wedrifid comments on Politics as Charity - Less Wrong

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

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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: 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.