Inefficiencies from inconsistent estimates of value
Broadening from just considering donations, there’s a worry that the community as a whole might be able to coordinate to get better outcomes than we’re currently managing. For instance opinions about the value of earning to give vary quite a bit; here’s a sketch to show how that can go wrong:
Alice and Beth could each go into direct work or into earning-to-give. We represent their options by plotting a point showing how much they would achieve on the relevant dimension for each option. The red and green points show some possibilities for what Alice and Beth might together achieve by each picking one of their options. There are two more points in that choice set, one on each axis, where both people go into direct work or both go into earning to give. It’s unclear in this example what optimal outcome is, but it is clear that the default point is not optimal, since it’s dominated by the one marked “accessible”.
This doesn’t quite fit in the hierarchy of approaches to donor coordination, but it is one of the issues that fully explicit impact markets should be able to help resolve. How much would implicit impact markets help? Maybe if they were totally implicit and “strengths of ask” were always made qualitatively rather than quantitatively it wouldn’t help so much (since everyone would understand “strength” relative to what they think of as normal for the importance of money or direct work, and Alice and Beth have different estimates of that ‘normal’). But if a fraction of projects move to providing quantitative estimates (while still not including any formal explicit market mechanisms), that might be enough to relieve the inefficiencies.
Inefficiencies from inconsistent estimates of value
Broadening from just considering donations, there’s a worry that the community as a whole might be able to coordinate to get better outcomes than we’re currently managing. For instance opinions about the value of earning to give vary quite a bit; here’s a sketch to show how that can go wrong:
This doesn’t quite fit in the hierarchy of approaches to donor coordination, but it is one of the issues that fully explicit impact markets should be able to help resolve. How much would implicit impact markets help? Maybe if they were totally implicit and “strengths of ask” were always made qualitatively rather than quantitatively it wouldn’t help so much (since everyone would understand “strength” relative to what they think of as normal for the importance of money or direct work, and Alice and Beth have different estimates of that ‘normal’). But if a fraction of projects move to providing quantitative estimates (while still not including any formal explicit market mechanisms), that might be enough to relieve the inefficiencies.