The Isetical Rule Is an Anti Pasal

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The most misunderstood thing in society is a lawf large numbers. You take, you know, observationanything, figure out the mean just from observing what's going on. In reality, it's not that way. The mean doesn't reveal itself very easily. So people put themselves in a situation where er frequency of profit is very high. If i don't have skill in again, my uptimo strategy is to, er, shoot for small, steady gains and a rare los this is, this is picking up nickels in front of the bulldozer.

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.