Imagine you live in a room with an investment banker. Every day, $100 appears in the room and the investment banker decides how much you get to keep. Every year, you get to decide whether or not to push a button that sprays rancid feces on both of you.
On Day 1, the banker lets you keep $30. He keeps this $30 for another 10 years. Then, he starts cutting your share by 2 pennies per week ($1 per year). It’s annoying but not too bad, but you don’t want to be covered in feces so you don’t push the button.
A decade later, you’ve only got $20. A decade after that, $10. Five years later, only $5 out of every $100.
At some point, it becomes strategic to push the button. Sure, your life sucks and having your tattered clothes covered in feces doesn’t help. But the banker in the bespoke suit is harmed more, and might rethink his allocation tomorrow.
And when you do push that button, the stinkier the feces, the better.
On Day 1, the banker lets you keep $30. He keeps this $30 for another 10 years. Then, he starts cutting your share by 2 pennies per week ($1 per year). It’s annoying but not too bad, but you don’t want to be covered in feces so you don’t push the button.
A decade later, you’ve only got $20. A decade after that, $10. Five years later, only $5 out of every $100.
At some point, it becomes strategic to push the button. Sure, your life sucks and having your tattered clothes covered in feces doesn’t help. But the banker in the bespoke suit is harmed more, and might rethink his allocation tomorrow.
And when you do push that button, the stinkier the feces, the better.