Daniel_Burfoot comments on Against picking up pennies - Less Wrong

-1 [deleted] 13 December 2009 06:07AM

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Tags: opportunity_costs standard_biases scope_insensitivity principles risk

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Comment author: Daniel_Burfoot 15 December 2009 02:17:00PM 0 points [-]

I suggest that for people with a habit of picking up currency that they come across the plans, as implemented by their brains would be better described as {Y, Y + suppress pick-up-valued-item impulse in the case of pennies}.

I buy this point, but it seems like we're talking about different issues.

Penny grabbing is probably not a good example of the problem I am really concerned with. This is the situation where there is some action X that we have to decide whether or not to do, and we have relatively little information to bring to bear. A good example came up in the financial crisis: "should we bail out the banks?" Well, some people think we should, others disagree. There are all these hard-to-evaluate pros and cons in the outcome-prediction process, but at the end of the day the pros seem to add up to a bit more than the cons.

The problem is that some people see the question as symmetric: either we bail out the banks or we don't. No reason to prefer a priori one course of action over the other. But my whole point is that we should prefer the simpler action a priori, and require much more concrete evidence in favor of the complex plan before we choose it.

Comment author: wedrifid 15 December 2009 02:38:50PM 0 points [-]

There are all these hard-to-evaluate pros and cons in the outcome-prediction process, but at the end of the day the pros seem to add up to a bit more than the cons.

An interesting topic and I disagree.

The problem is that some people see the question as symmetric: either we bail out the banks or we don't. No reason to prefer a priori one course of action over the other. But my whole point is that we should prefer the simpler action a priori, and require much more concrete evidence in favor of the complex plan before we choose it.

I read your example and thought {X, X + bail out banks}. But since you are a bailout advocate I suppose you wouldn't have brought up the example if you thought the complexity weighed in against your position. So I infer that you mean {bail out banks, do a more complex thing Y}. For many instances of Y that people are likely to propose I expect I would agree with your judgement, with the complexity being a significant factor.

Comment author: Daniel_Burfoot 15 December 2009 03:53:26PM 0 points [-]

But since you are a bailout advocate I suppose you wouldn't have brought up the example if you thought the complexity weighed in against your position. So I infer that you mean {bail out banks, do a more complex thing Y}.

No, I'm against the bailout! My point is that the bailout is complex, therefore it should be penalized even if it seems to have a good predicted outcome. I see the choice as {X=no intervention, Y=bail out banks}; the former is far simpler, so it should be preferred.

Comment author: wedrifid 15 December 2009 03:57:55PM 0 points [-]

No, I'm against the bailout! My point is that the bailout is complex, therefore it should be penalized even if it seems to have a good predicted outcome. I see the choice as {X=no intervention, Y=bail out banks}; the former is far simpler, so it should be preferred.

Ahh, ok. I read the "the pros seem to add up to a bit more than the cons" part and assumed the reverse.

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