[metamemetics]

> What if exploring the boundaries of your capability, your talents, was its own reward?

Then you're gaining something (discovery of new assets, freedom, happiness, sense of accomplishment, self-actualization, etc.) and seeking to maximize gains. Risk does not magically become utility. If gains are held constant, nearly everyone chooses the one with less risk because it has a higher expected value. Entrepreneurs are gain maximizers. Risk is only _ utility _ in the case of masochism.

[barrkel]

I think you're missing my point. There are first order effects and second order effects. Animals (including people) don't usually understand second order effects very well; so we have evolved mechanisms to encourage us towards desirable second-order effects, even when the first order effects may be negative.

I'm pointing to the rewards of manageable risk as a mechanism - probably an evolutionary mechanism - for exploring boundaries and thereby gaining things, even if you didn't know they existed.

It's all very well to talk about the rewards of new assets, freedom etc., but the reward from a risky venture isn't necessarily obvious; it may even be utterly unknown in the history of human kind. But if the risk itself being rewarding is a mechanism, it may encourage the discovery of such rewards.

The key misunderstanding problem here is the overloading of language. We have this talk of rationality, of evolutionary psychology, of emotions and drives. The key thing to understand, though, is that all may simply be different ways talking about the same things.

I'm saying that both things can be true: that it's rational consideration of long-term goals that cause us to risk things; and that it's the intrinsic utility of risk itself as encoded in the genome and proteome for the self-directed organisms we call humans. What I think is wrong is to take only a single terminology, and use it to say the other terminology is mistaken.

[metamemetics]

>What I think is wrong is to take only a single terminology

Utility is a basic textbook economics term and the context of Arrington's article. Also, Arrington was an economics major. I think sticking to one terminology is highly preferable over acontextual obscurism.

[barrkel]

Well, even staying within the bounds of economics, there are problems: are you talking about homo economicus, or behavioural economics? The latter brings in portions of the other systems into the economic model in order to better reflect the workings of the real world organism.

Economics is about the study of choice; but we can split that up into at least two broad categories, the most efficient choices, and the actual choices made by people. You can stay strictly within a so-called rational model for the first - and you must, in order to justify the inputs to your utility function - but the second is experimental, and relies on observed inputs necessarily defined by disciplines other than economics.

The insight of behavioural economics is that it's not so much rational maximization of gains that drives us, but rather imperfect mechanisms implemented in the organism, whose outcomes have been tuned by evolution to approach rational maximization. Leaving out the behavioural aspect means your model won't correspond as well with the real world, the only thing worth talking about. And I'm asserting that seeking a certain amount of risk is just one of those mechanisms.

[metamemetics]

If you want to go to Kahneman & Tversky, yes different heuristics people may use for estimating risk and reward are probably biased estimators (although I hope all pirate-entrepreneurs are using a little math and obtaining feedback ). That certainly does not mean risk, independent of gains, becomes intrinsic utility for the non-masochistic.

[barrkel]

I think you're too wedded to one way of viewing things to open your mind, so it's pointless to continue the conversation.

[metamemetics]

I studied cognitive psychology not economics ;) I'm familiar with the topics your bringing up and agree they're interesting but also think they are irrelevant to the issue of correlation vs causation and the red herring of "risk" when looking at what motivates entrepreneurs.