Skin in the game

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Skin in the Game (book)

Skin in the Game: Hidden Asymmetries in Daily Life (acronymed: SITG) is a 2018 nonfiction book by Nassim Nicholas Taleb, a former options trader with a background in the mathematics of probability and statistics. Taleb's thesis is that skin in the game—i.e., having a shared risk when taking a major decision—is necessary for fairness, commercial efficiency, and risk management, as well as being necessary to understand the world. The book is part of Taleb's multi-volume philosophical essay on uncertainty, titled the Incerto, which also includes Fooled by Randomness (2001), The Black Swan (2007–2010), The Bed of Procrustes (2010–2016), and Antifragile (2012). The book is dedicated to "two men of courage": Ron Paul, "a Roman among Greeks"; and Ralph Nader, "Greco-Phoenician saint".

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• Skin in the Game (book) - Wikipedia

  Wikipedia The Free Encyclopedia ## Contents # Skin in the Game (book) Skin in the Game: Hidden Asymmetries in Daily Life | | | --- | | | | | Author | Nassim Nicholas Taleb | | Language | English | | Series | Incerto | | Subject | Philosophy | | Publisher | Random House | | Publication date | February 27, 2018 | | Publication place | United States | | Media type | Print, E-book, Audiobook | | Pages | 304 | | ISBN "ISBN (identifier)") | 978-0-425-28462-9 (Hardcover) | | Preceded by | Antifragile "Antifragile (book)") | Skin in the Game: Hidden Asymmetries in Daily Life (acronymed: SITG) is a 2018 nonfiction book by Nassim Nicholas Taleb, a former options "Options (finance)") trader with a background in the mathematics of probability and statistics. [...] Taleb's thesis is that skin in the game "Skin in the game (phrase)")—i.e., having a shared risk when taking a major decision—is necessary for fairness, commercial efficiency, and risk management, as well as being necessary to understand the world. The book is part of Taleb's multi-volume philosophical essay on uncertainty, titled the Incerto, which also includes Fooled by Randomness (2001), The Black Swan (2007–2010), The Bed of Procrustes (2010–2016), and Antifragile "Antifragile (book)") (2012). The book is dedicated to "two men of courage": Ron Paul, "a Roman among Greeks"; and Ralph Nader, "Greco-Phoenician saint". ## Asymmetry and missing incentives

• [PDF] Nassim Nicholas Taleb - SKIN IN THE GAME - PhiloSophia

  Skin in the Game is about four topics in one: a) uncertainty and the reliability of knowledge (both practical and scientific, assuming there is a difference), or in less polite words bullt detection, b) symmetry in human affairs, that is, fairness, justice, responsibility, and reciprocity, c) information sharing in transactions, and d) rationality in complex systems and in the real world. That these four cannot be disentangled is something that is obvious when one has … skin in the game. fn1 It is not just that skin in the game is necessary for fairness, commercial efficiency, and risk management: skin in the game is necessary to understand the world. [...] Skin in the game helps to solve the Black Swan problem and other matters of uncertainty at the level of both the individual and the collective: what has survived has revealed its robustness to Black Swan events and removing skin in the game disrupts such selection mechanisms. Without skin in the game, we fail to get the Intelligence of Time (a manifestation of the Lindy effect, which will get an entire chapter, and by which 1) time removes the fragile and keeps the robust, and 2) the life expectancy of the nonfragile lengthens with time). Ideas have, indirectly, skin in the game, and populations that harbor them do as well. [...] Causal Opacity and Preferences Revealed fn3 Let us now take the epistemological dimension of skin in the game to an even higher level. Skin in the game is about the real world, not appearances. As per Fat Tony’s motto: You do not want to win an argument. You want to win. Indeed you need to win whatever you are after: money, territory, the heart of a grammar specialist, or a (pink) convertible car. For focusing just on words puts one on a very dangerous slope, since We are much better at doing than understanding.

