The Only Way to Reform Economics Is by Installing a Skinagain Mechanism

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Russ roberts: The only way you can reform economics is by installing some kind of er skinagain mechanism. We need to lower the defendants on people who don't have skin a game, or ignore them. You hav to build a system, because people can take over the prestige a lot of things. A low tothologis would work out bosth ways. That's exactly i so would keep it to keep it t keep their mistakes local on campus.

Nassim Taleb of NYU-Poly talks with EconTalk host Russ Roberts about his recent paper (with Constantine Sandis) on the morality and effectiveness of "skin in the game." When decision makers have skin in the game--when they share in the costs and benefits of their decisions that might affect others--they are more likely to make prudent decisions than in cases where decision-makers can impose costs on others. Taleb sees skin in the game as not just a useful policy concept but a moral imperative. The conversation closes with some observations on the power of expected value for evaluating predictions along with Taleb's thoughts on economists who rarely have skin in the game when they make forecasts or take policy positions.