Tag: organizational dysfunction

some reality about really big "rational actors"

In efficient markets the mistakes of individual participants are corrected by the aggregate performance of the market as a whole. But when companies become so large that their mistakes spill out into the pubic arena, requiring some kind of public intervention to repair or salvage the situation, the pubic has an interest in reducing the likelihood of these mistakes and decisions on risk management cannot be left to the companies themselves. So when it comes to regulation, size really does matter in important ways.