Benquo comments on On Charities and Linear Utility - Less Wrong

13 Post author: Anatoly_Vorobey 04 February 2011 02:13PM

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Comment author: Psychohistorian 04 February 2011 09:09:32PM *  4 points [-]

Your entire point seems to be that it's better to give to multiple charities when the joint utility of giving to those charities exceeds the benefit of giving all the money to one charity.

This circumstance exists in the real world for most individuals so infrequently as to be properly ignored. It is extremely unlikely that there is some combination of charities such that giving $5,000 to each of them will generate substantially better returns than giving $10,000 to the best available charity. Unless I'm ignoring important evidence, charities just don't work together that comprehensively, and non-huge sums of money do not have dramatic enough effects that it would be efficient to split them up.

Also, you chose an incredibly dense and inefficient way to make what seems like a very simple point.

Comment author: Benquo 05 February 2011 02:07:19AM 0 points [-]

I agree; I'd be quite surprised if it were at all common for separate charities working in the same field to be so well-balanced in scale that proportional contributions to both outweigh contributions to just one. Since there's no clear feedback mechanism to help people maximize expected utility in giving, there's no reason to expect the MUs to be anywhere close. Therefore we should strongly expect that a "bullet" strategy will outperform diversification. I dub this the Inefficient Charity Markets Hypothesis.

On the other hand, I wonder what percentage of charity contributions are given by the top 1% of donors, people who really can make a dent in these problems? Their impact probably dwarfs anything the vast majority of small donors in the audience would do. But I'd bet they're smart enough to realize this stuff doesn't apply to them.

Comment author: TobyBartels 05 February 2011 05:47:24AM 1 point [-]

But I'd bet they're smart enough to realize this stuff doesn't apply to them.

Or they've never heard Landsburg's argument anyway!