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Have you heard of prejudice based on shoe quality and uniqueness, which would be difficult to achieve for someone who has a non-standard foot aspect ratio?

(Maybe I should have said something in my initial comment about how having wide feet affects shoe selection? I mean, something else.)

Request for pity party location remains.

NancyLebovitz14y80

I find it hard to interpret your request for information about a pity party for men who have trouble finding wide shoes as anything other than an attempt to be annoying.

6NancyLebovitz14y

I'm curious about why you're describing any of the material posted about clothing for fat women as a pity party. As for you and shoes, under normal circumstances, you'd have my sympathy. So far as I know, the relative rarity of wide shoes is the result of either a rational estimate that it's harder to make money selling unusual sizes, or a not quite rational lack of effort to notice a business opportunity. On the other hand, it's a common belief that if fat women had access to good clothing, they'd have less incentive to lose weight.

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3 Financial incentives don't get rid of bias? Prize for best answer.

by Roko

15th Jul 2010

1 min read

137

3

I'm trying to better understand the relationship between incentivization and rationality, and it occurred to me that it is a "folk fact" around here that large financial incentives don't make cognitive biases go away.

However, I can't seem to find any papers that actually say this. It's not easy to google for (I have tried) so I wonder if the Less Wrong collective memory knows how to find the papers?

Is there a pattern to which biases go away with incentivization? Do we have at least 5 examples of biases that go away with incentivization and 5 examples that don't go away with incentivization?

As an incentive, I'll paypal $10 to the commenter whose answer is least biased and most useful.

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Financial incentives don't get rid of bias? Prize for best answer.

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[-]Eliezer Yudkowsky14y130

Kachelmeier, S.J., & Shehata, M. (1992). Examining risk preferences under high monetary incentives: Experimental evidence from the People's Republic of China. American Economic Review, 82, 1120-1141.

That's what my notes says was the famous experiment which tested some biases, I forget which, in China using offers of up to several months equivalent salary. Just a fast answer grabbed from my notes, I didn't try to Google or check notes for what the experiment was about.

EDIT: Paper here, seems to be about pricing some simple lotteries. http://decisions.epfl.ch/ExpFinance/readings/KachelmeierShehata.pdf

1Roko14y

Thanks, I'll take a look and report. I think that I'm going to split the prize for best comment between this and Vladimir_M's comment.

[-]Paul Crowley14y110

The GRGRRR problem in Kahneman and Tversky's 1982 paper shows almost identical results whether or not the subjects got a $25 reward for winning.

[-]Vladimir_M14y90

Well, if someone knows about systematic biases that don't go away with incentivization, they're probably too busy making money off that insight to comment here!

In practice, when the stakes are high, it is not so much that people start thinking more accurately -- though this will happen to some extent, and for some people dramatically so -- but rather that they become more cautious.

If you take ordinary folks into the lab and ask them questions they don't care about, it's easy to get them to commit all sorts of logical errors. However, if you approach them... (read more)

3SforSingularity14y

Yeah... this is what Bryan Caplan says in The Myth of the Rational Voter

3MartinB14y

If you read the Book on Checklists (which I HIGHLY recommend to everyone) its filled up with examples of a) people getting consistently saved due to checklists and b) trained professionals not wanting to bother with such a mundane thing. Most of these actually care about their patents still. Also in the book was an example of a baseball team figuring out how the standard scoring methods are slightly off, finding a better one and then buying up undervalued players. The more I look, the more examples of professionals ignoring sound methods to be reliably more successful I find and so I think opportunities for un-biased action are everywhere. But many don't really lead to that much more success.

2Johnicholas14y

What do you mean by "Book on Checklists"? Atul Gawande's "The Checklist Manifesto"?

1MartinB14y

Yes.

0Roko14y

So this actually contradicts the paper that Eliezer cited, or at least seems to, yet it seems to ring true. Not only does the hypothesis that incentive reduces bias seem convincing to you and I, but it also forms a whole Chapter of Caplan's book "The Myth of the Rational Voter". I think I'm going to split the prize between this comment and Eliezer Yudkowsky's one. Feel free to PM me and claim your prize.

