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

Roko

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.

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.

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.

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.

2NancyLebovitz16y

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?