My claim is that your intuitions are the opposite of what they would be if applied to the for-profit economy. You’re response (if I understand correctly) is questioning the veracity of the analogy—which seems not to really get at the heart of the efficient market heuristic. I.e. you haven’t claimed that bigger donors are more likely to be efficient, you’ve just claimed efficiency in charitable markets are generally unlikely?
Besides this, shorting isn’t the only way markets regulate (or deflate) prices. “Selling” is the more common pathway. In this context, “selling” would be medium donors changing their donation to a more neglected/effective charity. It could be argued, this is more likely to happen under a dynamic donation “marketplace”, with lot’s of medium donors, than in a less dynamic, fewer but bigger donors, donation “marketplace”
Ah, gotcha. If I understand correctly you’re arguing for more of a “wisdom of the crowds” analogy? Many donors is better than a few donors.
If so, I agree with that, but think the major disanalogy is that the big donors are professionals, with more time experience and context, while small donors are not—big donors are more like hedge funds, small donors are more like retail investors in the efficient market analogy
My claim is that your intuitions are the opposite of what they would be if applied to the for-profit economy. You’re response (if I understand correctly) is questioning the veracity of the analogy—which seems not to really get at the heart of the efficient market heuristic. I.e. you haven’t claimed that bigger donors are more likely to be efficient, you’ve just claimed efficiency in charitable markets are generally unlikely?
Besides this, shorting isn’t the only way markets regulate (or deflate) prices. “Selling” is the more common pathway. In this context, “selling” would be medium donors changing their donation to a more neglected/effective charity. It could be argued, this is more likely to happen under a dynamic donation “marketplace”, with lot’s of medium donors, than in a less dynamic, fewer but bigger donors, donation “marketplace”
Ah, gotcha. If I understand correctly you’re arguing for more of a “wisdom of the crowds” analogy? Many donors is better than a few donors.
If so, I agree with that, but think the major disanalogy is that the big donors are professionals, with more time experience and context, while small donors are not—big donors are more like hedge funds, small donors are more like retail investors in the efficient market analogy