6Vladimir_M14y

Roko: There is no contradiction. This paper shows that when stakes increase, people start thinking somewhat more accurately, but not drastically so -- which is exactly what I wrote above. What these researchers did was not the sort of thing that triggers people's caution/normality/status-quo heuristics that I had in mind. They put people in a situation where they stood only to gain free money, and were forced to choose between several options, each with a guaranteed non-negative outcome. A study that would actually test my claims would observe people in a situation where they could lose a significant amount of their own money by accepting a bad deal based on biased reasoning. Of course, this actually happens sometimes, for example with people who ruin themselves by compulsive gambling. But these are rare exceptions, not instances of all-pervasive systematic biases. I don't have a Paypal account, but you can buy me a beer next time I'm over in the U.K. :-)

1Roko14y

I'm prepared to double-or-nothing that $5 on the claim that loss aversion would kick in and they'd go insane and do even worse than in the winnings-only study.

0SforSingularity14y

Yeah... that sounds right. Also, suppose that you have an irrational stock price. One or two contrarians can't make much more than double their stake money out of it, because if they go leveraged, the market might get more irrational before it gets less irrational, and wipe their position.

7CronoDAS14y

"The market can stay irrational longer than you can stay solvent." - John Maynard Keynes

[-]Tenek14y90

Well, I would have done some research and gotten a warm fuzzy feeling out of expanding my knowledge, but if you're going to displace that motivation with only a chance at a measly $10 I guess it's not worth my time.

http://naggum.no/motivation.html

0John_Maxwell14y

But I wouldn't be surprised if Less Wrong readers are eager to signal that they are less biased/better comment writers with money at stake (because that's the "rational way to be"), so Roko's offer might end up resulting in better comments anyway.

[-]NancyLebovitz14y60

Here's an example where large potential incentives have failed to override bias-- I think it's an example of what you're looking for.

Good clothing for fat women has very limited availability.

You might think that the unending publicity about people getting fatter combined with a modest amount of observation that people like dressing well would lead to the conclusion that there are a lot of people who'd pay plenty, but it doesn't seem to register.

Or were you looking for explicit incentives which don't require effort to notice?

A different case of incentives failing to work: People haven't gotten better at avoiding market bubbles.

[-]Alicorn14y140

What I want to know is why no one sells half-bras. There's a market: most women are at least somewhat asymmetrical, plenty by enough to warrant different cup sizes. It wouldn't be revolutionary bra technology: it would just have to fasten in the front and the back both and be packaged individually. And it wouldn't take up much extra store space to stock the same range of sizes. I looked once, and there's a patent on it, but no one seems to actually manufacture the things.

4cupholder14y

There's an even more compelling market: women who have had a single mastectomy. I'd be surprised if there weren't medical half-bras out there already for them.

4Alicorn14y

It wouldn't surprise me. It's cosmetically expected that asymmetries like that be corrected for the visual benefit of others (and for the purpose of making clothes fit) with fills or some other sort of padding. That's also the suggestion I've tended to get when I've expressed a wish for half-bras.

2cupholder14y

You're right, I should've thought of that. I expect it's easier (maybe therefore cheaper?) to manufacture little silicone blobs or whatever than a half-bra, which must partly be why there's a market for the first and not the second.

8Alicorn14y

It wouldn't be hard to manufacture a half-bra. They already have bras that clasp in front and ones that clasp in the back; there is no obvious structural reason why they couldn't make one that does both and then sell the parts separately. In fact, based on the sorts of bras that already exist, it wouldn't be that hard to have a bunch of bins of detached bra parts that could be assembled in any fashion desired. There are bras with detachable straps, too, so there's clearly no structural reason they have to be permanently affixed and therefore no reason they couldn't be swapped out consumer-side for preferred versions. Most women wear bras that do not fit because there are so many things that need to be right and custom-made ones run into the hundreds of dollars. But it seems an obvious market failure that I can't go into a store, pick out a left cup and a right cup and the straps of my choice, and walk out with something that will work better for me than anything I could find in Target without significant extra expense.

[-]mattnewport14y160

Most people have different sized feet and shoes are already separate yet shoes are sold in pairs of matching sizes. I suspect that if you can figure out why that is you will also gain insight into the bra question.

