The best way to encourage more risk-taking is to make it less risky. (Incoherent? Yes. But not any more wrong than the notion that innovation-based entrepreneurship depends essentially on "risk taking") What it depends on is people with good ideas being able to execute on them.
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Replying to @Evolving_Ego
reworded for more obvious coherence: "the best way to encourage more risky attempts at high reward challenges is to make the consequences of failure less severe"
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Replying to @danlistensto
You've maintained the incoherence (which I consider a plus, because it highlights the flaw in conventional thinking). If you've reduced the consequences of failure, you've made it less risky.
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Replying to @Evolving_Ego @danlistensto
There might be a distinction between market risk and personal risk in the neighborhood that could resolve the incoherence.
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Replying to @Evolving_Ego
helpful to split risk in a few different conceptual categories. personal vs. market is a useful split. so is distinguishing between opportunity cost and sunk capital cost.
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I've read it a few places (probably Tyler Cowen blog among others) and I tend to agree that one of the structural elements that has made the U.S. a very wealthy place is good bankruptcy laws. They're less punitive than most countries.
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