Author Topic: Loss aversion discussion.  (Read 4813 times)

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Offline fuzzy

To the outside it may look like early adopters and insiders diluting a crypto-currency to pay themselves. (Crypto-equities are different but they're viewed more as currencies by the majority of the current market.)

I think people like Fuzzy and the work they put in arguably helped build BitShares just as much as the marketing director early on. The market right now though is very sceptical of dilution. So we need to show it that we're very intelligent & prudent with the new power. Threads like this probably pushed the share price down more than usual yesterday imo - https://bitsharestalk.org/index.php?topic=11458.0

With the new website, the marketing push coming and one/two new things in December, hopefully the market will start transitioning to the company vs. currency mentality more with regards to BitShares in the New Year.

Thanks for the kind words empirical.  It has been JoeyD, Jabbajabba, Gamey and myself though who have all worked together in our own little ways to fill the niches needing filled.  I will take some credit, though it is generally something I have to work at doing...but as always we depend on our network to get things done and make this ecosystem valuable.  I just hope people don't forget that the people who have been here during the hardest times are likely to be the ones who remain during the ups and downs likely to come in the future--this value is hard to quantify, but it is important people recognize it.  These people should be rewarded for such loyalty.  This doesn't mean, however, that we shouldn't be working to build each other up though...and pushing those people to evolve and use their passion to improve their own value proposition to the network. 


Well thank you.

Chuckles.... rereading my OP after a few days it seems a bit extreme but it was one of those nights :) .  I don't necessarily think 50% mistakes in hiring would be an overall positive thing.  It depends on the degree of the hiring mistakes and how quickly they are corrected. 

It should be the case that a person is removed fairly quickly after it is determined they're not doing what they said and not worth the cost.  If you go off that assumption, then voting too many delegates in is far less of a mistake than voting too few. 

It really has to be broken down into #s and expected value.  It is a gamble just like all decisions in life.  It is just that in our case people are overprotective of a loss they perceive.  This perception isn't really true.

I think you hit the nail on the head.  It WAS one of those nights...but growing pains suck in the moment, but expand capacity if the organism undergoing them is strong enough to make it through them. 
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Offline gamey

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Well thank you.

Chuckles.... rereading my OP after a few days it seems a bit extreme but it was one of those nights :) .  I don't necessarily think 50% mistakes in hiring would be an overall positive thing.  It depends on the degree of the hiring mistakes and how quickly they are corrected. 

It should be the case that a person is removed fairly quickly after it is determined they're not doing what they said and not worth the cost.  If you go off that assumption, then voting too many delegates in is far less of a mistake than voting too few. 

It really has to be broken down into #s and expected value.  It is a gamble just like all decisions in life.  It is just that in our case people are overprotective of a loss they perceive.  This perception isn't really true.
« Last Edit: November 20, 2014, 04:59:00 am by gamey »
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Offline lovejoy

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Ok so there is tendency of people to react in a manner that is related to http://en.wikipedia.org/wiki/Loss_aversion .. (whether you notice it empirically or read some sociology studies) .. This is a very well understood cognitive bias.

The problem here is that people are by nature horrible at determining what they are losing versus what they are gaining because of subconcious cognitive biases.  This comes into play when voting for a diluting delegate.

Background -
I was never against the dilution idea, but also not 100% for it.  One thing that is for certain is once we crossed that line we need to take full advantage of it.  At this point vote in anyone who has shown a positive volunteerism.  These people without  a doubt producing value.

Result
So please please consider your cognitive biases and try your best to weight out the pros and cons.  If we make 50% mistakes voting people in, but the other 50% are really solid members of the chain gang - then BTS wins immensely.


Peronally
Please try to understand the value equation and do not be scared of inflation at this point.  The people motivated to run at this point are all solid supporters of BTS.

Please comment.

 +5%  -- These are my thoughts exactly Gamey.  I've been having this dialogue running through my head for days and you articulated it.  Thank heavens.  I think we have a huge opportunity here, and we should not waste it.

Forces are coalescing to take this all to the next level.. I feel it. :)  The new bitshares.org site being up doesn't hurt the optimism any either.  :)  Mad props to Cass.

Offline gamey

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Along the lines of "smart decisions" lets throw in one of those daft things managers who were overpromoted say... we need to "get shit done".
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Offline gamey

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I feel that it is important that we get good value for our dilution, that is, that we only elect quality candidates who will provide positive value for bitshares, in the way that a startup company should only hire strong employees who will help the company succeed.

Right now, we arent electing enough paid delegates, because we havent elected any.  Toast hasnt even been elected yet.  I think this is a result of how difficult it is to vote, and how people with shares on exchanges cant vote for them.  We need to elect the delegates of the core dev team, at a bare minimum.   I would like to see more people elected who will work on development of various aspects of bitshares. 


But we dont want to go TOO far in the other direction, and just start handing out shares to anyone.  We have to look at it as if we were the management of a startup company.  Who is it worth hiring, given that our resources are limited?  We need to make smart decisions about this.

