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I was skimming through the tweets about Taleb when I saw one from one of his former [friends][1] which was about Taleb's "skin of the game" saying that it is neither necessary nor sufficient for "good judgment".

I refute him thus. Skin-in-the-game is not a sufficient condition for good judgment (e.g., military blunders, with real skin at stake). Nor is it a necessary condition (Kahneman’s brilliant research done inside IYI club). Skin-in-the-game is a facilitative condition: it helps

I was wondering if having skin in the game may be harmful to judgement in certain circumstances where a person having skin in the game(or too much of it) may be more likely to form inaccurate ideas about something than looking at the same thing from a rather detached position, an ivory tower so to speak. [1]: https://twitter.com/PTetlock/status/953741253409165312

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    It can be harmful especially where impartiality is required. This is why they do not allow police officers to work on cases that involve their family members. But Taleb mostly has business decisions in mind, not that risk aversion, wishful thinking, etc., biases can not skew judgments there too.
    – Conifold
    Commented Nov 10, 2020 at 20:20
  • @Conifold Besides business decisions I think Taleb probably has academia in mind particularly economic researchers where he uses his "skin in the game" concept in his generic attacks on them.
    – GEP
    Commented Nov 10, 2020 at 20:29
  • I think the way this term is generally used, it's about a commitment not to rake the 'game' lightly. Consider how poker players like to play for money, the better the player usually the higher the stakes, to make the game serious, to put 'skin' in the game in terms of risking real consequences to decisions
    – CriglCragl
    Commented Nov 10, 2020 at 22:34
  • Taleb's 'skin in the game' principle helps explain the high level of rationality and level-headedness of those who gamble large amounts of money on sporting events, or indeed cryptocurrencies or distinctly pyramid-shaped 'network marketing' schemes.
    – Tom Morris
    Commented Nov 22, 2020 at 19:47

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As Tetlock says, having skin in the game is facilitative: more specifically, it adds a sense of salience and urgency. If someone has to decide whether to take a business trip, they will be more focused, attentive, and judicious with the question if they have to pay for the trip themselves than if the company pays for it. But like anything else, perspective is important; too much 'skin in the game' can warp perspective the other way.

People balance perceived costs against perceived values. Having no skin in the game can make perceived value artificially low, so that any cost is too much; having too much skin in the game can can make perceived values artificially high, so that no cost is too much.

The general moral solution to these kinds of problems is to break out of the Rational Actor Model entirely, and start taking into account the costs and values to other people. Tetlock gets that point; I'm not certain that Taleb does (at least from this tweet thread).

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Always meaningful would be closer to the point. There are three contingencies for any spiritual (non-material) questions, salience (which is akin to having skin in the game - the situation having expected and meaningful effects to you), perspective, and priority. Having skin the game aka being invested, means that since you care, you're more likely to follow and direct the situation. It's not beneficial as in being a solution but it's beneficial as in helping frame the situation so that finding a solution (bespoke action plan) is easier.

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