1fubarobfusco12y

I'm pretty sure that at some point in my childhood I needed mismatched shoe sizes, possibly by as much as a full size — and was able to get them.

[-]pjeby14y120

But it seems an obvious market failure that I can't go into a store, pick out a left cup and a right cup and the straps of my choice, and walk out with something that will work better for me than anything I could find in Target without significant extra expense.

OTOH, look at the signaling implications of such a purchase. There's a big difference between knowing you're asymmetrical, and going and buying special clothing because of it. Sure, some people will buy it, but it seems unlikely to achieve mass acceptance.

3cupholder14y

Having thought about it a little longer and updated based on your evidently broader knowledge of bras, my original guess for why the market failure exists does seem pretty unlikely.

[-]mattnewport14y100

To the extent that 'good' equals 'fashionable' for clothing I suspect this is a harder problem than it initially seems. What is fashionable is largely defined by what trend setting / fashionable people are currently wearing and the set of trend setting / fashionable women is almost entirely disjoint from the set of fat women. Therefore styles and cuts that are designed to flatter fat women will never become fashionable and fashionable clothing will not scale up well to body shapes it was not designed for.

If you actually wanted to address this issue you'd have to make fat women into trend setters which is a much harder problem than simply scaling up fashionable clothing. The market need you have identified is largely targeted by the dieting and weight loss industries which are very large and profitable.

2NancyLebovitz14y

In this context, "good" means durable, pleasant-looking, and not unfashionable. From what I've seen of the clothes that fat women are enthusiastic about, they tend to be somewhat simpler and more classic looking than the mainstream. I don't know whether this is making the best of what's available, or whether most thin women would prefer that sort of thing if they could get it. Or maybe my perceptions of the difference are off. I'm actually not that interested in clothes.

7pjeby14y

It may be a bit more complicated than just bias vs. financial incentive. Just because you want to provide plus-size clothing, doesn't mean you have any idea how to design for the market, or that it's actually profitable for a given store to try to reach the plus-size market. (Among the problems: what parts of a person are "plus-sized" can vary considerably!) The manufacturers my wife buys from for her lingerie store's inventory generally have some sort of plus sizes, but it's hard for her to carry enough variety of things that would actually "work" for a wide enough variety of women to offset the carrying cost in floor space and inventory investment. As a plus-sized woman herself, my wife found this annoying, but as a businesswoman, she shrank the selection to reflect the financial reality of the matter. (Another local lingerie store, one that actually chose to focus its entire inventory and marketing on plus-sized women, went belly-up in relatively short order, though of course most new businesses do.)

2NancyLebovitz14y

It's certainly true that it would take a good bit of capital and knowledge to do a significant job of supplying plus size clothing which is as fashionable and well made as the what's now available for thinner women, but it's a little surprising that no one's managed it. I was thinking more about manufacturers than retailers-- retailers can't sell what doesn't exist. Your wife's problem does reflect a hard constraint-- fat women will have all the variation in skeletal proportions and muscle that thin and medium build women do plus a lot of variation in fat distribution. If you check back at the link in my previous post, there's one fat woman who says things have gotten better, in contrast to several others who say it's mostly worse.

5LucasSloan14y

I think that the reason that people don't sell good clothing for fat women is the intersection of existing manufacturers not wanting to sell clothing for fat women, because doing so would lower their status, and fat women don't want to buy good clothing from exclusively for fat women retailers, because doing so would lower their status. I wish I could see a way to take advantage of this market opportunity. Does anyone have any ideas?

[-][anonymous]14y110

Status is part of it, but there's a perfectly good statistical explanation too.

There is much higher variance among fat people than among thin people. It's the long tail of the distribution. So plus sizes are much more approximate. It's more likely that the clothes won't fit. This also makes the return on each additional size lower -- there may be a lot of plus-size women generally, but they're spread out enough that there aren't a lot of size 16s specifically.

I don't think that accounts for everything, but it is part of it.

You're already seeing more good plus-size fashion, I think, of necessity. It's coming.

