I thought of you last night. I had a friend, we had a friend over for dinner, and she was talking about how scary the roller coaster is at the santa cruz boardwalk. It's very rickety, and it's built, i think, in 19 24. And this example has nothing to do with the actual santa Cruz rolla coster. But when she pointed out that there hadn't been an accident,. maybe the whole life of the rollicoster, naturally thought of you. You see, sill yoso, you make money for nine years, exactly. So you make money nine years, and then the tenth year, everything's gone.
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.