All of David_J_Balan's Comments + Replies

The point is that these are two very different kinds of valuable advisers, but the distinction is often missed.

And while I do think in real life there is something of a dichotomy between "people whose final judgment I trust on questions like X," and "people whose final judgment I don't trust but who I still want to hear what they have to say," I think a similar point could be made with more than two categories.

2komponisto
Perhaps you mean to divide the population into the following three categories: (1) people who can convince you without argument, (2) people who can convince you with argument, and (3) people who can't convince you even with argument; and the thesis of the post is "Not everyone in (2) is in (1)".

I think other commenters have had a similar idea, but here's one way to say it.

It seems to me that the proposition you are attacking is not exactly the one you think you are attacking. I think you think you are attacking the proposition "charitable donations should be directed to the highest EV use, regardless of the uncertainty around the EV, as long as the EV estimate is unbiased," when the proposition you are really attacking is "the analysis generating some of these very uncertain, but very high EV effect estimates is flawed, and the tru... (read more)

0AlexMennen
Agreed. Most of the arguments seem to roughly be of the form, "in situation X, one could naively estimate an EEV of Y, but a more accurate EEV would actually be Z. Now I'll refer to Y as the EEV so that I can criticize EEV for not giving the answer Z."
0timtyler
This comment has a neat and correct analysis.

I take your point to be that I have taken something that is really a matter of degree "how much weight should I give to the opinion of this or that person?" and turned it into something dichotomous "is this person a good guide for me or not?" Here is my response.

Let's start by imagining that you can only hear the final opinions of the different advisers, and cannot discuss with them their arguments or evidence relating to the different elements of the question. In that case, the final opinion of anyone who has a valuable insight into an... (read more)

1gwern
You have. To quote from your article: When I boil down your post+comment and look for sense, what I get is something prosaic like 'some people are so expert in a narrow area that their opinion alone is enough for me, but otherwise aren't very good on average; other people are that expert, but in a broader area'.

Nice. I particularly liked the dig at Rooseveltian machismo. Of course it's possible to go too far in the opposite direction too. Some related thoughts here.

http://www.overcomingbias.com/2007/05/doubting_thomas.html

There is a neat paper on this by Feltovich, Harbaugh, and To called "Too Cool for School? Signaling and Countersignaling."

http://www.jstor.org/pss/3087478

1toro
A little more from Harbaugh's home page http://www.bus.indiana.edu/riharbau#CS. Includes the Economist puff piece and an unedited version with some fun-but-unconvincing examples. Fun fact: Harbaugh also made a searchable Chinese dictionary. (zhongwen.com)

A Hassidic Jew was willing to eat pumpkin bread baked in your kitchen?

2Alicorn
Yes. She didn't keep her own kitchen altogether kosher anyway; her roommate wasn't Jewish at all and didn't make any particular effort to pretend to be when selecting meals.

I see ciphergoth already made my first point. Sorry about that.

Landsburg's argument is sound, and I mostly follow it and occasionally try to sell others on it. But I can think of one exception, which is if the political power of an organization that you support depends on the number of members it has. So for example I pay membership dues to one organization that is not my main charity because I want them to be able to claim one more member.

And there is one place that I think Landsburg gets it plain wrong. He says*:

To please diverse stockholders, corporations tend to diversify their giving, often through the United W

... (read more)
0David_J_Balan
I see ciphergoth already made my first point. Sorry about that.

It's a bit off topic, but I've been meaning to ask Eliezer this for a while. I think I get the basic logic behind "FOOM." If a brain as smart as ours could evolve from pretty much nothing, then it seems likely that sooner or later (and I have not the slightest idea whether it will be sooner or later) we should be able to use the smarts we have to design a mind that is smarter. And if we can make a mind smarter than ours, it seems likely that that mind should be able to make one smarter than it, and so on. And this process should be pretty explosi... (read more)

I don't think I understand. The hypothesis says that we evolved to find human babies cute because people who find babies cute are more likely to take care of them and then they'll reproduce and propagate those genes. I guess there's no strong reason why that necessarily means that we have to find human babies cuter than anything else: if the "appreciating cuteness" faculty happened for some random reason to glom extra hard onto bunnies there probably there wouldn't be any very strong selective pressure against it (though as Alicorn points out, there would probably be some slight pressure). Is that what you mean?