5Alicorn14y

Maybe it would make sense to sell clothes that are very easy to "let out" at home. I could imagine, for instance, a skirt that you could add extra pleating to with snaps or buttons inside the waistband. You could put it on the rack with all the buttons done, so the customer doesn't need to be seen shopping in a "fat section" and the exact same style would be of a type open to thin women, and it could triple in possible size if you undid them all without needing to be made of an unflattering stretchy fabric. If one needed to undo some but not all of the pleats, the choice of which to undo would be a nifty bit of extra customization. Man, now I want a skirt like that. Or four.

3NancyLebovitz14y

Please post about how the skirt works out. I think the additional fabric will bunch up when the skirt is in its smaller mode, but I could be mistaken.

3Alicorn14y

I have a skirt with a lot of fabric in it that gathers up at an (elastic) waist. I imagine my idea would wind up working much the same way. It looks fine and it's comfortable and twirly! I do think it would be important to make the button-waist skirt out of a thin, ideally woven fabric.

3LucasSloan14y

Maybe. I still think the fact that it was in any way designed for fat people, even if usable by thin people, would cause the status concerns. Also, clothing that you (assuming you don't have crazy seamstressing skills) modify tend not to be "good" clothing which was what the OP was about.

3Alicorn14y

I find myself tempted to sell the idea just because I personally really want a skirt like this. That probably means that I should sell it to my mom, as opposed to Less Wrong, because she might sew me one without needing to think it's an entrepreneurial bonanza. But I think people besides me might buy them!

3LucasSloan14y

I think that people will buy them, just not enough to get them into stores. Online distribution allows for small volume manufacturing.

5Alicorn14y

I just e-mailed my mom. If I can get her to make me one and it's as awesome as I think it is, then there will exist a pattern and a prototype.

2NancyLebovitz14y

I think the level of prejudice is so high that you'd need a good bit of money and a lot of dedication to do it on the large scale. I keep thinking it would take ten million dollars to start a mass production clothing company, but this is only a guess. Does anyone here have a well-founded estimate? As for the smaller scale, here's some of what's going on. If you're not up for starting the big company, you might find a small business which is worth investing in. How sure are you that fat women won't shop at a places that offer good clothing only for fat women? My first thought was that your theory is nonsense, but then I realized I'd been reading fat acceptance material for so long that I don't really know. Maybe it's just that the hypothetical business would need to advertise.

2Alicorn14y

Those websites have some pretty things. (Including items I wouldn't expect to be marketed to any size in particular - really, scarves?) I wonder how large-scale a movement towards the availability of pretty clothes for plus sizes would need to be before large, pretty clothes started reliably being available in thrift stores? (I have been spoiled by $3 garments and wince whenever I look at retail prices -.-)

3Paul Crowley14y

The link is broken, I'm afraid - try this one; http://nancylebov.livejournal.com/423572.html

0NancyLebovitz14y

Thanks. I've corrected it.

0[anonymous]14y

Another possible example: sperm vs. egg donation.

-16SilasBarta14y

[-]Unnamed14y50

Incentives do not operate by magic: they work by focusing attention and by prolonging deliberation. Consequently, they are more likely to prevent errors that arise from insufficient attention and effort than errors that arise from misperception or faulty intuition.

-- Kahneman & Tversky (1986), Rational choice and the framing of decisions, pdf

If you're making a judgment using a process that would become more accurate (less biased) with more attention, effort, or thought, then incentives could help. And if you have some awareness that you're biased (... (read more)

[-]NancyLebovitz14y50

I'm going to bounce a theory off you guys: the reason sports and entertainment have integrated faster than finance is because people care more about sports and entertainment.

I consider entertainment to be a field with a substantial degree of objective measurement because people are good at telling whether they've been entertained.

7knb14y

What is meant by "integrated" in this context?

3nerzhin14y

People choose entertainment for basically the same reasons they choose political opinions or other beliefs: social pressures, being part of a team. Entertainment has objective measurement because people directly change what it is that's being measured. If I decide that Iraq has weapons of mass destruction because I like the team that says so, I'm still wrong. If I decide that Nickelback is entertaining to me because people around me say the same thing, I become correct.

5Will_Newsome14y

I don't have high hopes for CEV, but I hope that humans at least converge on the obviously correct preferences to avoid hot pockets and Nickelback whenever possible. (I think I became slightly infamous at Benton house for insisting that certain preferences could be objectively correct under any reasonable amount of reflection. This was mostly because something deep down in the core of my being knows that liking hot pockets just has to be fundamentally irrational. This is indicative of the depth of most of my philosophical intuitions.)

