4 ms·

This comment said the same thing as the 4-paragraph comment about corporate finance. Yet somehow so much easier to understand.

• BoiledCabbage 7y ago
  The difference is cost of failure. If you lose a game you play another, so tolerance for risk taking is high. If Google or APPL screws in an economic downturn up they go bankrupt and don't get a second chance. Cost of failure is a huge decider of optimal behavior.
  • AlanSE 7y ago
    Very interesting way to look at the topic. However, if I adopt that perspective, I come to the opposite conclusion. Corporations are limited liability. It is expected that shareholders have distributed ownership in many companies. For Starcraft rankings, the possibilities are -1 or +1. For investing, it's more like -1 to infinity. It's a distribution within those bounds. Increasing the likelihood of hitting that -1 roll of the dice is completely acceptable if it is counter-balanced by a greater average benefit at the long end of the tail. Starcraft is different. Because there are only 2 outcomes (excepting draws), an increase in the chance of the -1 outcome necessarily comes with a decrease in the change of the +1 outcome. It would be more like a public company if they gave ranking bonuses for overkill of the opponent.