Skin in the Game
Skin in the Gameby Nassim Nicholas Taleb
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
If you inflict risk on others they are harmed, you need to pay some price for it. Just as you should treat others in the way you'd like to be treated, you would like to share the responsibility for events without unfairness and inequity. If you give an opinion, and someone follows it, you are morally obligated to be, yourself, exposed to its consequences. In case you are giving economic views: Don't tell me what you think," just tell me what's in your portfolio.
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Abhik Prasad@abhik﹒1d
Skin in the game cuts both ways
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
You do not want to win an argument. You want to win.
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D’Arcy Coolican@dcoolican﹒9mo
Most practical manifestation
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
So there is this other instance where filtering plays a role: fools of randomness are purged by reality so they stop harming others. Recall that it is at the foundation of evolution that systems get smart by elimination. There is another point: we may not know beforehand if an action is foolish-but reality knows.
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Alan Liang@al﹒1y
Taleb beautifully brings us full circle back to FBR. As our minds have evolved far more slowly than the complexity of our world, the only way for true learning regarding the nature of randomness to take place is not at the individual level, but at the system level.
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
In biology, learning is something that, through the filter of intergenerational selection, gets imprinted at the cellular level-skin in the game, I insist, is more filter than deterrence. Evolution can only happen if risk of extinction is present.
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Alan Liang@al﹒1y
Taleb explicitly spells out the central lesson of Skin in the Game, yet many still miss it. SITG is about system learning through evolutionary filtering, not incentives.
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
DEEPER INTO AGENCY
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Saulo Soares@saulo﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
age without values, life without effort, water without thirst, food without nourishment, love without sacrifice, power without fairness, facts without rigor, statistics without logic, mathematics without proof, teaching without experience, politeness without warmth, values without embodiment, degrees without erudition, militarism without fortitude, progress without civilization, friendship without investment, virtue without risk, probability without ergodicity, wealth without exposure, complication without depth, fluency without content, decision without asymmetry, science without skepticism, religion without tolerance, and, most of all: nothing without skin in the game
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
When the beard (or hair) is black, heed the reasoning, but ignore the conclusion. When the beard is gray, consider both reasoning and conclusion. When the beard is white, skip the reasoning, but mind the conclusion. So let me finish this book with a (long) maxim, via negativa style: No muscles without strength, friendship without trust, opinion without consequence, change without aesthetics,
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
close this chapter with a few summarizing lines. One may be risk loving yet completely averse to ruin. The central asymmetry of life is: A In a strategy that entails ruin, benefits never offset risks of ruin. Further: Ruin and other changes in condition are different animals. Every single risk you take adds up to reduce your life expectancy. Finally: Rationality is avoidance of systemic ruin.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
Never compare a multiplicative, systemic, and fat-tailed risk to a non-multiplicative, idiosyncratic, and thin-tailed one.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
Rationality does not depend on explicit verbalistic explanatory factors; it is only what aids survival, what avoids ruin. Why? Clearly as we saw in the Lindy discussion: Not everything that happens happens for a reason, but everything that survives survives for a reason.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
There is a difference between beliefs that are decorative and different sorts of beliefs, those that map to action. There is no difference between them in words, except that the true difference reveals itself in risk taking, having something at stake, something one could lose in case one is wrong. And the lesson, by rephrasing the principle: How much you truly “believe” in something can be manifested only through what you are willing to risk for it.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
my lifetime motto is that mathematicians think in (well, precisely | defined and mapped) objects and relations, jurists and legal thinkers in constructs, logicians in maximally abstract operators, and ... fools in words.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
The problem is that we humans are prone to the availability heuristic, by which the salient is mistaken for the statistical, and the conspicuous and emotional effect of an event makes us think it is occurring more regularly than in reality.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