2CronoDAS14y

But I like the two Nickelback songs that I've heard.

2Will_Newsome14y

:) I've never actually listened to Nickelback, but ignorance will never keep me from trolling.

0[anonymous]14y

That doesn't make hating Nickelback any less fashionable. ....I hate Nickelback. : 3

0John_Maxwell14y

I agree, it is rational to think that some things "just have to be" "fundamentally irrational".

2magfrump14y

Not always. Sometimes you become dreadfully unhappy. But in many cases the point stands.

[-]jimmy14y40

I would expect things like being a cognitive miser or beliefs one professes for signaling to go away under strong enough incentives, but not mindware gaps.

The difference is that in some problems people just have no idea how to get the right answer (eg talking sanely about GAI), and in other problems, they choose not to for some reason (eg it sounds better to say that you're a better than average driver than a worse than average driver)

[-]JamesAndrix14y20

I'll just put this here:

http://www.youtube.com/watch?v=u6XAPnuFjJc

[-]NancyLebovitz14y20

The candle problem may be one of the background ideas which contribute to the belief that large incentives don't change biases, even though it's a loose connection-- it shows that incentives reduce creativity.

I think I've found the source of the meme here Dan Pink on the surprising science of motivation.

I'm not sure it quite proves everything it wants to prove-- big rewards do induce creativity among scammers, even if it's mostly variations on a few themes.

A lot of creativity went into creating the financial crisis-- I'm not sure how much of it was deliber... (read more)

0Roko14y

I know about the motivation science stuff. But that's very much distinct from debiasing.

[-]NancyLebovitz14y10

When you want to get new complex behavior, there's a lot of evidence that it can be shaped with small rewards for changes which more and more closely approximate the new behavior.

This is very different from a great big reward for something which is way out there in possibility space.

This may be a variation on loss aversion-- most people aren't willing to put out a lot of effort unless they're sure of what they'll be rewarded for.

[-]Dagon14y10

Natural financial (and non-financial) incentives, by which I mean those incentives that are part of the model in which you're observing bias, do probably reduce bias, by letting less-biased actors win more. Artificial incentives from outside the model can alter behavior, but not directly change the rationality level.

Many biases are self-serving enough that they'll alter to match the behavior that outside incentives cause. I'm not sure that counts as a reduction in bias, or just a shift to biases that the incent-or prefers.

[-]NancyLebovitz14y10

The most obvious example of incentives overcoming bias (in the colloquial sense, which I think includes the sense you mean) is blacks and sports in the US. It eventually became clear that excluding excellent athletes didn't make financial sense.

[-]prase14y00

As an incentive, I'll paypal $10 to the commenter whose answer is least biased and most useful.

Do you have some objective method to determine biasedness and usefulness of the answers?

[-]xamdam14y00

I think Vassar made this argument (incentives do not fix bias) based on the assumptions that

markets are irrational
markets are irrational because of participant's biases
markets would not be irrational even if few big-money people were not biased

4mattnewport14y

The standard response to claims that markets are irrational is 'so why aren't you rich?'. Maybe Vassar is? I think the Efficient Market Hypothesis is flawed but that still doesn't mean that markets are so irrational that you can easily make money by exploiting their irrationality.

6[anonymous]14y

This is actually what finance professors say. "Strong EMH" is what you mean by the Efficient Market Hypothesis. "Weak EMH" is the claim that you can't systematically exploit market irrationalities to make money. Weak EMH has actually held up pretty well.

8[anonymous]14y

What the weak EMH should say is that "retail investors can't systematically exploit market irrationalities to make money." That definition holds up well, even in the case where the retail investor hands his money to a professional money manager. There are 10s of thousands of professional traders who make their living exploiting market irrationalities. I'm one of them. The weak EMH doesn't apply to us. We are the ones who make sure that it applies to you!

