I don't know the consequences of posting in a 5-day old thread, but I just felt like practicing my side interest in econ. My only experience with game theory w

I don't know the consequences of posting in a 5-day old thread, but I just felt like practicing my side interest in econ. My only experience with game theory was a half-term graduate course and I don't follow everything you're saying, but my gut feeling is that these definitions aren't important to the spirit of the article. Suppose you're buying stocks; you choose a portfolio of stocks to maximize your return. Of course you'll make mistakes and pick bad stocks, but as long as you have enough good stocks in your portfolio, you'll still turn a profit (and companies won't come and argue "why didn't you buy my stock?"). The difference between YC and the stock market is that being chosen by YC can potentially increase your value; they are more like the coaches that train athletes. So whatever portfolio they pick will actually end up with a higher value than if it were just left alone. Also, it makes sense to evaluate people by things not so one-dimensional as "ability" (which by gyro_robo's argument we should maximize), otherwise we ignore other possible synergies between coach and trainee, such as similar personalities, that can cause the trainee to train more productively, independent of ability. The problem with the stock market analogy is that all you need to do is to beat the market, and to do that you just need to perform better than average. Actually YC could do that if all they wanted was to make some money. Perhaps similarly, a sports coach could be lax about picking athletes if the second-best team was way behind. This is where I see the game theory coming in. If there was another team, similar to YC, that was similar in performance, then YC would have more of an incentive to minimize the measurement error. I'm not saying they don't already, I'm just saying it would make sense to do so. Anyway, I don't know if this makes any sense but the essay is fun and probably a good piece to show to some younger people.