It is beyond obvious we need to make "smart decisions".  That is what this discussion is about.  The disagreement is on what is smart at what stages in the game.

Lets not even get into how almost all people are somewhat deluded in their assessment of their own ability to hire people.  Lets not get into how much a fully diluted delegate pays vs what we ask of them etc. It goes on and on.
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Offline Ander

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I feel that it is important that we get good value for our dilution, that is, that we only elect quality candidates who will provide positive value for bitshares, in the way that a startup company should only hire strong employees who will help the company succeed.

Right now, we arent electing enough paid delegates, because we havent elected any.  Toast hasnt even been elected yet.  I think this is a result of how difficult it is to vote, and how people with shares on exchanges cant vote for them.  We need to elect the delegates of the core dev team, at a bare minimum.   I would like to see more people elected who will work on development of various aspects of bitshares. 


But we dont want to go TOO far in the other direction, and just start handing out shares to anyone.  We have to look at it as if we were the management of a startup company.  Who is it worth hiring, given that our resources are limited?  We need to make smart decisions about this.

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Offline gamey

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To the outside it may look like early adopters and insiders diluting a crypto-currency to pay themselves. (Crypto-equities are different but they're viewed more as currencies by the majority of the current market.)

I think people like Fuzzy and the work they put in arguably helped build BitShares just as much as the marketing director early on. The market right now though is very sceptical of dilution. So we need to show it that we're very intelligent & prudent with the new power. Threads like this probably pushed the share price down more than usual yesterday imo - https://bitsharestalk.org/index.php?topic=11458.0

With the new website, the marketing push coming and one/two new things in December, hopefully the market will start transitioning to the company vs. currency mentality more with regards to BitShares in the New Year.

There are a lot of things to consider.  I sometimes wonder about a thread like this. In fact I have similar observations I would like to post but have refrained. I do think this has to be discussed and people need to be aware.  So how do you make people aware of something without the scare factor?


We've taken a hit on coinmarketcap over this and we're not in diluting yet.  Toast can't get his $2500 a month delegate voted in. It will get there eventually.  Who wants to risk the 1/2 a month salary over such a thing?

Very few like inflation.  I support the idea but grudgingly.  There is definitely a line of overuse vs under-utilized.  I think at the current market cap we really don't need to be concerned about overuse.  Although I suppose it is all done in percentages, so in the longrun the result is the same.

edit - I changed the thread title just because...  I wanted to grab people's attention because I really do believe this is a serious cognitive bias we have to fight but I think the thread has run its course.
« Last Edit: November 19, 2014, 08:11:30 pm by gamey »
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Offline bluebit

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A video explaining how to vote with the Bitshares wallet would be a great step. Put the video on the new website. I don't even know some of the delegates that I voted for.
« Last Edit: November 19, 2014, 03:38:14 pm by bluebit »
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Offline Empirical1.1

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To the outside it may look like early adopters and insiders diluting a crypto-currency to pay themselves. (Crypto-equities are different but they're viewed more as currencies by the majority of the current market.)

I think people like Fuzzy and the work they put in arguably helped build BitShares just as much as the marketing director early on. The market right now though is very sceptical of dilution. So we need to show it that we're very intelligent & prudent with the new power. Threads like this probably pushed the share price down more than usual yesterday imo - https://bitsharestalk.org/index.php?topic=11458.0

With the new website, the marketing push coming and one/two new things in December, hopefully the market will start transitioning to the company vs. currency mentality more with regards to BitShares in the New Year.

Offline fuzzy

Tony...all that thread said was that being a market maker was not enough to deserve running a delegate.  Perhaps making screencaptured videos (with subtitles) on how you trade would be enough to get people on board.

Dont let self-doubt get in the way of trying. 



Oooooh wait. What if you did the video in your PRIMARY language and add english subtitles?
« Last Edit: November 19, 2014, 02:14:30 pm by fuzzy »
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There is a sub-forum dedicated to this.  I know TonyK put his in General but there is a forum for this so postponing things until next month isn't really needed.  The inflation is here, now we need to start organizing it.  As it is, a fully diluting delegate just simply isn't worth worrying about at this point.

I am not saying that you vote random people in who show up.  That is part of the problem.  A good hustler will just tell you guys exactly what you want to hear, so in effect proposals aren't even that meaningful in keeping out bad actors.

It will be just as easy to remove someone .. Ok they get an extra $1000 USD.  Everyone would like a free $1000, but that is not a $1000 loss to you.  We lose much more by not hiring people than we do by hiring a few too many people.

In a normal corporation you have all sorts of inefficient people.  Our efficiency will still blow that out of the water. 

The only real thing we have to worry about is when our market cap grows, but by then we've started winning !!!

It makes no sense to sit there and twiddle our thumbs and shoot people down.  Maybe ask more of them but this "I only want developers" is not good.  Well who is going to evangelize?

We also need to not be hindered by the vocal minority.

I am not saying hire random  people, but people who were contributing before for free should be given leeway. 

