Do you see this as a linear relationship or a curve where the max rewards peak at some point, after which they yield diminishing results?
The fact that reward is proportionate to risk works in both directions. Everyone knows that if you offer great rewards, people will take great risks. But few see the whole pattern. Few realize that if you cap rewards, people stop taking risks.
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That’s the question that popped into my mind too. I’d think it would be more logarithmic than linear. If you believe that to be true, then the question becomes at what point does capping rewards begin to have a negligible impact on risk taking?
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a.k.a socialism.
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Isn't it also true that often the rewards and risks are unclear? So, reward is proportionate to *perceived* risk?
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I would think that most often, the risks are clearer than the rewards
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I'd refine it to "reward is proportionate to risk-taking" . the current phrasing suggests(atleast to me) about risk from external factors.(like climate change risk)
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it’s not really risk if there are rewards
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Rewards are in the upside generally, and there is only some chance to attain them. If we limit the rewards, which were already speculative to begin with, that’s a double whammy that often kills any willingness to take risk
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This is a very important point for price controls on drugs. Right now, uncapped rewards in the US are the main thing fueling further research. If we cap in US like everyone else, rewards drop dramatically. Pls remember that next time someone says single payer works everywhere
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In many cases, the US government spending is the main thing fueling further research. in an increasingly connected world, US won’t continue to pay $2000 for drugs that sell for $8 in Australia when the drug Dev and trial was paid for by US gov.
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