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pnrjulius comments on Just Lose Hope Already - Less Wrong
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Casey seems perfectly rational to me.
If you're in the hole 2.2.mil, what is the harm to you of doubling down? You'll have to declare bankruptcy twice as loudly?
This point was actually driven home to me over 20 years ago when I interviewed for trading position. If your company is way in the hole, it may as well take what assets it has and make a leveraged bet. Either it gets out of the hole, or it's twice as broke, which given limited liability, really isn't any more of a problem for the corporate officers.
Makes sense from the corporation's perspective. But also kinda sounds like moral hazard to me.
Of course. That was the point. If you can make more bets than you can cover, and suffer no liability when you can't, you've got yourself a license to steal. And clearly the trader knew it.