3MichaelVassar
Yes. I would also guess that the framing of this problem is also the cause of some of the confusion. As others have noted, newborns are not the optimal target of a cuteness response, that would be something more like four year olds, e.g. maximally expensive children with a large sunk cost. Also, Alicorn may have unusual perceptions of cuteness and no-one may have wanted to contradict a perception. I just actually looked at Google Images and my conclusion is that babies are cuter than bunnies, though not by enough that as a good frequentest I could refute that null hypotheses that bunnies and babies are the same thing. My wife and I have previously observed, while walking in the park, that as the theory predicts boy babies are cuter than girls except when the girls are Chinese, presumably due to the greater parental investment required by boys and the history of unusually frequent female infanticide in China.
4brazil84
Another thing to keep in mind is Eliezer's example of finding a human baby in the woods. Or worse yet, on your doorstep. In other words, the cuteness reaction can arguably work against you by making you vulnerable to cuckoldry.
2MichaelVassar
That organisms which don't have offspring that look like human babies will not experience the same things as cute as humans do.

There is a very nice and closely related paper with the excellent title "Too Cool for School? Signaling and Countersignaling," summarized here:

http://www.zhongwen.com/cs/index.html

Somebody I know once conjectured that this story might not work if there were a continuum of types instead of discrete types. I don't know if anyone has ever worked that out.

In the original post, I said regarding our sole conversation on the subject that I can reall:

"I asked Robin Hanson about this once at lunch a few years ago, and we had an interesting chat about it, along with some other George Mason folks. I won't try to summarize everyone's positions here (I'd feel obligated to ask their permission before I'd even try), but suffice it to say that I don't think he foreswore the Hayekian idea entirely as an argument in favor of prediction markets."

Then I added:

"And there is a quote by him here that seem

... (read more)
0magfrump
The debating tactic he seems to be referencing is that you seem to claim that large amounts of information will be added, while his claim is only that some information will be added ("don't think he forswore the Hayekian idea entirely" seems pretty weak). It also feels strongly like you are attacking the Hayekian idea, but not providing an attack; saying "I don't believe this" but not substantiating. In case people are falling to representation bias from your example, here's a way the prediction market could work out: One extremely ardent organizer or supporter from the town feels that with the amount of popularity she's experienced the candidate has a much better chance (perhaps due to selection bias from seeing the signs and speaking to reporters) than most predictors, she would see the prediction market as a better investment. And if the prediction markets were national in scope but more localized in specialized information (perhaps consider the recent Massachusetts senate race?), a local might have substantial reason to believe that they're local information would be better than national info.

In the absence of decisive empirical evidence, the amount of credence to give to a particular prediction method (whether absolutely or relative to alternative methods) depends in part on what theoretical claims are being made for it, and on how well-supported those claims are. The articles that I linked to don't just say that prediction markets do reasonbly well in aggregating information, or that they do better than the alternatives. Rather, they make explicit reference to Hayek's famous argument which, as I understand it, involves a strong claim of incor... (read more)

1RobinHanson
A standard debating tactic is to attribute overly strong claims to the other side, which seem easy to knock down. You don't have any concrete quotes of such overly strong claims, so you seem to be just assuming someone must have said something overly-strong somewhere. Re the quote from me, that quote doesn't say how much info gets aggregated from any given group.

The comparison in the post wasn't between prediction market prices and stock market prices, it was between prediction market prices and ordinary prices for goods and services. I hadn't thought about it before, but it seems to me that the points made in the post about prediction markets apply to stock markets as well.

Note that this isn't an argument that prediction markets (or normal stock markets) don't work. It's an argument about whether they have this particular "Hayekian" virtue.

The basic point here is a good one, and it's obviously right as it applies to evolution and very likely to AGW as well, though I know very little about that and rely entirely on the fact of the scientific consensus in forming my opinion. But at the same time it is important to keep in mind that just because someone has worked hard and offered you the best evidence that they could be reasonably expected to muster under current circumstances, that doesn't necessarily mean that they have come anywhere near proving the case.

5Eliezer Yudkowsky
Of course. But it is logically rude to demand some knowably unobtainable even-if-they're-right proof instead, and then toss all the other arguments out the window.

