Skin in the Game: Hidden Asymmetries in Daily Life

by Nassim Nicholas Taleb

A BRIEF TOUR OF YOUR GRANDPARENTS’ WISDOM Let us now close by sampling a few ideas that exist in both ancient lore and are sort of reconfirmed by modern psychology. These are sampled organically, meaning they are not the result of research but of what spontaneously comes to mind (remember this book is called Skin in the Game), then verified in the texts. Cognitive dissonance (a psychological theory by Leon Festinger about sour grapes, by which people, in order to avoid inconsistent beliefs, rationalize that, say, the grapes they can’t reach got to be sour). It is seen first in Aesop, of course, repackaged by La Fontaine. But its roots look even more ancient, with the Assyrian Ahiqar of Nineveh. Loss aversion (a psychological theory by which a loss is more painful than a gain is pleasant): in Livy’s Annals (XXX, 21) Men feel the good less intensely than the bad.fn6 Nearly all the letters of Seneca have some element of loss aversion. Negative advice (via negativa): We know the wrong better than what’s right; recall the superiority of the Silver over the Golden Rule. The good is not as good as the absence of bad,fn7 Ennius, repeated by Cicero. Skin in the game (literally): We start with the Yiddish proverb: You can’t chew with somebody else’s teeth. “Your fingernail can best scratch your itch,”fn8 picked up by Scaliger circa 1614 in Proverborum Arabicorum. Antifragility: There are tens of ancient sayings. Let us just mention Cicero. When our souls are mollified, a bee can sti...