I think this is a really compelling addition to EA portfolio theory. Two half-formed thoughts:
Does portfolio theory apply better at the individual level than the community level? I think something like treating your own contributions (giving + career) as a portfolio makes a lot of sense, if youâre explicitly trying to hedge personal epistemic risk. I think this is a slightly different angle on one of Jeffâs points: is this âk-level 2â aggregate portfolio a âbetterâ aggregation of everyoneâs information than the âk-level 1âł of whatever portfolio emerges from everyone individually optimising their own portfolios? You could probably look at this analytically⌠might put that on the to-do list.
At some point what matters is specific projects...? Like when I think about âunderfundedâ, Iâm normally thinking thereâs good projects with high expected ROI that arenât being done, relative to some other cause area where the marginal project has a lower ROI. Maybe my point is something likeâunderfunding and accounting for it should be done at a different stage of the donation process, rather than in looking at overall what the % breakdown of the portfolio is. Maybe weâre more private equity than index fund.
Does portfolio theory apply better at the individual level than the community level?
I think the individual level applies if you have risk aversion on a personal level. For example, I care about having personally made a difference, which biases me towards certain individually less risky ideas.
is this âk-level 2â aggregate portfolio a âbetterâ aggregation of everyoneâs information than the âk-level 1âł of whatever portfolio emerges from everyone individually optimising their own portfolios?
I think itâs a tough situation because k=2 includes these unsavory implications Jeff and I discuss. But as I wrote, I think k=2 is just what happens when people think about everyoneâs donations game-theoretically. If everyone else is thinking in k=2 mode but youâre thinking in k=1 mode, youâre going to get funged such that your value systemâs expression in the portfolio could end up being much less than what is âfairâ. Itâs a bit like how the Nash equilibrium in the Prisonerâs Dilemma is âdefect-defectâ.
At some point what matters is specific projects...?
I agree with this. My post frames the discussion in terms of cause areas for simplicity and since the lessons generalize to more people, but I think your point is correct.
I think this is a really compelling addition to EA portfolio theory. Two half-formed thoughts:
Does portfolio theory apply better at the individual level than the community level? I think something like treating your own contributions (giving + career) as a portfolio makes a lot of sense, if youâre explicitly trying to hedge personal epistemic risk. I think this is a slightly different angle on one of Jeffâs points: is this âk-level 2â aggregate portfolio a âbetterâ aggregation of everyoneâs information than the âk-level 1âł of whatever portfolio emerges from everyone individually optimising their own portfolios? You could probably look at this analytically⌠might put that on the to-do list.
At some point what matters is specific projects...? Like when I think about âunderfundedâ, Iâm normally thinking thereâs good projects with high expected ROI that arenât being done, relative to some other cause area where the marginal project has a lower ROI. Maybe my point is something likeâunderfunding and accounting for it should be done at a different stage of the donation process, rather than in looking at overall what the % breakdown of the portfolio is. Maybe weâre more private equity than index fund.
I think the individual level applies if you have risk aversion on a personal level. For example, I care about having personally made a difference, which biases me towards certain individually less risky ideas.
I think itâs a tough situation because k=2 includes these unsavory implications Jeff and I discuss. But as I wrote, I think k=2 is just what happens when people think about everyoneâs donations game-theoretically. If everyone else is thinking in k=2 mode but youâre thinking in k=1 mode, youâre going to get funged such that your value systemâs expression in the portfolio could end up being much less than what is âfairâ. Itâs a bit like how the Nash equilibrium in the Prisonerâs Dilemma is âdefect-defectâ.
I agree with this. My post frames the discussion in terms of cause areas for simplicity and since the lessons generalize to more people, but I think your point is correct.