The post argues that the Hayekian argument works a lot less well for prediction markets than it does for regular goods and services markets. You raise a good question as to how well it works even there. I don't have too much to say about that: I think its fair to say that the argument is something that most economists are vaguely aware of, but not something we spend a lot of time thinking about. For what it's worth, the idea always struck me as kind of sensible, but not as remotely justifying the radical free market conclusions that some people have wanted to draw from it.

Just for the record, this was not an instance of intentionally burning karma on a post that I knew people weren't going to like. I'm not saying I would never do that, but I have never done it and have no immediate plans to.

Good point on the Americocentrism. I'll keep that in mind.

I appreciate your appreciation of my attempt to make my point better in the above comment. I don't know if it caused Eliezer or any other readers to now agree that it is a point that belongs on LW, but either way I think it improved matters at least somewhat. But I don't think I agree that it would be a good thing if everybody started editing top-level posts, because then the comments made before the revisions would no longer make sense. And I also suspect that a bunch of edits in response to commen... (read more)

Part of the reason for having a Constitution in the first place is supposed to be that there are some things that are so fundamental that they ought not be subjected to ordinary democratic decision-making. If you don't buy that premise, then we don't need a Constitution at all (or at least a Bill of Rights). If you do buy that premise, then the question becomes whether and when that set of things that is above the ordinary law ought to change over time. One defensible position is that it ought never to change unless the change can make it through the very ... (read more)

-1Sticky
However fundamental they are, they're still subject to some kind of decision-making. There's no way around the difficulty: whoever makes the decision has interests, including an interest in expanding his/their own power. If the decision is too fundamental to be made by the people, then we're saying that precisely the most important matters should be decided by people with interests that may not be those of the people whose interests we're actually trying to promote, which is the general public. If they're that much better than us that this makes sense, it's irrational to leave anything at all to democratic decision-making. Besides, when we give the Supreme Court or the Wise Elders the authority to decide fundamental issues, who gets to decide what a fundamental issue is? Are we going to write it down -- and who interprets this written document?

It's not totally clear to me how narrow or broad the ambit of LW posts should be in terms of how far they can stray from core questions of rationality. This post seems no farther from that core than other posts that appear here, but then maybe some of those shouldn't be here either.

In any case, the thing that I think gives this an LW-type flavor is that it's an example of how you can use a certain kind of argument to bully your opponents. One side in the argument takes a legitimate value that no one can dispute (unlimited power by judges is bad) and then, ... (read more)

2bgrah449
There has to be another example of this phenomenon that doesn't come from such a political issue.
4Morendil
One thing I've tried to do when posting is to look at the site's mast and run its mission statement through my mind at the start and at the end of writing: "refining the art of human rationality", and how is my post going to contribute to that precisely? What will my readers do or think after reading that they didn't before? This is known among article writers as the "so what" test. Also, you have a higher bar to clear for non-US readers, and I'm one of those (probably atypical in that I'm actually a little interested in US constitutional law). You may not have thought enough about your audience, as this excerpt suggests: "we could get rid of the silly system we have now". You could call this the Kemo Sabe test, after the cartoon in which the Lone Ranger and Tonto find themselves surrounded by angry Indians, the LR says "We're in trouble, Tonto" - and the latter replies "Who's this 'we' that you speak of, Kemo Sabe?" To summarize, I've downvoted this for failing two major relevance tests. There seems to be a norm against heavy edits to top-level posts. I can see some reasons for such a norm, but they seem outweighed by the benefit of improving the posts. Maybe someone can set me straight on that. Anyway, I'd like to encourage authors to revise top-level posts more, and in that spirit I'll declare here, not just for this post but more generally, my willingness to change downvotes to neutral or even upvotes whenever an author makes the effort, as you did, to discover what readers are not liking, and then makes revisions to their post to address these issues.

Parent voted back up to zero, because people shouldn't actually lose karma for comments like that, because some worded praise is human and good, and because it won't contribute to noise significantly, because insightful and informative type comments will get voted higher and will thus appear before it.

Economists are very fond of the argument of the following form:

"if Thing X that you think is bad in a particular market was really bad, some firm have an incentive to enter and offer a product without thing X and get tons of customers. Therefore, Thing X must not really be bad."

