Open Thread, September 15-30, 2012

OpenThreadGuy

If it's worth saying, but not worth its own post, even in Discussion, it goes here.

There's a standard argument about "efficient charity" that says you should concentrate all your donations on one charity

If this argument was universal, it would be rational to invest in a single stock and the saying about all eggs in one basket would not exist.

Sorry, can you explain why it also applies to investing? For reference, here's an expanded version of the argument.

Say you have decided to donate $500 to charity A and $500 to charity B. Then you learn that someone else has decided to reallocate their $500 from charity A to charity B. If you're a consequentialist and have preferences over the total donations to each charity, rather than the warm fuzzies you get from splitting your own donations 50/50, you will reallocate $500 to charity A. Note that the conclusion doesn't depend on your risk aversion, only... (read more)

1benelliott14y

The key difference is risk aversion. People are (quite rightly in my opinion) very risk-averse with their own money, almost nobody would be happy to trade all their possessions for a 51% shot at twice as much, mostly because doubling your possessions doesn't improve your life as much as losing them worsens it. On the other hand, with altruistic causes, helping two people really does do exactly twice as much good as helping one, so there is no reason to be risk averse, and you should put all your resources on the bet with the highest expected pay-off, regardless of the possibility that it might all amount to nothing if you don't get lucky.

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Open Thread, September 15-30, 2012

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Open Thread, September 15-30, 2012

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