Skin in the Game: The Hidden Asymmetries in Daily Life

These notes are old and were written while reading — they don’t necessarily reflect my current views.

Elenor Ostrom pointed out that the tragedy of the the commons does not apply in small communities. Small groups regulate the self’s to internalize externalities.

4:30:00 Piketty take down:

10% of Americans will spend a year in the top 1% and more than half of americans will spend a year in the top 10 percent. It’s important to model inequality as a Markov chain. Pikettys book rests on the assumption that r>g, which Talib rejects. Tailb explains this by suggesting that the dominant form of assets are intangible, which are rarely accounted accurately in the books. Therefore, we systematically overestimate the return on capital.

He criticizes the „irrationality“ of economic phenomenons like loss aversion by pointing out that this analysis implies wrongly that the person in the experiment will not take any further risks. One cigarette does not really increase your cancer probability, nevertheless not smoking the first cigarette might still be rational. I agree with him on that. He also has his problem with Thaler et. al. also for the irrationality argument.

He really hates Pinker lol.