To have "skin in the game" is to have incurred risk (monetary or otherwise) by being involved in achieving a goal.
In the phrase, "skin" refers to an investment (literal or figurative), and "game" is the metaphor for actions on the field of play under discussion.[1] The aphorism is particularly common in business, finance, and gambling, and is also used in politics.[1]
The origin of the phrase is uncertain but may have originated from golf skins games played at IBM in the 1980s.[2]
It has commonly been attributed to Warren Buffett, referring to his own investment in his initial fund.[3] However, William Safire disputes that Buffett is the source of the phrase, pointing to earlier instances.[4]
In business and financeedit
The term is used to ask or convey an owner(s) or principals undefined but significant equity stake in an investment vehicle where outside investors are solicited to invest.[non sequitur] The theory is that principal's equity contribution is directly related to the stability of the investment and confidence that management has in the venture and is also (falsely) strongly correlated to the expected yield of the investment.
According to the economist Joseph Stiglitz, there exists a correlation between excessive "skin" and lower returns.[5]
The main issues surrounding "skin" or excess "skin" is the principal–agent problem whereby transparency and fiduciary obligations are disregarded by principals who have capital or excess capital (skin) tied into an entity. Many banks and other financial institutions bar employees from having any "skin" where client capital is managed, principally to address the issue of front running and commingled funds (MF Global).[6] Investment structures such as hedge funds, private equity, Trusts and mutual funds are legally limited to a minority investment positions or are done to create a tax efficient structure. Typically equity inputs by these fiduciaries are around 0.5–2%.
The dictionary definition of skin in the game at Wiktionary
December 15, 2023
skin, game, phrase, this, article, needs, additional, citations, verification, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, skin, game, phrase, news, newspapers, books, sch. This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Skin in the game phrase news newspapers books scholar JSTOR February 2013 Learn how and when to remove this template message To have skin in the game is to have incurred risk monetary or otherwise by being involved in achieving a goal In the phrase skin refers to an investment literal or figurative and game is the metaphor for actions on the field of play under discussion 1 The aphorism is particularly common in business finance and gambling and is also used in politics 1 Contents 1 Etymology 2 In business and finance 3 See also 4 References 5 Further reading 6 External linksEtymology editThe origin of the phrase is uncertain but may have originated from golf skins games played at IBM in the 1980s 2 It has commonly been attributed to Warren Buffett referring to his own investment in his initial fund 3 However William Safire disputes that Buffett is the source of the phrase pointing to earlier instances 4 In business and finance editThe term is used to ask or convey an owner s or principals undefined but significant equity stake in an investment vehicle where outside investors are solicited to invest non sequitur The theory is that principal s equity contribution is directly related to the stability of the investment and confidence that management has in the venture and is also falsely strongly correlated to the expected yield of the investment According to the economist Joseph Stiglitz there exists a correlation between excessive skin and lower returns 5 The main issues surrounding skin or excess skin is the principal agent problem whereby transparency and fiduciary obligations are disregarded by principals who have capital or excess capital skin tied into an entity Many banks and other financial institutions bar employees from having any skin where client capital is managed principally to address the issue of front running and commingled funds MF Global 6 Investment structures such as hedge funds private equity Trusts and mutual funds are legally limited to a minority investment positions or are done to create a tax efficient structure Typically equity inputs by these fiduciaries are around 0 5 2 See also editEating your own dog food Skin in the Game book References edit a b Corey Michael June 2 2011 Skin in the Game DeliberatelyConsidered com Retrieved 2013 03 10 Origin of skin in the game StackExchange Retrieved 2 November 2021 Investopedia Skin In The Game Definition Safire William 2006 09 17 Skin in the Game The New York Times Stiglitz Joseph E 1987 Principal and agent The New Palgrave A Dictionary of Economics v 3 pp 966 71 MF Global The mess that keeps getting messier The Term Sheet Fortune s deals blog fortune cnn com November 21 2011 Archived from the original on July 13 2012 Retrieved 2013 03 10 Further reading editNassim Nicholas Taleb 2018 Skin in the Game Hidden Asymmetries in Daily Life New York Random House ISBN 978 0 425 28462 9 External links edit nbsp The dictionary definition of skin in the game at Wiktionary Retrieved from https en wikipedia org w index php title Skin in the game phrase amp oldid 1166307829, wikipedia, wiki, book, books, library,
