If all you care about is expected impact, it could make sense to bring all your money to a roulette wheel, and put everything on red. Even though you expect to lose a small amount of money in expectation, you can expect to have more impact.
I don’t think this actually describes the curve of EA impact per $ overall (such a convex intervention would have to have a lot of special properties, and ex ante we get diminishing returns from uncertainty about the cost of convex interventions), but this is one reason for the donor lottery. The idea there is that research costs lead to convexities for small donors (because they are small, they are roughly price-takers, so diminishing returns over interventions don’t outweigh that effect).
I don’t think this actually describes the curve of EA impact per $ overall (such a convex intervention would have to have a lot of special properties, and ex ante we get diminishing returns from uncertainty about the cost of convex interventions), but this is one reason for the donor lottery. The idea there is that research costs lead to convexities for small donors (because they are small, they are roughly price-takers, so diminishing returns over interventions don’t outweigh that effect).
Thanks, that’s a very good example.
For sure.