3 ms·

Ok, I'll take a stab at it. Suppose you had a bunch of decisions that needed to be made, and you would rather that (on average) they were made by smart people

Ok, I'll take a stab at it. Suppose you had a bunch of decisions that needed to be made, and you would rather that (on average) they were made by smart people rather than dumb people. So you set up a system of tokens, where people with more tokens were allowed to make more of the decisions. Then all you need is a system whereby smart people wind up with more of the tokens than dumb people. So you set it up that, when a dumb person meets a smart person, the dumb person gives the smart person some of their tokens. But how are they supposed to know which is which? "Dunning Kruger" and all that seems to doom this plan from the start. But markets always find an answer; what we're seeing here is the efficient market resolving the question for us. How was that?

jxjnskkzxxhx 1y ago
Awful. All these arguments boil down to "a large number of people couldn't possibly make decisions these bad". Can and do. To be clear, Im not going to continue arguing this point. I find it as dull as trying to convince a fundamentalist that his arguments are circular. That was fun when I was 14 or so, but it's been a long time since.
- MarkusQ 1y ago
  To be clear, I was role playing an efficient market fundamentalist. Or trying to. And (trying to steelman the argument) was careful to not specify which group of people were making the bad decisions. It is obvious that at least one side of any pure monetization trade like this are making a bad decision (and it could be both; for some such games the only winning move is to refuse to play). So I certainly wasn't claiming that people couldn't make decisions this bad since (as you note) this is clearly counterfactual. My point is that we're seeing an intersection of "you can't cheat an honest man" and "there's a sucker born every minute," with a touch of "we cheart the other guy and pass the savings on to you"; _everyone_ involves thinks they are making a smart move, and in a case like this at least half of them must be wrong.
  - FreakLegion 1y ago
    Your stab was good. Importantly, an efficient market isn't necessarily a rational market. "This is nuts" describes an irrational market, which may or may not be inefficient.
disambiguation 1y ago
To engage with the devils advocate: The problem with the reasoning is, either we already know who's a smart decision maker, in which case the mechanism isn't efficient. or else we don't know, in which case the logic is circular - whoever gets the most tokens must be the best decision maker. in any case i think all smart decision makers have learned to stay away from crypto.
- MarkusQ 1y ago
  Yeah, I'd agree with you. I think everybody in that loop is going to learn an expensive lesson. But (and this is an important "but"): I could be wrong. In which case, I'll learn a lesson instead by watching them show me how it's done.

jxjnskkzxxhx 1y ago

Awful. All these arguments boil down to "a large number of people couldn't possibly make decisions these bad". Can and do. To be clear, Im not going to continue arguing this point. I find it as dull as trying to convince a fundamentalist that his arguments are circular. That was fun when I was 14 or so, but it's been a long time since.

MarkusQ 1y ago
To be clear, I was role playing an efficient market fundamentalist. Or trying to. And (trying to steelman the argument) was careful to not specify which group of people were making the bad decisions. It is obvious that at least one side of any pure monetization trade like this are making a bad decision (and it could be both; for some such games the only winning move is to refuse to play). So I certainly wasn't claiming that people couldn't make decisions this bad since (as you note) this is clearly counterfactual. My point is that we're seeing an intersection of "you can't cheat an honest man" and "there's a sucker born every minute," with a touch of "we cheart the other guy and pass the savings on to you"; _everyone_ involves thinks they are making a smart move, and in a case like this at least half of them must be wrong.
- FreakLegion 1y ago
  Your stab was good. Importantly, an efficient market isn't necessarily a rational market. "This is nuts" describes an irrational market, which may or may not be inefficient.

disambiguation 1y ago

To engage with the devils advocate: The problem with the reasoning is, either we already know who's a smart decision maker, in which case the mechanism isn't efficient. or else we don't know, in which case the logic is circular - whoever gets the most tokens must be the best decision maker. in any case i think all smart decision makers have learned to stay away from crypto.

MarkusQ 1y ago
Yeah, I'd agree with you. I think everybody in that loop is going to learn an expensive lesson. But (and this is an important "but"): I could be wrong. In which case, I'll learn a lesson instead by watching them show me how it's done.