Comment by skmurphy | Hacker News Reader

Comment by skmurphy | Hacker News Reader

Upside decay is Lui's term for lower odds rare but useful events combining to create a "lucky break." The outer edge of their upside shrinks. He makes these key points:

1. Upside decay is hard to spot. It’s invisible if we’re not specifically looking for it, because the absence of rare positive events is unexceptional.

2. Upside decay is preceded by a lack of virtue that leads to zero-sum or even win-lose transactions

3. Two Leadership choices: virtuous or unvirtuous culture which leads to two disparate outcomes:

virtuous culture -> positive sum interactions -> weak ties help -> lucky breaks

unvirtuous culture -> zero sum interactions -> weak ties abandon -> upside decay

“The right culture, the highest and best culture, is a seamless web of deserved trust.” Charles Munger

Note: Clayton Christensen makes the same point for individuals who prioritize "winning" and "career advancement" over relationships in "How Will You Measure Your Life (https://hbr.org/2010/07/how-will-you-measure-your-life). Summary at https://www.skmurphy.com/blog/2020/02/16/clayton-christensen...

I agree with your assessment of the main points of this article.

However, when I read the post, it felt very disconnected. He presents his model of upside decay... and then, a GDP graph? Ok... let's see how this is relevant... Ummm... it's not really.

The problem is, I'm sympathetic to some of the drive underlying his points I think, they're just too diffuse and unconnected for me to appreciate in this article.

From top to bottom:

1. what evidence is there GDP growth is predicated upon a few large bursts of progress rather than steady iteration (I think this is likely, but it's asserted without evidence).

2. We've established that we're talking about upside decay, so why are we switching to comparing 0.5 ^ 5 vs. 0.3 ^ 5? (you can argue that he's integrating the side of the normal distribution above 0 for the non-upside-decay and upside-decay case, but why? it doesn't fit with the argument being made, why are we arguing that this model fits what we're trying to look at?).

3. So now we introduce "weak ties" and how they regulate upside-decay. Why? It's presented with no evidence or argument.

e.t.c.

I feel like my comment has come off negative, though I don't particularly want it to. I think there's some interesting stuff here, I just don't think it's particularly well grounded.

It appears he was taking notes on a talk he attended and published them.

Oh... that explains things. Apologies if I was negative!

Would love to see additional arguments from this talk. Does anyone know the primary source?

Not sure how much more info to give, but the talk was given in the University of Hong Kong a week prior this posting!

The article was from October of 2020 so it's more likely the article influenced a talk given last week than vice versa.

The article was from October 2020 so this looks more like someone being facetious.

my take:

1. It's an assertion. I think a punctuated equilibrium model is a reasonable argument looking at the last 250 years or so of technology progress but I agree he does not present data.

2. I understood this to mean that a breakthrough is a "combination lock" event that requires multiple positive events to align. If counter parties are more suspicious of you then the odds of a favorable interaction go from 50% to 30% so the odds crater.

3. Your reputation is bounded within a group context. Your weak ties are more likely to lead novel insights and (see for example Granovetter's "Strength of Weak Ties" https://sociology.stanford.edu/publications/strength-weak-ti...) by enabling unique combinations of multiple ideas.

I think your critique is accurate but from my perspective Lui's article represents some very innovative thinking that offer the core of several valuable insights.

The distinction of cultures into "virtuous" and "unvirtuous" is meaningless. China hasn't achieved a miracle by being "virtuous", they achieved it by working very hard and accepting outside investment. Their strategic and social policies have been not consistent, but they have been driven from a consistent culture (the internals of the Communist Party) for decades.

They not only can, but probably already have, gotten away with cultural genocide in Tibet. Nobody did anything about it. Ripping up the Sino-British declaration is a non-event in global politics.

This isn't a case of "well they were virtuous in 1990 and abandoned virtue in 2020". Ditto America or the Europeans. Virtue is that the winners of the big wars get to decide what crimes will be highlighted and what will be ignored - until they lose a war. Realpolitik is a more powerful and explanatory lens to explain all the manoeuvrings than whatever this 'virtuous culture' concept is meant to represent.

Anyone can put together a "virtuous" or "unvirtuous" list of 20 dot points for any country with more than 100 million people. 100 million is a lot of people. There is a lot going on.

I don’t think it’s supposed to be the culture of the country rather the culture of leadership and it’s relations to their peers. In the case of China it’s actions that people they depend on such as the leadership of the USA see as bad that increased friction which then compounds in the upside decay.

Thanks for sharing the article. He has a nice way of framing things:

> My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team.

I'd be very interested in actual data that compares virtuous and unvirtuous cultures, out of curiosity of course!

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