An important thing that is too big to fail tends to get more too big to fail.

2024-05-20 · Bits and Bobs 5/20/24

It's a schelling point, a thing that everyone can agree is less risky than alternatives.

The bigger it gets, the more obviously it is too big to fail, making the preferential attachment effect stronger.

"Yeah, it's possible that [TBTF bank] goes down… but if they do, we're all screwed"

More on this topic

From other episodes

Coordination cost needs to be paid if there isn't a schelling point.2026-04-06
Your files aren't in Obsidian.2026-03-30
Schelling points have to be sharp.2026-03-09
Meaningful state tends to accumulate around schelling points in an ecosystem.2026-03-09
For a schelling point to stay coherent in an ecosystem, everyone has to agree it's reasonable relative to the value of the ecosystem.2026-03-02
Imagine a folksonomy for private tags.2026-01-26
Sometimes refactoring something into a schelling point creates unforeseeable value.2026-01-19
A platform that people find to be a bit better than alternatives and also has a fundamental bonus becomes a schelling point 2026-01-19