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I don’t understand how the iterated prisoner’s dilemma makes a difference. If you are a founder who withdrew all your company’s money, then your reputation is

I don’t understand how the iterated prisoner’s dilemma makes a difference. If you are a founder who withdrew all your company’s money, then your reputation is neutral or perhaps positive. You saved your company. You did “whatever it takes”. These are good qualities in a founder. If you are a founder who left your company’s money in SVB, nobody is going to give you a medal for that. Instead it exposes you to questions such as “Why did you have so much cash in one place?”. If depositors hadn’t gotten bailed out then you also face the collapse of your startup, your coworkers losing their jobs, etc. So this is definitely a much more negative outcome iterated or not.

davidw 4y ago
I wouldn't look so much at the founders as the folks higher up the food chain. I'm not sure they deserve quite so much vitriol as that website directs at them, but it really does seem to be a lose/lose situation for all the people who claimed to be fans of that bank. No one seems to be better off. And while it's not hard to explain this outcome as 'the rational thing', it's also easy to imagine a different outcome where some more courageous leaders got together and held things together.
xoa 4y ago
Replying to this as it's the top one right now, but also to siblings after: >I don’t understand how the iterated prisoner’s dilemma makes a difference. SVB isn't fungible, this isn't the case of "a bank is a bank", it was heavily used for a reason and that was it had developed specialized services, expertise, and culture around supporting startups. Losing it may mean that SV as a whole is permanently, or at least temporarily but significantly, impoverished. New startups may become harder to start and operate. This doesn't mean the end for existing businesses, certainly not already grown successful ones with stable income and sufficient size for in-house expertise, so in a singular game it's not a big deal. But to the extent VCs or founders care about the next game and the one after, the startups to come that don't yet exist even on napkins, they may now be worse off than if through cooperation SVB had been saved and reformed. You're missing the entire point of iteration, that it's not just about this one game. Startups fail for all sorts of reasons, what has made SV successful long term wasn't the success or failure of any single startup but that there was an overall environment where it was straight forward to have new ones try again and again. tobyjsullivan sibling wrote: >Any research recommending alternative strategies for iterated games is almost certainly looking at repeating games between a consistent pair of players. Historically though SV has indeed been relatively consistent players, from VCs to founders to employees to, well, services like SVB! Silicon Valley Bank was founded in 1983, not yesterday. What is that to Silicon Valley itself if not consistent? The iterated game here is all the startups after the current batch. Where do VCs and founders go to and deal with in Fall 2023? In March 2024? Will it be exactly and perfectly as good as SVB, or better? If so then sure, no problem. If not, they've sacrificed advantage in future iterations for the short term. RyanGWU82 wrote: >The Prisoners' Dilemma analogy was covered in Ben Thompson's Stratechery article this week Thank you! There it is, glad I can read it now. Much better than anything I wrote. And to add on for the future here is the HN discussion on it: https://news.ycombinator.com/item?id=35134608 https://news.ycombinator.com/item?id=35134608
eropple 4y ago
The VCs were also playing the game, though. How do you feel that iteration looks for them?

davidw 4y ago

I wouldn't look so much at the founders as the folks higher up the food chain. I'm not sure they deserve quite so much vitriol as that website directs at them, but it really does seem to be a lose/lose situation for all the people who claimed to be fans of that bank. No one seems to be better off. And while it's not hard to explain this outcome as 'the rational thing', it's also easy to imagine a different outcome where some more courageous leaders got together and held things together.

xoa 4y ago

Replying to this as it's the top one right now, but also to siblings after: >I don’t understand how the iterated prisoner’s dilemma makes a difference. SVB isn't fungible, this isn't the case of "a bank is a bank", it was heavily used for a reason and that was it had developed specialized services, expertise, and culture around supporting startups. Losing it may mean that SV as a whole is permanently, or at least temporarily but significantly, impoverished. New startups may become harder to start and operate. This doesn't mean the end for existing businesses, certainly not already grown successful ones with stable income and sufficient size for in-house expertise, so in a singular game it's not a big deal. But to the extent VCs or founders care about the next game and the one after, the startups to come that don't yet exist even on napkins, they may now be worse off than if through cooperation SVB had been saved and reformed. You're missing the entire point of iteration, that it's not just about this one game. Startups fail for all sorts of reasons, what has made SV successful long term wasn't the success or failure of any single startup but that there was an overall environment where it was straight forward to have new ones try again and again. tobyjsullivan sibling wrote: >Any research recommending alternative strategies for iterated games is almost certainly looking at repeating games between a consistent pair of players. Historically though SV has indeed been relatively consistent players, from VCs to founders to employees to, well, services like SVB! Silicon Valley Bank was founded in 1983, not yesterday. What is that to Silicon Valley itself if not consistent? The iterated game here is all the startups after the current batch. Where do VCs and founders go to and deal with in Fall 2023? In March 2024? Will it be exactly and perfectly as good as SVB, or better? If so then sure, no problem. If not, they've sacrificed advantage in future iterations for the short term. RyanGWU82 wrote: >The Prisoners' Dilemma analogy was covered in Ben Thompson's Stratechery article this week Thank you! There it is, glad I can read it now. Much better than anything I wrote. And to add on for the future here is the HN discussion on it: https://news.ycombinator.com/item?id=35134608 https://news.ycombinator.com/item?id=35134608

eropple 4y ago

The VCs were also playing the game, though. How do you feel that iteration looks for them?