= 27d567bc2d48d9f40e9ccc20ea370b15)
Stuart_Armstrong comments on Gains from trade: Slug versus Galaxy - how much would I give up to control you? - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (67)
If I understand the proposal correctly, I think this bargaining solution can heavily favor someone with diminishing marginal utility vs someone with linear utility. For example suppose Alice and Bob each own 1 (infinitely divisible) unit of resource, and that's the default point. Alice values all resources linearly, with utility function A(a,b)=a, where a is resources consumed by Alice, b is resources consumed by Bob. Bob's utility function is B(a,b) = b if b<=1, else 1+(b-1)/9 if b<=1.9, else 1.1. Normalization causes Bob's utility function to be multiplied by 10, and the bargaining solution ends up giving Bob 1.9 units of resources. Correct?
Seems correct. But high marginal utility in strategic places can work too. What if Alice had linear utility, up until 1.05, where she suddenly has utility 2? Then the split is Alice 1.05, Bob 0.95.
Diminishing marginal returns isn't so much the issue, rather it's the low utopia point (as a consequence of diminishing marginal returns).