You walk into a bar blindfolded.
You buy a Martini cocktail.
The bartender tells you it was very good and a handsome brunette drank it.
No one else confirms
You pay satisfied and leave.
You go to your banker.
You tell him to buy some stocks.
He tells you he bought them and sends you a slip of paper saying he did.
No one else confirms.
You leave satisfied.
You go to your advertising space provider.
You participate in an auction.
Your supplier tells you that it was held, that you won it, and that the advertisement was displayed and seen N times.
No one else confirms.
You pay satisfied and leave.
If the first example sounds absurd to you, it actually is.
If the second point reminds you of Madhoff’s Ponzi scheme, indeed it does. That is why we have regulations in finance to minimize the risk that it might reoccur.
If the third point sounds to you like the online advertising auction market, it does.
We give the bartender hundreds of billions a year, without a guarantee regulation.
For example, we could envision that the auctioneer be an entity other than the supplier of the good being sold and the auctions to be certified.
Or even that any display of advertising is tracked.
Because, from the ongoing antitrust lawsuit against Google in the U.S., we now know that Google does NOT award the auction to the highest bidder.
How can we be sure that, to a large extent, it’s not a simulation similar to Madhoff’s ?
What trust mechanisms exist ?