3mattnewport14y

I have a hunch that even the weak version is overstating the case somewhat and that you might even feasibly be able to provide evidence for this by examining the distribution of wealth among investors. This would be difficult due to problems with collecting an appropriate data set, figuring out exactly what distribution the weak EMH should actually predict and what kind of statistical analysis you could use to demonstrate a difference but I suspect one exists. Essentially my hunch boils down to 'there are more Warren Buffetts and Hugh Hendrys than even the weak EMH would predict'. Most tests of the weak EMH merely purport to show that on average investors don't outperform benchmarks which I think is more or less accurate. I suspect there are more consistent winners (and balancing consistent losers) than it would imply however.

3knb14y

There's a strong case for the weak EMH, in that managed funds consistently underperform index funds. Some managed funds outperform in a given year, but the can't reproduce these results year by year, implying that they just got lucky.

3mattnewport14y

This well known result does not contradict my claim. Neither of the examples of possible consistent market beaters I mentioned run managed mutual funds and I would not expect to find many such people running managed mutual funds. I would expect them to mostly be running hedge funds (like Hendry), investing for themselves or using regular companies as investment vehicles (a la Buffet). Even with actively managed mutual funds the evidence you present does not directly contradict the possibility of genuinely skilled management. There is strong evidence that actively managed funds do not outperform the market on average and fairly strong evidence that past performance is a weak predictor of future performance (suggesting luck more than skill is the explanation for outperforming benchmarks in most cases) but the data does not rule out true alpha) in the tails of the distribution. In fact, I just found that Fama and French are explicit about evidence for this existing:

3MartinB14y

and/or that they use bad incentives. public held corporations usually get outperformed by family owned entities due to better long term planability. Even Managers optimize for whatever they get payed by.

2Larks14y

Really? Robin linked to a paper suggesting that firms floated on the stock markets have better management than family-owned firms.

0gwern14y

As I recall, Robin also linked to a paper pointing out that very large companies underperform. Family-owned firms tend to not become that large; I wonder if that undoes the going public effect.

0Larks14y

We may be running into problems with the ambiguity of 'outperform'; clearly dis-economies of scale aren't going to allow family run firms to become larger than public ones, for example.

2Blueberry14y

There are people who make money off of, say, arbitrage against foreign currencies. Someone has to be keeping the rates in line when they go off slightly. The problem is that you need huge amounts of capital to do this effectively, so it's limited to institutional investors.

1Roko14y

I think that maybe there is an analogous pair of statements for contrarian viewpoints. The "Strong anti-contrarian hypothesis" -- the world contains no severe commons problems and is generally being run rationally and well The "Weak anti-contrarian Hypothesis" -- there are no opportunities for an individual or small group to actually benefit from (or even stand a non-negligible chance of succeeding at) solving the severe commons problems and irrationalities that we do have.

6Roko14y

E.g. It takes a mere smart person to realize that spending $10^10 on designing new kinds of lipstick and spending $0 on curing aging is not a sane allocation of effort. But if you try to actually correct that failure, you end up locked away in an underfunded lab on a shoestring budget, poor and ridiculed by the very people you're trying to help, who go on with the old plan whilst deriding your publicly as immoral and selfish.

5whpearson14y

Bitterness doesn't help anything. If publically declaring yourself wanting to save mankind and looking for support doesn't work, pivot and find some other way to achieve your goals. If the problem is that people can't process the complex chain of logic necessary to understand existential risk, work on IA. Start on working on fixing certain types of brain disease that you think might be beneficial for the rest of humanity as well. For example my brain feels tired after certain activities, and I don't like to think. Why? Is it because I have depleted some nutrient in my brain chemistry? Can this be regulated in some fashion. This must be a chronic problem for some people, so you might be able to get funding. Or in other words don't go on this path..

2Roko14y

Be careful not to use "bitterness is bad" as a way to indulge in anti-epistemology, e.g. "If I thought that humanity doesn't care about its own future, then I'd be bitter, and bitterness is bad, ergo humanity does, in fact, care about its own future"

5Richard_Kennaway14y

Negative emotions are to me a warning sign, not to avoid some truth, but to uncover some falsehood.

0Blueberry14y

That was really well stated.

