Table of Contents
Be careful of taking advice from people with misaligned incentives. If someone advises you to do something that is mutually beneficial, realize they may not care if you end up being harmed.
Traders understood this, they did not sell to other professional traders when they had excess inventory to unload – doing so would put the traders on high alert and cause the price to drop. In any transaction, no party should be certain of the outcome while the other one is uncertain.
Better Fences
The physicist Yaneer Bar-Yam showed that “better fences make better neighbors” – something governments fail to understand about the Middle East. It is unreasonable to put different religious groups together and expect them to get along. What “should” happen is not an empirical way of dealing with the world.
Blaming people for being “sectarian”—instead of making the best of such a natural tendency—is one of the stupidities of interventionistas. Separate tribes for administrative purposes (as the Ottomans did), or just put some markers somewhere, and they suddenly become friendly to one another. The Levant has suffered (and keeps suffering) from Western (usually Anglo-Saxon) Arabists enamored with their subject, with no skin in the game in the place, who somehow have a vicious mission to destroy local indigenous cultures and languages, and separate the Levant from its Mediterranean roots.*
Talking One’s Book
There are two ways of “talking one’s book.” The first is by buying a stock that you like and then commenting on it (disclosing ownership), and the other is buying a stock so you can advertise the qualities of the company and then sell it (a form of market manipulation).
Journalists with no skin in the game were expected to prevent market manipulation but because of the absence of skin in the game, these journalists tend to imitate the opinion of other journalists and create a mono-cultural ideology that often does not match the real world.
Doctor’s Skin
The legal system is likely to put the skin of doctors in the wrong game
Taleb’s argument is that we rely too much on metrics. Every metric can be gamed. If a doctor or hospital is judged by the five-year survival rate of patients and must make a choice of treatment for their patient, they may choose radiation therapy over precise surgery, because radiation is a better option for the short term. But this doctor or hospital does not consider the long-term effects of this choice (beyond the five years). The doctor thus transfers risk from their present to your future.
When you visit a doctor, you face a person who is in a fragile situation despite their authoritative demeanor. He is not you and is not your family member. Should your health degrade, he will not be emotionally affected. The most important thing for him is to avoid a lawsuit.