Interestingly, i think the current coordination around the GameStop short squeeze can be explained with this framework.
If WallStreetBets tried to do this coordination with the goal of making money, they would probably fail. but this is not the stated goal. for many, the goal is one of entertainment, sticking it to the man, or other goals that are unrelated to making money. many even say they don’t care if they lose money on this because it’s not the point.
So in a way, they’re pretending to value the stock, and they’re coordinating to pretend.
I think the benefits in this case from having a non-monetary goal is that it changes the incentive structure. if the goal was to make money, then there would be much more incentive to defect and not everyone would be able to win. if the point is to bankrupt those who shorted these companies (or some other non-monetary goal), then everyone can “win” (even if they lose money) and it’s easier to coordinate.
I don’t know if it goes all the way to level 3, but i still find this an interesting connection.
I think the WSB situation is fascinating and I hope that someone does a postmortem once the dust has settled. I think it contains a lot of important lessons with respect to coordination problems. See also Eliezer’s Medium post.
Interestingly, i think the current coordination around the GameStop short squeeze can be explained with this framework.
If WallStreetBets tried to do this coordination with the goal of making money, they would probably fail. but this is not the stated goal. for many, the goal is one of entertainment, sticking it to the man, or other goals that are unrelated to making money. many even say they don’t care if they lose money on this because it’s not the point.
So in a way, they’re pretending to value the stock, and they’re coordinating to pretend.
I think the benefits in this case from having a non-monetary goal is that it changes the incentive structure. if the goal was to make money, then there would be much more incentive to defect and not everyone would be able to win. if the point is to bankrupt those who shorted these companies (or some other non-monetary goal), then everyone can “win” (even if they lose money) and it’s easier to coordinate.
I don’t know if it goes all the way to level 3, but i still find this an interesting connection.
This is a great point.
I think the WSB situation is fascinating and I hope that someone does a postmortem once the dust has settled. I think it contains a lot of important lessons with respect to coordination problems. See also Eliezer’s Medium post.
Very good point! I think their slogan “we like the stock” is another example of this, one that is more blatant and self-aware.