The possibility of, say, extinction is a discount on utility, not on money
By that, do you mean that extinction makes future utility less valuable? Or that it means there may be less future utility (because there are no humans to experience utility), for reasons unrelated to how effectively money can create utility?
(Sorry if this is already well-explained by your equations.)
2.
it was basically on the assumption that we should converge on true beliefs over time.
I think my quick take would be that thatās a plausible assumption, and that I definitely expect convergence towards the truth on average across areas, but that there seems a non-trivial chance of indefinitely failing to land on the truth itself in a given area. If that quick take is a reasonable one, then I think this might push slightly more in favour of work to estimate the philanthropic discount rate, as it means weād have less reason to expect humanity to work it out eventually āby defaultā.
4. To check I roughly understood, is the following statement approximately correct? āThe chance of events that leave one with no assets at all canāt be captured in the standard theoretical model, so we have to use a separate term for it, which is the expropriation rate. Whereas the chance of events that result in the loss of some but not all of oneās assets is already captured in the standard theoretical model, so we donāt include it in the expropriation rate.ā
Future utility is not less valuable, but the possibility of extinction means there is a chance that future utility will not actualize, so we should discount the future based on this chance.
Thatās pretty much right. I would add that another reason why complete loss of capital is āspecialā is because it is possible to recover from any non-complete loss via sufficiently high investing returns. But if you have $0, no matter how good a return you get, youāll still have $0.
Thanks for this reply!
1.
By that, do you mean that extinction makes future utility less valuable? Or that it means there may be less future utility (because there are no humans to experience utility), for reasons unrelated to how effectively money can create utility?
(Sorry if this is already well-explained by your equations.)
2.
I think my quick take would be that thatās a plausible assumption, and that I definitely expect convergence towards the truth on average across areas, but that there seems a non-trivial chance of indefinitely failing to land on the truth itself in a given area. If that quick take is a reasonable one, then I think this might push slightly more in favour of work to estimate the philanthropic discount rate, as it means weād have less reason to expect humanity to work it out eventually āby defaultā.
4. To check I roughly understood, is the following statement approximately correct? āThe chance of events that leave one with no assets at all canāt be captured in the standard theoretical model, so we have to use a separate term for it, which is the expropriation rate. Whereas the chance of events that result in the loss of some but not all of oneās assets is already captured in the standard theoretical model, so we donāt include it in the expropriation rate.ā
Future utility is not less valuable, but the possibility of extinction means there is a chance that future utility will not actualize, so we should discount the future based on this chance.
Thatās pretty much right. I would add that another reason why complete loss of capital is āspecialā is because it is possible to recover from any non-complete loss via sufficiently high investing returns. But if you have $0, no matter how good a return you get, youāll still have $0.