And it is a powerful argument. But not nearly as powerful as it's sometimes made out to be. The economics literature is full of stories in which bad things happen in stable equilibria. And I suspect that there are many more such stories that have not yet been written down.... (read more)

2Larks
I didn't say it's not bad, but that people don't mind it at the point they take out the cards. My argument wasn't against your post in general (I'm something of a fan of nudge-style economics, though I worry about regulatory capture) but that the apparent lack of choice is misleading: if people wanted choice, it would provide itself. Rather, the problem is that people don’t really prefer, at moment of choosing, simple terms over tricky ones, and that this is probably due to hyperbolic discounting. Edit: and because of this, they can't, at time of purchase, want the terms banned. You might seek an ex-post coalition against them, but that's hardly in keeping with impartiality and the rule of law: they already know they're the losers, so their viewpoint will hardly represent the average customer. In short: I’m not saying that bad equilibrium can’t be stable in a free market, but that unpopular ones aren’t.

The models I have in mind are the standard "lemons" adverse selection model and other models in which one side doesn't know something important about the other side's attributes, for example a government purchaser who doesn't know if a particular contractor has high costs or low costs. In the lemons model, the market unravels partially or entirely. In the other models, the agent that knows its attributes can earn some "information rents," which are necessary to get the low-cost agents to reveal the fact that they are low cost. In these ... (read more)

There's a nice paper by Bengt Holmstrom (Review of Economic Studies, 1999) that has a story about inefficienty high (but still voluntary) work effort in the absence of a policy that limits effort, such as a maximum hours restriction. The idea is that no one worker can cut back effort to the efficient level without appearing to be of low ability, and this is true even though employers know that all the workers aren't as good as they appear (their high output is largely due to the fact that they work too hard, not to how good they are).

You're right that I made it sound like it was the restaraunt itself admitting the trickery, which it wasn't. My mistake. And I certainly am not suggesting that the government should regulate the placement of prices on menus. I linked that article simply as a nice illustration of the fact that sellers are always and forever manipulating buyers, rather than simply informing them. Even something as straightforward as a menu is seen not simply as an opportunity to let patrons know what is available and at what price, but to push their buttons.

This is the primary problem with paternalism, and a good reason why it should be limited.

I think clarifying this disagreement is worth a seperate post, which I'll write up in the next few days.

But ignorance in rational agent models of asymmetric information don't cause people to be tricked, so it's can't be ignorance of that sort.

It seems perfectly plausible to me that people understand that the deck is stacked against them, while at the same time not knowing exactly how to protect themselves and so falling for some of the tricks, and would be perfectly happy to have a government they trusted simply remove the bad stuff from the menu. I know that's how I see it.

0RobinHanson
David, that situation is well modeled as ignorance. So either there are models of ignorance supporting your case, or you need to describe a different situation.
6matt
Ooo - sign me up for that! A government I trust that will remove the bad stuff from the menu, and... ohh, hang on. What will the credit card companies, who are a concentrated, highly incentivesed interest group, do next? How will they act on our democratically elected representatives? When we present our carefully thought out policy recommendations to parliament, and the parliament passes the details through to committee... what will happen next? What's likely to come out the other end of the legislative sausage machine? When we then try to organize the millions of self-identified likely victims of complexity, and the hundreds of thousands of wise altruists who want to help the likely victims, for all of whom this is a fairly unimportant matter... when we array them against the lobbiests... who's likely to stay the course and win the regulation that'll help their tribe?

If credit markets worked the way they were supposed to, the terms on which you could get credit would indeed depend on objective measures of your credit-worthiness. Any adverse event would appropriately cause the credit markets to downgrade their opinion of you, and worsen the terms on which you get credit. But I have never heard anyone seriously suggest that the data bear out a conclusion that being a day late with a payment indicates that you are a credit risk so massive that a 29.99% interest rate is appropriate.

As you know, there are limited instances in which I would support the government protecting people against their will. But I suspect that a lot of legal protections against predatory conduct are popular, even among the people whose conduct is restricted. One possible reason for this is that they don't understand that the policy restricts their freedom (but then they also don't understand that the lack of the policy will get them exploited, and I'd rather have them helped for reasons they don't understand than harmed for reasons they don't understand).

But a... (read more)

0RobinHanson
The point of your post was that analysis based on ignorance missed people who just didn't get that they might be tricked. Now you are saying they do realize they might be tricked, which is why they support the policy. So we are back to ignorance.

