Thanks for the post. I agree EAs should have lower decreasing marginal utility for money, since they can never be satisfied by it—as you can always help someone else. On the other hand, I’m not sure you invoke the best examples. First, LTCM collapsed in 1998 (despite being managed by genius economists) and had a bad effect on financial markets; this shows that trying to earn a lot of money entails risks and externalities. Second, I’m not sure what’s your source for this premise:
Ordinary wealthy people don’t care as much about getting more money because they already have a lot of it
A possible source is Kahneman & Deaton, but if that’s the case, this paper: a) has been criticized by more recent studies, and b) is not focused on very wealthy people, which are a very special class of individuals. Actually, I’d say that people who become really wealthy (by themselves) already tend to have lower diminishing marginal utility for money—or they would work so hard to do so.
Thanks for the post. I agree EAs should have lower decreasing marginal utility for money, since they can never be satisfied by it—as you can always help someone else.
On the other hand, I’m not sure you invoke the best examples. First, LTCM collapsed in 1998 (despite being managed by genius economists) and had a bad effect on financial markets; this shows that trying to earn a lot of money entails risks and externalities.
Second, I’m not sure what’s your source for this premise:
A possible source is Kahneman & Deaton, but if that’s the case, this paper: a) has been criticized by more recent studies, and b) is not focused on very wealthy people, which are a very special class of individuals. Actually, I’d say that people who become really wealthy (by themselves) already tend to have lower diminishing marginal utility for money—or they would work so hard to do so.