For example Fuz declined taking higher paying job because he wouldn't be available on fridays!

I put my thread in the 'General' sub-forum, mainly because I intended it as a more general question - "Should I even consider running for delegate?" Excuse my bad English, but  it meant (in my mind) - "Should I even think about doing it?" which is totally different for any official announcement that 'I will do/try it'.

Anyways, it was total  success, as in, I received enough answers to my question, both by posters and people withholding their opinion to know the answer to that question for myself.

Drifting away with the previous comments of mine, I should go back to the main point of this discussion and say a word or two on topic...
I agree with you, but I do not have great hopes of changing the human nature. Maybe this thread will help 6 mo. or 21 mo. from now and I do  hope it does! But right now - I do not think so.


Offline gamey

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Ok so there is tendency of people to react in a manner that is related to http://en.wikipedia.org/wiki/Loss_aversion .. (whether you notice it empirically or read some sociology studies) .. This is a very well understood cognitive bias.

The problem here is that people are by nature horrible at determining what they are losing versus what they are gaining because of subconcious cognitive biases.  This comes into play when voting for a diluting delegate.

Background -
I was never against the dilution idea, but also not 100% for it.  One thing that is for certain is once we crossed that line we need to take full advantage of it.  At this point vote in anyone who has shown a positive volunteerism.  These people without  a doubt producing value.

Result
So please please consider your cognitive biases and try your best to weight out the pros and cons.  If we make 50% mistakes voting people in, but the other 50% are really solid members of the chain gang - then BTS wins immensely.


Peronally
Please try to understand the value equation and do not be scared of inflation at this point.  The people motivated to run at this point are all solid supporters of BTS.

Please comment.
Let's have a Strategy Day, pick a day in the coming month, when as many delegates as possible should put up a proposal on a dedicated board for the community to provide feedback on, which could include supporting another idea or delegate. This might open our minds up and push the conversations along a bit.

There is a sub-forum dedicated to this.  I know TonyK put his in General but there is a forum for this so postponing things until next month isn't really needed.  The inflation is here, now we need to start organizing it.  As it is, a fully diluting delegate just simply isn't worth worrying about at this point.

I am not saying that you vote random people in who show up.  That is part of the problem.  A good hustler will just tell you guys exactly what you want to hear, so in effect proposals aren't even that meaningful in keeping out bad actors.

It will be just as easy to remove someone .. Ok they get an extra $1000 USD.  Everyone would like a free $1000, but that is not a $1000 loss to you.  We lose much more by not hiring people than we do by hiring a few too many people.

In a normal corporation you have all sorts of inefficient people.  Our efficiency will still blow that out of the water. 

The only real thing we have to worry about is when our market cap grows, but by then we've started winning !!!

It makes no sense to sit there and twiddle our thumbs and shoot people down.  Maybe ask more of them but this "I only want developers" is not good.  Well who is going to evangelize?

We also need to not be hindered by the vocal minority.

I am not saying hire random  people, but people who were contributing before for free should be given leeway. 

For example Fuz declined taking higher paying job because he wouldn't be available on fridays!

« Last Edit: November 18, 2014, 07:35:17 pm by gamey »
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Offline starspirit

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Ok so there is tendency of people to react in a manner that is related to http://en.wikipedia.org/wiki/Loss_aversion .. (whether you notice it empirically or read some sociology studies) .. This is a very well understood cognitive bias.

The problem here is that people are by nature horrible at determining what they are losing versus what they are gaining because of subconcious cognitive biases.  This comes into play when voting for a diluting delegate.

Background -
I was never against the dilution idea, but also not 100% for it.  One thing that is for certain is once we crossed that line we need to take full advantage of it.  At this point vote in anyone who has shown a positive volunteerism.  These people without  a doubt producing value.

Result
So please please consider your cognitive biases and try your best to weight out the pros and cons.  If we make 50% mistakes voting people in, but the other 50% are really solid members of the chain gang - then BTS wins immensely.


Peronally
Please try to understand the value equation and do not be scared of inflation at this point.  The people motivated to run at this point are all solid supporters of BTS.

Please comment.
Let's have a Strategy Day, pick a day in the coming month, when as many delegates as possible should put up a proposal on a dedicated board for the community to provide feedback on, which could include supporting another idea or delegate. This might open our minds up and push the conversations along a bit.

Offline CLains

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Hmm, I need to think some more about this.

Offline gamey

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We should require of High Octane Delegates that they have a proper, detailed proposal that includes what they will do and how they will do it.  If we don't have people spending at least a few solid days on crafting their plan we are doing a bad job of attracting good Delegates not a bad job of voting people in.

These 2 are very intertwined.  You won't attract good delegates if they find the odds of being voted in too high or have to wait that much longer.

Your statement is a good representative of the type of thinking to avoid at this time.  Do people really go and spend days on an interview?  You are too cognitively biased that someone is going to pull one over on you when the damage they can possibly do is soooo minor.

« Last Edit: November 18, 2014, 04:06:06 pm by gamey »
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