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Two investment strategies, S1 & S2. They have the same average expected ROI, but S1 involves investing all my money in a single highly speculative company with a wider expected variance... my investment might go up or down by an order of magnitude. So, S1 suffers from a single point of failure relative to S2.
You're saying that I could just as readily express this by saying "S1 involves diminishing marginal utility of wealth relative to S2"... yes?
Huh. I conclude that I haven't been understanding this conversation from the git-go. In my defense, I did describe myself as finance-phobic to begin with.
No - what's under question is the scaling behavior of your own utility function wrt money; if you exhibit diminishing marginal utility of wealth, that means you want to avoid S1.
Reposted from a few days ago, noting that jsalvatier (kudos to him for putting up the prize money, very community spirited) has promised $100 to the winner, and I have decided to set a deadline of Wednesday 1st December for submissions, as my friend has called me and asked me where the article I promised him is. This guy wants his god-damn rationality already, people!
My friend is currently in a potentially lucrative management consultancy career, but is considering getting a job in eco-tourism because he "wants to make the world a better place" and we got into a debate about Efficient Charity, Roles vs. Goals, and Optimizing versus Acquiring Warm Fuzzies.
I thought that there would be a good article here that I could send him to, but there isn't. So I've decided to ask people to write such an article. What I am looking for is an article that is less than 1800 words long, and explains the following ideas:
but without using any unexplained LW Jargon. (Utilons, Warm Fuzzies, optimizing). Linking to posts explaining jargon is NOT OK. Just don't use any LW Jargon at all. I will judge the winner based upon these criteria and the score that the article gets on LW. Maybe the winning article will not rigidly meet all criteria: there is some flexibility. The point of the article is to persuade people who are, at least to some extent charitable and who are smart (university educated at a top university or equivalent) to seriously consider investing more time in rationality when they want to do charitable things.