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AlanCrowe comments on Politics as Charity - Less Wrong

29 Post author: CarlShulman 23 September 2010 05:33AM

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Comment author: AlanCrowe 24 September 2010 10:37:31AM 1 point [-]

I agree that there is a conflict between individual rationality and group rationality, but what is the word "just" doing in there? Individuals belong to groups and the group's loses are shared out among the group's members. This imposes a consistency constraint on the relationship between individual rationality and group rationality.

I wonder if there is a connection to the cost allocation problem in management accounting. In the electoral case, if faction A win by a good margin and each member is $1000 better off because of the policies their man enacts, should they allocate $500 dollars profit to each of the two hours they spent voting and think themselves handsomely rewarded for their efforts, or should they look at the good margin and say "Two hours wasted, I could have stayed home and we would still have won." In the business case there is a fixed cost A for a machine and a marginal cost B per unit of production. So the cost model is A+Bv. Obviously the business wants the sales force to go out there and sell and get price P and volume V so that A+BV < PV. One ends up with a conflict between individual sales, for which any price above B is better than no sale, and over all sales, which need a margin to cover the fixed costs, the margin being uncertain as the total sales are uncertain.

I have just ordered Relevance Lost because I suspect there is a lot of history here, with people going round in circles trying to solve this problem. (Since I've ordered a second copy for £1 + £2.75 postage I'm not risking much money on this suspicion :-)

Comment author: Mass_Driver 24 September 2010 04:35:40PM 2 points [-]

One ends up with a conflict between individual sales, for which any price above B is better than no sale, and over all sales, which need a margin to cover the fixed costs, the margin being uncertain as the total sales are uncertain.

Right, but the conflict is for the manager alone to solve; the manager's challenge is to create incentives that will encourage salespeople to further the company's goals. The salespeople face no such challenge; their goal is (or should be) to do their job well with a minimum of time and effort.

Individuals belong to groups and the group's loses are shared out among the group's members. This imposes a consistency constraint on the relationship between individual rationality and group rationality.

With respect: no, it doesn't. Everyone might wish that individual and group rationality would dovetail, but wishing doesn't make it so. The whole of political economics -- the study of governments, cartels, unions, mafias, and interest groups -- is an attempt to cope with the lack of consistency constraints. Governments exist not just because people are irrational, but also because rational people often choose to behave in their narrow self-interest.

It is an interesting question whether defecting on the Prisoner's Dilemma is truly rational when one is writing code for an AI. It is not an interesting question when dealing with flesh-and-blood humans: in a true Prisoner's Dilemma, you defect, period. Thus, it should be our goal as designers of human social institutions to minimize and contain true Prisoner's Dilemmas.

Comment author: Perplexed 26 September 2010 04:35:40AM 2 points [-]

It is an interesting question whether defecting on the Prisoner's Dilemma is truly rational when one is writing code for an AI. It is not an interesting question when dealing with flesh-and-blood humans: in a true Prisoner's Dilemma, you defect, period.

But real flesh-and-blood humans are never in a true PD situation. They are in something more like an iterated PD - it is never a one-shot. If I choose not to vote, my neighbor knows - she works as a clerk at the polling place. If I belong to a union, my shop steward will know whether I have voted, because my union has poll-watchers.

Comment author: Mass_Driver 26 September 2010 07:02:26AM 4 points [-]

Of course; that's right. Sometimes the fear of detection or the hope of establishing long-term cooperation will get you out of what otherwise appears to be a PD. Other times, it won't -- if you see an abandoned laptop at a scenic view pull-over on a recreational road trip, you're pretty much dealing with a one-shot PD. If you return the laptop, it's because you empathize with the owner or believe in karma, and not because you're afraid that the laptop owner won't return your laptop the next time around.

Still, it's important not to believe that individual and collective rationality magically match up -- that belief can lead to all kinds of honest but horribly tragic mistakes, like thinking that peasants will exert significant effort at farming when placed in a Trotsky-style commune.

Comment author: NihilCredo 26 September 2010 11:49:03PM *  1 point [-]

I would upvote you thrice if I could. An overwhelming number of time-tested social dynamics, to say nothing of deliberately designed laws, can be seen to have arisen as anti-PD measures.

Comment author: wedrifid 24 September 2010 05:54:04PM 0 points [-]

It is not an interesting question when dealing with flesh-and-blood humans: in a true Prisoner's Dilemma, you defect, period.

No. At least, not with the period. It depends who you are in the prison with and your respective abilities for prediction. (True PD does not imply participants are human.)

Thus, it should be our goal as designers of human social institutions to minimize and contain true Prisoner's Dilemmas.

I agree on this as well as your general point.