had obtained a bogus patent on a technique (called the XOR cursor) for drawing a cursor on a screen without destroying the data over which it passed.  The technique had been in common use in the computer graphics field for more than a decade before the patent was filed on this “invention”.  This troll threatened litigation which would require adding a risk factor to the prospectus, reserving against litigation costs (and including that in the forecast financials), reprinting and re-issuing the prospectus, and likely delaying the offering, all of which would end up costing in excess of US$150,000.  Or, we could pay him off for US$25,000 for a “license” to use his bogus patent and he’d go away.  Very, very grudgingly, I wrote the check.  A couple of years later, the same troll was on the verge of bankruptcy and approached us to buy out his patent, which still had some years to run.  If this had been a cold approach, I would have probably bought the patent (which I think he was offering for around US$25,000—the same we’d paid a few years before to “license” it) just to place it in the public domain and stake this particular bloodsucker which had been afflicting everybody in the computer graphics business, hardware and software.  Had he applied the Silver Rule, that is what would have probably happened.  But he didn’t and it came back and bit him: I responded to his approach by saying, “We don’t negotiate with terrorists”, and that was that.

  10. John Walker:
    I suspect that Taleb’s experience as a trader reinforced his appreciation of the Silver Rule.  When you make a trade, disclosing all relevant information to your counterparty, even if it results in a lower price or causes the transaction not to be made, is not only the right (ethical) thing to do, but also practical and will result in a better outcome for you over time.  Traders deal with one another constantly.  If you develop a reputation for deception or withholding relevant information, you can expect others to either treat you the same way or else decline to do business with you.

    This is classic game theory for iterated games. The trouble is that there are plenty of games that are only played once with the same players.* The strategy for the Prisoner’s Dilemma is very different depending on whether the game is iterated or not. If I recall, Taleb takes up this issue in one of his books. Nevertheless, I’m with Naval Ravikant, who is fond of saying that life is an iterated game.

    *E.g., buying a house, remodeling a kitchen.

  11. KayofMT:
    I think Bryan, it’s because we don’t make the right decisions at the right times. Especially when we need to be aware of our lack of knowledge.  I don’t know law, I can analyses things but not be able to put them into practice.

    Every choice I have made on my career appears to have been the wrong one thus far. You are right, I did not have the information needed.


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