Byrne comments on The Importance of Saying "Oops" - Less Wrong

55 Post author: Eliezer_Yudkowsky 05 August 2007 03:17AM

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Comment author: Byrne 05 August 2007 04:13:33PM 3 points [-]

One fascinating thing about Enron is that they found a way to corrupt their own standards. They were huge fans of marking assets to market -- which could have averted both savings and loan crises, kept Executive Life from collapsing, averted the Japanese banking crisis, etc. On top of that, they loved incentive-based compensation.

This all fell apart when some Enron traders became the market: if you get paid based on prices, and you set prices, the rest of the Enron story is inevitable.