Either those terms represent an efficient contract or they don't. The most obvious way that they wouldn't would be if they tricked you, and as a practical matter that is where most of the action is. Originally it sounded like you agreed that you were being tricked also, but in a milder sense. If you positively prefer those terms, then in your case they are efficient. But I rather doubt that these are really terms that you would have chosen.

As for the issue of competition, that's not how it works. When Laibson presented the paper I referred to in the main p... (read more)

Robin, as you know from our paternalism debate, I do support a limited paternalistic agenda in what I would describe as "well functioning" societies. But as a practical matter, it is often simply not the case that the kinds of prohibitions that I'm talking about would have to be shoved down the throats of the people they are intended to protect. If you had to guess, would you think that the Fed's recent action referred to in the post would be popular or unpopular with the general public? Or with credit card customers?

3RobinHanson
I don't know if those policies were popular, but if they were popular, that might be because people didn't understand their consequences. Again the key point is how can an accountable government force people to protect themselves who don't want to be protected? My guess is that they would prefer private means of protection, but since those private means are not allowed, they must settle for the public means you offer. You argue that the reason we need public means is that private means will not work because they don't want to be protected. But if they don't want to be protected, why do they support laws protecting them?

You're right that not every case is equally severe. But even in your relatively mild case, it's still a "gotcha." The term is there because the credit card company knows that people will sometimes not understand or will forget. It's got nothing to do with efficiently matching people who want to lend money with people who want to borrow money (which is one of the primary legitimate function of credit markets), it's got to do with figuring out how best to screw people over. Since there is no reason to believe that that contract got to be that way for any efficient purpose, there's no reason for any great reluctance to interfere with it through policy.

1110phil
Ah, but now you're changing the argument! In the post, you argued that it's OK to interfere because people are being tricked (an argument for which I have some sympathy). Now, you're arguing that it's OK to interfere because the only purpose of the cards is to match borrowers with lenders. That, I dont agree with at all. People choose a card for many different reasons. I can imagine people choosing to (perhaps falsely) signal their high wealth by choosing a high-rate card (their friends will assume they pay it off every month). They might choose the "trick" card to give themselves an incentive to pay on time. They may enjoy trying to "outwit" others by paying the card off on time and letting others cover the issuer's expenses. In a competitive market, the money the company makes by "tricks" is competed down: other cards will find it profitable to enter the market and charge less (even if they use the same "tricks"). So a larger cost is borne by those who fall for the "tricks". Still, those people might not be happier with the tricks removed. For instance, suppose I forget to pay on time every five years (which is probably about right). And suppose my forgetting costs $60. Now, the government comes along and decrees that, instead of charging me $60 when I forget, they'll charge me $1 a month regardless. I wouldn't like that. It might be irrational, but that's still my preference. Haven't you, the government, done me wrong by eliminating the "trick" that I understood but chose anyway? Does my being less happy than before rank at zero on your scale of costs and benefits?

The possibility that well-intentioned regulations will be evaded is indeed a problem, and in some cases it limits what is possible. But other regulations are relatively clear and well-enforced, particularly when they have the necessary political support.

I'm not aware of any general standards for distinguishing between abusive contracts and beneficial ones and I'm not sure there could be any. But the question "would anyone who really understood what was going on ever want this contract?" must be a relevant one. You could argue about how much humility should be applied: after all, just because I can't see any reason why a rational person would sign this contract doesn't mean there isn't one. So as is often the case, the optimal policy is not obvious. But make no mistake. The libertarian policy wil... (read more)

1matt
How many of these people have you met? Not just screwed over and over again, but over and over and over again!? What are the chances that you're thinking of a fairly small number of real people who are stupid enough to need institutionalization (from where they don't need these regs) and very few other real people?
2loqi
Indeed, and this only seems like the "first-order" version of the question. For example, a credit card with extreme late payment penalties might be of reasonable appeal to someone sufficiently confident in their ability to pay on time. But it would need to derive its appeal from some other benefit, which presumably exists only because enough people fall into the late payment trap. In this way the credit card company becomes more like a "trickery broker", passing along the spoils to some rational subset of customers while taking a cut. So a variant of your question might be, "if this contract were only entered into by people who really understood the terms, would it still exist?"
1mattnewport
Accepting for the sake of argument that the costs are 'real and big' you seem to be leaping to the conclusion that therefore something must be done. The costs are not generally imposed on me though and not everyone is a utilitarian. I don't see any reason why I should be concerned about costs that others impose on themselves through their own bad decisions.

