The Answer Is Transaction Costs Second Place Is The First Loser: Strategy Over Speed
14 snips
Aug 12, 2025 Discover the thrilling world of Il Palio in Siena, where ancient rivalries and strategic corruption reign. Learn how lottery-based horse assignments level the playing field against wealthy neighborhoods. Explore the staggering sums jockeys can earn through bribes and the extraordinary influence of the starter horse. Delve into the social stigma of finishing second, a fate worse than last place, echoing through generations. Finally, uncover the economic dynamics of seller clustering that enhance buyer interaction in various markets.
AI Snips
Chapters
Books
Transcript
Episode notes
Centuries-Old Street Race In Siena
- Il Palio runs twice a year in Siena on July 2 and August 16 and dates back to 1232.
- Mike Munger notes the race is dangerous for horses and intensely political for neighborhoods and jockeys.
Horse Assignment By Lot Drives Strategy
- Il Palio uses the Tratta lottery to assign horses to Contrade to reduce pre-race sabotage and unequal advantages.
- Mike Munger explains this design shifts the contest from raw speed to negotiated strategy and corruption.
Winning Trumps Speed; Strategy Wins Races
- With horses equalized by lottery, alliances and in-race tactics often decide winners instead of raw speed.
- Mike Munger points out that multiple allies can block faster horses and shape outcomes in the tight piazza.
