Skin in the Game

When someone has skin in the game, they have some stake in the outcome of their opinion or decision. They are incentivized to act in their own best interest, naturally aligning them with the best outcome. It mitigates effects like moral hazard, which misaligns incentives of the parties in an interaction based on an asymmetry of knowledge, power, and/or other factors.

The metaphor of skin in the game also relates to a number of core concepts in moral philosophy:

  • moral hazard
  • fairness
  • justice
  • transparency
  • authenticity
  • integrity
  • responsibility
  • good faith
  • honor
  • honesty
  • truthworthiness
  • forthrightness
  • earnestness
  • steadfastness
  • being true to one’s word

Skin in the game quotes

The price of greatness is responsibility.

Winston Churchill