LINEAR & NONLINEARCORE
Concavity & Diminishing Returns
Curved payoffs change optimal bets: diversify when concave, concentrate when convex.
How it works
- Concave bends down: each extra unit pays less than the last.
- Convex bends up: extremes beat averages.
- Shape dictates strategy: hedge concave bets, concentrate convex ones.
Use → Portfolios, effort allocation, pricing tiers.
Watch out → Assuming linearity near a bend recommends the exact wrong dose.
Try it → Sketch payoff vs effort for your project — where does it bend?
REDCAPE jobs → Design · Act
Free sources → SFI Nonlinear Dynamics tutorial • Coursera M4 (Growth & concavity)
Attach to a lattice — combines with
Different families, shared jobs. Disagreement between them is where insight lives.
GAMES
Collective Action & Commons (Ostrom)
Shared pools survive with boundaries, monitors and graduated sanctions — no panacea.
SHARED JOBS: DESIGN · ACT
DECISIONSDecision Trees + Value of Information
Fold back probabilities; pay for information only if it changes the action.
SHARED JOBS: ACT · DESIGN
DIFFUSIONBass Diffusion (S-Curve)
Innovators plus imitators make the S-curve. Spend early on seeds, later on social proof.
SHARED JOB: DESIGN