Skin in the Game: The Hidden Asymmetries in Daily Life

Do not mistake skin in the game as defined here and used in this book for just an incentive problem, just having a share of the benefits (as it is commonly understood in finance). No. It is about symmetry, more like having a share of the harm, paying a penalty if something goes wrong. The very same idea ties together notions of incentives, used car

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 bull** t detection, b) symmetry in human affairs, that is, fairness, justice, responsibility, and reciprocity, c) information sharing in transactions, and d) rationali

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.

But, to this author, skin in the game is mostly about justice, honor, and sacrifice, things that are existential for humans.

Accordingly, the book is organized in the following manner. It doesn’t take more than about sixty pages for the reader to get the importance, prevalence, and ubiquity of skin in the game (that is, symmetry) in most of its aspects. But never engage in detailed overexplanations of why something important is important: one debases a principle by endle

Skin in the Game by Nassim Taleb