Well this would work but if people know each other well enough to trust each other, but why can’t B just give friendly loans or assistance without worrying about official terms and contracts?
You’re establishing small risk pools to manage risk, but you can do that MUCH more efficiently with a large, centralized risk pool.
We’ve discussed this a bit on Facebook but I think I want to leave my thought process in the open.
I think it is very awkward to ask people for loans, and also very emotionally/”morally” fraught to plan for the possibility that you may need to ask other EAs for loans or assistance. Eventually we can probably help to combat this by creating social norms where it becomes more acceptable to do so, but I think it’s a nontrivial cultural shift.
In contrast, suggesting a new and cool plan (with the donation serving as a VERY credible mitigation of potential adverse selection) might sidestep a lot of cultural and other emotional concerns. I was not thinking of very official terms and contracts (which can be expensive in terms of transaction costs), but just something more formalized than completely informal agreements between friends (eg. public pre-agreements, akin to public Bayesian bets or GWWC’s Try Giving).
Getting people to precommit to helping each other seems like it can plausibly lead to more short run donations and lower average savings base than a very vague understanding that your friends can pitch in eventually.
(This all assumes at least a weak belief in some variant of the haste consideration, of course)
I agree that there are strong advantages of a very large centralized risk pool. There are some disadvantages though, which we’ve talked about in the PM and I will cover in more detail after I rewrite this post.
However, the biggest difference is that I think take-up of 2-party donation insurance by early adopters can happen NOW (in a sense just formalizing the “friendly loans or assistance” that some EAs already sort of have anyway). If there’s enough takeup and evidence in favor of increased donations, this can morph into more advanced risk pooling systems if it’s advantageous, and if Knightian uncertainty kicks in and it flops, the downside risk to our community or image is much lower than if a centralized “Effective altruism” organization is running it.
So I think a 2-party donation insurance scheme is both something we can have right NOW, something that I believe with over 90% confidence better than the entirely informal arrangements the community currently has, and something that can fail gracefully if it ends up failing.
Well this would work but if people know each other well enough to trust each other, but why can’t B just give friendly loans or assistance without worrying about official terms and contracts?
You’re establishing small risk pools to manage risk, but you can do that MUCH more efficiently with a large, centralized risk pool.
Hi again kbog,
We’ve discussed this a bit on Facebook but I think I want to leave my thought process in the open.
I think it is very awkward to ask people for loans, and also very emotionally/”morally” fraught to plan for the possibility that you may need to ask other EAs for loans or assistance. Eventually we can probably help to combat this by creating social norms where it becomes more acceptable to do so, but I think it’s a nontrivial cultural shift.
In contrast, suggesting a new and cool plan (with the donation serving as a VERY credible mitigation of potential adverse selection) might sidestep a lot of cultural and other emotional concerns. I was not thinking of very official terms and contracts (which can be expensive in terms of transaction costs), but just something more formalized than completely informal agreements between friends (eg. public pre-agreements, akin to public Bayesian bets or GWWC’s Try Giving).
Getting people to precommit to helping each other seems like it can plausibly lead to more short run donations and lower average savings base than a very vague understanding that your friends can pitch in eventually.
(This all assumes at least a weak belief in some variant of the haste consideration, of course)
I agree that there are strong advantages of a very large centralized risk pool. There are some disadvantages though, which we’ve talked about in the PM and I will cover in more detail after I rewrite this post.
However, the biggest difference is that I think take-up of 2-party donation insurance by early adopters can happen NOW (in a sense just formalizing the “friendly loans or assistance” that some EAs already sort of have anyway). If there’s enough takeup and evidence in favor of increased donations, this can morph into more advanced risk pooling systems if it’s advantageous, and if Knightian uncertainty kicks in and it flops, the downside risk to our community or image is much lower than if a centralized “Effective altruism” organization is running it.
So I think a 2-party donation insurance scheme is both something we can have right NOW, something that I believe with over 90% confidence better than the entirely informal arrangements the community currently has, and something that can fail gracefully if it ends up failing.