Survival Arts

Quote of the Day

Voicing an opinion is costless - anyone can argue that socialism is great, or that the government won’t really inflate a fiat currency. Having a false opinion may be costless if it doesn’t affect your life much, and it can produce a benefit of feeling good. So people may choose an opinion based on how it appeals to their hopes, rather on on what they believe is true.

An example of a more incentive compatible system is gambling. While people often gamble irrationally, gambling still tends to draw out more beliefs and less hope than mere discussion. By placing a wager, you tie your opinion to a personal gain or loss, so you care whether you are correct. Hence “Wanna bet?” really means “Do you actually think that, or are you just saying it?", and its a great way to call the windbag’s bluff. People offer absurd opinions much more often than they make idiotic wagers.

Patri Friedman