Sterling Terrell

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You are here: Home / Potpourri / Asymmetric Rules That Hinder

Asymmetric Rules That Hinder

Asymmetric Rules That Hinder

Asymmetric rules are not the rules you want for key people in an organization.

It becomes an agency problem.

Less of, “What is best for the organization (or everyone else).”

More of, “What is best for me.”

Understand: Asymmetric payoffs are great in trading and seeking success – but that’s not what we are talking about here – is it?

We’re trying to have a really big impact on the space industry. If the rules are such that you can’t make progress, then you have to fight the rules. “There is a fundamental problem with regulators. If a regulator agrees to change a rule and something bad happens, they could easily lose their career. Whereas if they change a rule and something good happens, they don’t even get a reward. So, it’s very asymmetric. It’s then very easy to understand why regulators resist changing the rules. It’s because there’s a big punishment on one side and no reward on the other. How would any rational person behave in such a scenario?”

-Ashley Vance, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Amazon)

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Filed Under: PotpourriTagged With: #Government, #Law

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