Went to dinner with two VCs yesterday, one of whom had to leave early to sign a term sheet.
When the $390 bill came, the other VC said:
"Look, I could pay it, Alex, but I'd need to sell some of my bitcoin. I have tens of millions in unrealized gains on those positions so that would be a huge unnecessary loss. We essentially are facing a trilemma: whatever we do will be either unfair, inefficient, or make the restaurant unprofitable. One thing we could do though--remind me, what's your net worth? About $500?"
"$542," I replied.
"Yes, so we could let you pay the whole bill. This would minimize liquidations and satisfy the restaurant's budget constraint. This is what convex optimization gives you, sort of a water-filling algorithm. As close as you can get to Arrow's impossibility theorem!"
I hadn't drunk anything but was beginning to feel tipsy. The sense of participating in Economic Optimization and belonging, if momentarily, to the Mechanism Designer Community filled my soul. I don't remember paying the bill, but I'm sure I did.
"How incredible was that, Arrow's Impossibility Theorem," I kept thinking to myself an hour later, lighting my fifth cigarette.