This story wasn't the main point of the post, but its purpose was to illustrate that it's pretty easy to imagine something in between purely voluntary and coerced at gunpoint. People can be manipulated into "voluntarily" doing things that hurt them, even if they are not tricked or lied to. This merely raises the possibility of beneficial paternalistic intervention; it certainly doesn't establish that the benefits of such intervention outweigh the costs. Here are some old posts on that subject, for whatever interest it may have.

http://www.overcomi... (read more)

There has been a lot of discussion about the merits of humanitarian law, some of it very good. But there has been no discussion of the more LW-ish point of the post, which is that anyone who says that humanitarian law should applied completely independently of the context of the war would seem to be subject to a pretty powerful counter-argument (a moment's thought demonstrates that it can't really be true that what actions in war are or are not OK is completely independent of the context), and yet there's good reason to give this perfectly valid argument very little weight.

There are problems with a norm that says killing foreign leaders is OK, but wedrifid's point also has merit.

2CronoDAS
On the other hand, many conflicts have a self-perpetuating nature independent of the specific leaders involved. Assassinating Alexander the Great may very well have saved Persia from conquest, but assassinating FDR or Stalin would have been of little benefit to the Axis powers. Assassinating Hitler may or may not have helped the Allied powers, and I have no idea what effect assassinating Napoleon would have had. If an assassinated leader's successor simply continues their policies, then assassination does little good. Also, an assassination was the trigger for World War I. :(
3wedrifid
For a start, paranoid leaders kill more of their own civilians than secure ones.

If there were an external force that was decent enough and powerful enough, then it would make sense to have that force actually decide which side is right on the merits, and that would pretty much be the end of war. That would be great. Whether it is possible, or whether it is likely to become possible, are very important questions. But right now no such force exists. Humanitarian law serves the function of limiting the human suffering caused by war, and as such is very valuable.

0Jack
It does this only insofar as it is enforced. If it were enforced more, more people would be deterred. If it was enforced less, fewer people would be deterred.

It seems to me that the problem is self-contained, and doesn't depend on past purchases. Am I missing something?

Nice. Steven Landsburg once wrote something similar (I think in The Armchair Economist) about how it is wasteful to bend down to pick up a $50 bill off the sidewalk, because the money is a pure transfer and the effort of bending down is a pure social loss.

The problem is that I pretty clearly don't value a random person having the $4 as much as me having it, as evidenced by the fact that a lot of my income I keep, and the part of it that I give away (which is pretty substantial but the Peter Singer argument is always working on me that it should be higher) I give away to really poor people abroad, not to random Americans.

It seems to me like you've learned only how much what's actually in your wallet deviated from your best guess about what was in there. If non-wallet wealth effects can be safely ignored, then learning of an $X dollar deviation can be taken as a shock of that size to your total wealth.

They take $1 bills but usually nothing larger than that. Where are you?

0Emily
UK.
1wedrifid
The vending machines in Melbourne seem to accept bills up to $20, sometimes $10, giving change. Older models are limited to coins, usually excluding $0.05 ones.

I think this works if the $1 represents an extra bill that you didn't know was in there, but not if you looked more closely at a specific bill and were happy to realize that it was a $1.

0Alicorn
How about this, then: if I don't have any ones in my purse, this is because I have spent them on things already (since in the past, my purse has contained singles, and that is the typical method by which they depart). Assuming I really want the M&Ms, I might resent the fact that I made other spending choices in the past that caused the lack of ones. Finding the one is news that I did not make (all of) those resented choices.

It's a minor point and probably not worth much more effort, but I'm still confused. If I'm ignorant enough about my total wealth that a finding that a bill turns out to be a $1 instead of a $5 doesn't cause me change my best estimate of my non-wallet wealth, then why isn't it $4 worth of bad news? I don't see the flaw in that reasoning.

0Eliezer Yudkowsky
Oops, the above should be, "total wealth differences in the region of $4", not "total bank account wealth differences". Hm. This is an interesting problem in approximate rationality - if your estimate of "bank account + wallet" and "bank account" is pretty much the same total number, and you learn how much money is in your wallet, what have you learned?
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