Wei_Dai comments on Why We Can't Take Expected Value Estimates Literally (Even When They're Unbiased) - Less Wrong
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Comments (249)
I was having trouble understanding the first example of EEV, until I read this part of Will Crouch's original comment:
I agree this is wrong. They failed to consider that charities that are above average will tend to make information available showing that they are above average, so absence of information in this case is Bayesian evidence that a charity is below average. Relevant LW post: http://lesswrong.com/lw/ih/absence_of_evidence_is_evidence_of_absence/
What you say is true, but even after taking into account the point about absence of evidence being evidence of absence one still needs to Bayesian adjust on account of measurement errors giving rise to some charities' activities being overvalued and others being undervalued according to the measurements.