VIRTUE IS ABOUT OTHERS AND THE COLLECTIVE From the scaling property, we can safely establish that virtue is doing something for the collective, particularly when such an action conflicts with your narrowly defined interests. Virtue isn't in just being nice to people others are prone to care about.) So true virtue lies mostly in also being nice to those who are neglected by others, the less obvious cases, those people the grand charity business tends to miss. Or people who have no friends and would like someone once in while to just call them for a chat or a cup of fresh roasted Italian-style coffee. TUNPOPULAR VIRTUE Further, the highest form of virtue is unpopular. This does not mean that virtue is inherently unpopular, or correlates with unpopularity, only that unpopular acts signal some risk taking and genuine behavior
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
Compare this to a healthy system, say, that of restaurants. As we saw in Chapter 8, restaurant owners worry about the opinion of their customers, not those of other restaurant owners, which keeps them in check and prevents the business from straying collectively away from its interests. Further, skin in the game creates diversity, not monoculture
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
The best enemy is the one you own by putting skin in his game and letting him know the exact rules that come with it. You keep him alive, with the knowledge that he owes his life to your benevolence. The notion that an enemy you own is better than a dead one was perfected by the order of the Assassins, so we will do some digging into the work of that secret society.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
If anything, being rich you need to hide your money if what I call friends. This may be known; what is less obvious is you may also need to hide your erudition and learning. social friends if they don't try to upstage or outsmart indeed, the classical art of conversation part of conversation is to avoid any imbalance, a la Baldassare Castiglione's Book of the Courtier: at least for the purpose of the conversation, otherwise it foil be hierarchy-free and equal in contribution. You'd rather h my with your friends than with your professor, unless of cou || fessor understands "the art” of conversation. Indeed, one can generalize and define a community as a which many rules of competition and hierarchy are lifted, where the lective prevails over one's interest. Of course there will be tension the outside, but that's another discussion. This idea of competit being lifted within a group or a tribe was, once again, present in the notion of a group as studied by Elinor Ostron people need to be equal, orwise it fails. It has to on You'd rather have dinner fessor, unless of course your pro within ion with NONLINEARITY OF PROGRESS gulur Now let us generalize to progress in general. Do you want society to get wealthy, or is there something else you prefer--avoidance of poverty Are your choices yours or those of salespeople?
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
Prosperous people of the type who don't look rich are certainly aware of the point-they live in comfortable quarters and instinctively know that a move will be a mental burden. Many still live in their original houses. = Very few people understand their own choices, and end up being manipulated by those who want to sell them something. In that sense, impoverishment might even be desirable. Looking at Saudi Arabia, which should progressively revert to the pre-oil level of poverty, I wonder if taking away some things from them—including the swarm of fawning foreigners coming to skin them—will make them better off. To put it another way: if wealth is giving you fewer options instead of more (and more varied) options, you're doing it wrong.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
when people get rich, they shed their skin-in-the-game-driven experiential mechanism. They lose control of their preferlences, substituting constructed preferences for their own, complicating their lives unnecessarily, triggering their own misery. And these conbtructed preferences are of course the preferences of those who want to kell them something. This is a skin-in-the-game problem, as the choices of the rich are dictated by others who have something to gain, and no side effects, from the sale. And given that they are rich, and their exploiters not often so, nobody would shout victim.
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Jordan Jackson@jordan﹒1y
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Skin in the Game
Skin in the Game
by Nassim Nicholas Taleb
The heuristic here would be to use education in reverse: hire, conditional on an equal set of skills, the person with the least Tabel-oriented education. It means that the person had to succeed in spite of the credentialization of his competitors and overcome more serious hurdles. In addition, people who didn't go to Harvard are easier to deal with in real life. You can tell if a discipline is BS if the degree depends severely on the prestige of the school granting it. I remember when I applied to MBA programs being told that anything outside the top ten or twenty would be a waste of time. On the other hand a degree in mathematics is much less dependent on the school (conditional on being above a certain level, so the heuristic would apply to the difference between top ten and top two thousand schools).
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Jordan Jackson@jordan﹒1y
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