4whpearson14y

Did my response look like that? I was trying to convey the idea that you can use existing factors in society to achieve the goals you want, even if humanity doesn't care about the goals. In the first case it was leveraging disease prevention and then relying on the use of medical technology for self-enhancement that has happened previously (which I elided). The benefits of following that path is determined by how much you think that people not being interested in existential risk reduction is due to their brains shutting down when people talk to them about it and how much you think it is due to conflicts with their other interests. I'd guess a little of both, but probably more interests. That we have lots of smart people here, suggests that there is something in humanity that can become interested in existential risk reduction given sufficient brain power. So I wouldn't expect a vast awakening, but I think it would help the cause. To give another example of how you might achieve your goals even if society doesn't share them. Take aging, if Aubrey de Grey could get some of his proposed techniques to work on just the skin of humans and actually keep skin healthy and young (even while we degrade on the inside), he would get mountains of cash from the many women who want to keep looking young. Admittedly he couldn't muck around with marrow and things (I forget his exact plans), but he should be able to do better than the current "anti-aging creams". Then he needs to find another group of people that want to keep their muscles young (men?). And do it piecemeal. At no point relying on people wanting to live forever. Think sneakier :)

0Roko14y

Sure, I agree with the principle of using whatever resources are available to achieve whatever your goals are. It's just important to keep background facts "clean", i.e. not skewed by what your current near-term goal is.

1Blueberry14y

Yes, but "humanity cares about its own future" is such a vague statement that you can accurately believe it either way, depending on how you interpret it. So I don't see anything wrong with interpreting it so as to be less bitter.

2Roko14y

^ Anti-epistemology ^

2MichaelVassar14y

Right, and my position is the strong pro-contrarian hypothesis. There are visibly countless opportunities for extremely but boundedly irrational individuals to benefit from solving commons problems, therefore almost no-one is extremely irrational but boundedly so for an extremely permissive bound, almost everyone is even more irrational than that. One of my best data-points is that so few people did the obvious and invested in Buffett once he had the best track-record of any other investor 35 years ago. With some leverage, any such people who started out with reasonable investments could be billionaires today, and if many existed he would have been swamped with funds and unable to continue to overperform. Why would rational people who give their money to a money manager give it to one who didn't have the best or almost the best track record. Yes there are reasons, but not plausibly for the number of people who didn't buy Berkshire.

2NancyLebovitz14y

Do you have any theories about why so many people didn't invest in Buffett? Any chance that if Buffett had been swamped with money, he would have rethought his strategy and come up with something useful for the changed circumstances?

1Roko14y

If you think of any of other amazingly good investment opportunities like that, let me know ;-0 In fact, what opportunities are there for a high-rationality person to both solve a commons problem and benefit from it? Smart speculation and venture cap is one place I can think of, but you have to already be a millionaire. For myself, to even get to that level, I'm going to have to go slug it out in finance for a decade.

1MichaelVassar14y

The standard response to that is "the market can stay irrational for longer than you can stay solvent." also, in my case What historical rate of return on investment = rich?

0mattnewport14y

It's a nice line but I think if being more 'rational' than the market causes you to lose all your money then you're doing 'rational' wrong. Rationality is supposed to be about winning, not about being 'right' but broke. Consistently displaying positive alpha over 5+ years would be indicative of some genuine investment skill. Some top hedge fund managers seem to be able to do this but it is a pretty rare level of talent.

0xamdam14y

12+% with lowish volatility for 5 years would be impressive, especially if it's compounded.

2Roko14y

Markets can be irrational even if a large portion of investors are rational. It's complex. For one thing, many investors have to find hedged positions (e.g. pension fund managers), and often there aren't good hedges for mispriced securities. Risk aversion and time discounting make things worse, especially if the irrational investors are more risk-tolerant than the rational ones.

2xamdam14y

That's why I mentioned all the assumptions ;)

0MichaelVassar14y

In practice, just no.

0xamdam14y

Just no to If yes, please provide support.

[-]MichaelVassar14y00

One of Tyler Cowen's recent books, probably "Discover your Inner Economist" discusses this in depth.

Some other experiments, possibly from K & T, show the same irrationalities among very poor third world residents when dealing with amounts of money that are very substantial to them.

0xamdam14y

I think Ariely covered some of these experiments in Upside of Irrationality, though the point he was trying to make is that too much incentive is counterproductive (decreases rational behavior).

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