• Book Summary - Skin in the Game (Nassim Nicholas Taleb)

  Readingraphics # Book Summary – Skin in the Game: The Hidden Asymmetries in Daily Life This is the 5th book in Nassim Nicholas Taleb’s Incerto series which addresses how unpredictable the world is. This book focuses on ethics in an uncertain world, why it’s crucial to have “skin in the game” and how to address various asymmetries in life. In this free Skin in the Game summary, you’ll learn about asymmetries, agency problems, how to look beyond “fake” knowledge, and more. ## What is Skin in the Game? Skin in the game is basically the amount of risk or vested interest you have in an outcome. The more you have to lose, the more skin you have in the game. [...] Second, when we have skin in the game (i.e. something to gain or lose), we care about the outcome and become more motivated. We seek out new solutions, work harder and persist longer. Drug addicts are so ingenuous in finding ways to get more drugs precisely because they have skin in the game. Finally, we’re less likely to behave unethically if we think we’ll get caught. Taleb argues that skin in the game is more effective than regulations. Lawyers and businesses can always find ways to work around the rules. However, corporations may be more cautious about, say, polluting the environment if they know that the affected residents can band together to sue them. So, don’t rely on legal systems to maintain ethical behavior. Only turn to regulations if skin in the game cannot solve the issue. [...] ### Others’ Skin in the Game If you found out that your company is engaged in unethical activities, would you blow the whistle if it means losing your job and risking your reputation? Most people would lie low for the sake of their loved ones’ financial security and well-being. Hence, others’ skin in the game can affect your freedom. We have more skin in the game where it involves our immediate family, tribe or fraternity. It’s easier to add skin in the game in smaller communities. And, the more you have to lose, the more vulnerable you are. Taleb says that you can’t trust someone to make critical decisions if their survival depends on others’ subjective assessments.

• Skin in the Game by Nassim Nicholas Taleb: 9780425284643 | PenguinRandomHouse.com: Books

  The phrase “skin in the game” is one we have often heard but rarely stopped to truly dissect. It is the backbone of risk management, but it’s also an astonishingly rich worldview that, as Taleb shows in this book, applies to all aspects of our lives. As Taleb says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice, and the ultimate BS-buster,” and “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.” [...] As always both accessible and iconoclastic, Taleb challenges long-held beliefs about the values of those who spearhead military interventions, make financial investments, and propagate religious faiths. Among his insights: • For social justice, focus on symmetry and risk sharing. You cannot make profits and transfer the risks to others, as bankers and large corporations do. You cannot get rich without owning your own risk and paying for your own losses. Forcing skin in the game corrects this asymmetry better than thousands of laws and regulations. • Ethical rules aren’t universal. You’re part of a group larger than you, but it’s still smaller than humanity in general.

• What do I mean by Skin in the Game? My Own Version

  Press enter or click to view image in full size Image 4 My argument is that there is a more essential aspect: filtering and the facilitation of evolution. Skin in the game –as a filter –is the central pillar for the organic functioning of systems, whether humans or natural. Unless consequential decisions are taken by people who pay for the consequences, the world would vulnerable to total systemic collapse. And if you wonder why there is a current riot against a certain class of self-congratulatory “experts”, skin the game will provide a clear answer: the public has viscerally detected that some “educated” but cosmetic experts have no skin in the game and will never learn from their mistakes, whether individually or, more dangerously, collectively. [...] Have you wondered why, on high-speed highways there are surprisingly few rogue drivers who could, with a simple manoeuver, kill scores of people? Well, they would also kill themselves and most dangerous drivers are already dead (or with suspended license). Driving is done under the skin in the game constraint, which acts as a filter. It’s a risk management tool by society, ingrained in the ecology of risk sharing in both human and biological systems. The captain who goes down with the ship will no longer have a ship. Bad pilots end up in the bottom of the Atlantic Ocean; risk-blind traders become taxi drivers or surfing instructors (if they traded their own money). [...] What is _Skin in the Game_? The phrase is often mistaken for one-sided incentives: the promise of a bonus will make someone work harder for you. For the central attribute is symmetry: the balancing of incentives and disincentives, people should also penalized if something for which they are responsible goes wrong and hurts others: he or she who wants a share of the benefits needs to also share some of the risks. Press enter or click to view image in full size Image 4