Tesla Faces Accelerating Rate of Model 3 Refunds
I have a new personal hypothesis on Elon and his companies.<p>Elon&#x27;s companies are not necessarily better run than other companies, and in some cases are worse run. Their success and Elon&#x27;s cult status as an innovator is a result not of above-average managerial competence but of a willingness to unilaterally defy the Nash equilibria of industries.<p>Automobiles, space flight, and energy are industries that have been stagnant for some time. Stagnation of an industry means that it&#x27;s found some kind of Nash equilibrium where it&#x27;s not really in anyone&#x27;s short term best interest to innovate much or otherwise deviate from the norm.<p>Elon doesn&#x27;t give a rat&#x27;s you-know-what and innovates <i>anyway</i>. Game theoretically he <i>defects</i>. This results in companies that are loss-making in the short term, but if successful they will define a new Nash equilibrium where they are positioned to lead or at least to have carved out a significant chunk.<p>Another way of putting this is that Elon is willing to try to cross fitness valleys between local maxima.<p>It&#x27;s a gamble of course: can you reach the next fitness peak &#x2F; equilibrium point before you run out of cash? This is very hard, and is why Nash equilibria &#x2F; fitness local maxima are so stubborn.