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Finite and Infinite games. A short thread on Wirecard.
We're all taught that infinite games are a better model for business and for life. But the incentives engendered in the model aren’t always appropriate...
We're all taught that infinite games are a better model for business and for life. But the incentives engendered in the model aren’t always appropriate...
1. An accountancy firm wants to do a proper audit but also wants to retain client business.
2. A sell-side analyst wants to do a proper evaluation but also wants to maintain access to management.
3. A regulator wants to ferret out fraud but also wants to protect their reputation.
2. A sell-side analyst wants to do a proper evaluation but also wants to maintain access to management.
3. A regulator wants to ferret out fraud but also wants to protect their reputation.
In each case the infinite game undermines the task at hand.
One group of market participants who don’t play infinite games are short-sellers. Critics accuse them of only wanting to make a fast buck. But that’s precisely why it works.
One group of market participants who don’t play infinite games are short-sellers. Critics accuse them of only wanting to make a fast buck. But that’s precisely why it works.
