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Thread Statistics | Show CCP posts - 1 post(s) |
Eefrit
Eve Financial Services
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Posted - 2007.07.04 15:16:00 -
[1]
Originally by: Ray McCormack
Originally by: Ramblin Man The basic problem in EVE imo, particularly from a financial perspective, is that there's no rule of law.
There are no judges. There are no laws for those judges to interpret. Everything inside the EULA is binary - either it's forbidden by game mechanics, or it's completely allowed by the same. Can you imagine what RL would be like if that was the basis for our justice system?
Aye, but there are ways in which to spread that risk. Instead of having a corporation setup with a CEO being able to scam everything, spread the risk across several individuals or organisations. Slightly more bothersome to manage, but worth it to ensure investor security.
I have to disagree here to a large extent. Overall you have exactly the same (and arguably more) risk by spreading it like that, as you risk lots of smaller amounts but the risk of loosing any one amount is proportionally higher.
What you are limiting is the risk of total collapse by ofsetting it against a higher risk of partial loss. This is not a bad idea but it is not the same as a reduction in risk considering we are talking about a trust risk as opposed to a market risk.
The other thing you have to look at is that each individual investor does not care what happens to other peoples shares if he looses all of his.
/Eefrit
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Eefrit
Eve Financial Services
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Posted - 2007.07.04 17:17:00 -
[2]
Originally by: Ray McCormack Partial loss is a much more attractive prospect than total loss.
That would be true if it was partial loss on a per investor basis. i.e. if investor each investor had their assets spread such that a scam by 1 out of say 10 people would result in only a 10% loss. However the way I see it being discusses here it would be 10% of investors loose everything while 90% loose nothing - which is back to the total risk situation.
I don't disagree that ofsetting a large potential loss with low probability against a lower potential loss with higher probability is a bad thing at all - essentially what insurance is - is a bad thing. I am arguing that it does not reduce overall risk but merely exchanges one type of risk for another.
/Eefrit
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Eefrit
Eve Financial Services
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Posted - 2007.07.04 18:46:00 -
[3]
Originally by: Ray McCormack In a situation such as this, as with the current exchanges, it provides you (the investor) a choice of where you place your trust. So if you misplace that trust you loose everything, however the organisation as a whole is able to continue.
Yes, I agree totally with that. It reduces risk to the entity but not to the investors besides being able to select who you trust.
/Eefrit
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