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It's interesting that the centipede game experiment uses a high rate of appreciation - doubling the payoff every round. On the one hand, this offers strong inc
by Imnimo 4y ago
It's interesting that the centipede game experiment uses a high rate of appreciation - doubling the payoff every round. On the one hand, this offers strong incentive to defect if you strongly believe the next player will defect - you double your reward (this is the strategy game theory predicts). But if you are less confident, it doesn't take much cooperation before you profit significantly. If only the next two players also cooperate, you will have done better than if you had defected.
It seems like rapid expected appreciation, combined with only a small amount of confidence that the other players will not defect (e.g. because you know they share your ideological preference for Bitcoin to succeed) is enough to stave off defection.
I'd be curious to see what the human-player dynamics look like if the expected future price does not increase so sharply, or is even flat or expected to decline.
- danuker 4y agoThe last halvening, the price increased less than what a lot of people expected (didn't reach $100k or $250k as per the Stock-To-Flow model). And the peak was much smoother.
- cinntaile 4y agoDid anyone really believe that the Stock-to-Flow model would be a correct predictor of price? That seems awfully naive, it's just some pseudoscientific nonsense.
- danuker 4y agoIf you used the raw model, without any smoothing, it still predicted the $50k price correctly. I think the smoothing gave too much weight to S2F and not enough to plain time. But I am really curious what will happen after 2024. That is when S2F really diverges from a plain time power-law. https://danuker.go.ro/bitcoin-price-predictions.html https://danuker.go.ro/bitcoin-price-predictions.html