Jonas Moss comments on Uncorrelated Bets: an easy to understand and very important decision theory consideration, which helps tease out nonobvious but productive criticism of the EA movement

[Jonas Moss]

I agree the argument doesn’t work, but there are at least two arguments for investing in charities with sub-optimal expected values that critically depend on time.

• Going bust. Suppose you have two charity investments with expected values $E{X}_t=x_t,E{Y}_t=y_t$. Here $x_1>y_1$, but there’s a potential for $y_t>x_t$ in the future, for instance since you receive better information about the charities. If you invest once, investing everything in $X$ is the correct answer since $x_1>y_1$. Now suppose that each time you don’t invest in $Y$, it has a chance of going bust. Then, if you invest more than once, it would be best to invest something in $Y$ if the probability of $Y$ going bust is high enough and $y_{t+1}>x_{t+1}$ with a sufficiently high probability.

• Signaling effects. Not investing in the charity $Y_t$ may signal to charity entrepreneurs that there is nothing to gain by starting in a new charity similar to $Y$, thus limiting your future pool of potential investments. I can imagine this to be especially important if your calculation of the expected value is contentious, or if $E{Y}_t$ has high epistemic uncertainty.

Edit: I think “going bust” example is similar to the spirit of the Kelly criterion, so I suppose you might say the argument does work.