Thank Ben! I agree. This is why I said âBecause salaries are much more stable than business valuesââif that antecedent doesnât hold, then the conclusion doesnât either.
Your post read: âThis is important so Iâm going to call it out in very clear terms: Entrepreneurship must involve an element of risk for the founder (i.e. luck). If it didnât, no one would invest.â You werenât very clear about the fact that this had âsalaries are much more [deterministic] than business valuesâ as a possibly-false antecedent.* (It needs to be a possibly false antecedent because thatâs exactly what youâre trying to prove in the rest of the essay. To assert it here would beg the question.)
Iâm not sure I understand. Itâs just empirically true that business values fluctuate a lot more than salaries, so while itâs a possibly false antecedent it just isnât false. Iâm not sure I understand how you think that should be indicated?
You said âsalaries are much more stable than business valuesâ above but for your conclusion to go through you need salaries not only to be more stable, but more ex-ante predictable. If business values fluctuate more than salaries, but the fluctuation is ex-ante predictable, then there is no element of luck in founding a startup (and to the extent the ex-ante variance is small, the role of luck is small).
On the other hand, the ex-ante variance being large is exactly what youâre trying to prove in the rest of the post, so it would be circular to assume it there and then use this to support your subsequent arguments in favor of it.
Huh, interesting point! I will have to reread my copy of The Economics of Entrepreneurship; I wonder if they addressed that or just said âadverse selectionâ and left it at that.
Thank Ben! I agree. This is why I said âBecause salaries are much more stable than business valuesââif that antecedent doesnât hold, then the conclusion doesnât either.
Your post read: âThis is important so Iâm going to call it out in very clear terms: Entrepreneurship must involve an element of risk for the founder (i.e. luck). If it didnât, no one would invest.â You werenât very clear about the fact that this had âsalaries are much more [deterministic] than business valuesâ as a possibly-false antecedent.* (It needs to be a possibly false antecedent because thatâs exactly what youâre trying to prove in the rest of the essay. To assert it here would beg the question.)
Iâm not sure I understand. Itâs just empirically true that business values fluctuate a lot more than salaries, so while itâs a possibly false antecedent it just isnât false. Iâm not sure I understand how you think that should be indicated?
You said âsalaries are much more stable than business valuesâ above but for your conclusion to go through you need salaries not only to be more stable, but more ex-ante predictable. If business values fluctuate more than salaries, but the fluctuation is ex-ante predictable, then there is no element of luck in founding a startup (and to the extent the ex-ante variance is small, the role of luck is small).
On the other hand, the ex-ante variance being large is exactly what youâre trying to prove in the rest of the post, so it would be circular to assume it there and then use this to support your subsequent arguments in favor of it.
Huh, interesting point! I will have to reread my copy of The Economics of Entrepreneurship; I wonder if they addressed that or just said âadverse selectionâ and left it at that.