In a sense, I’d say the question still is “What is the most cost-effective way to do good?”. But if you have a lot of money and you only spend on interventions that are individually cost-effective but cheap, then you’re not going to spend most of your money. And that can (depending on further assumptions) reduce your overall cost-effectiveness. It’s more important to make sure to make big investments when you have a lot of money, obviously.
Why not allocate your budget based on expected marginal utility per dollar? This automatically accounts for diminishing returns, since such interventions will have diminishing marginal utility per dollar, and won’t be allocated the next dollar if there’s a better intervention. With this decision rule, you don’t need to worry about how big or small your investments are.
One problem with this approach: if there are transaction costs to identifying, evaluating, and funding interventions, then you would optimally ignore interventions that are below some scale. (And we can think of scalability as lack of diminishing returns.)
In a sense, I’d say the question still is “What is the most cost-effective way to do good?”. But if you have a lot of money and you only spend on interventions that are individually cost-effective but cheap, then you’re not going to spend most of your money. And that can (depending on further assumptions) reduce your overall cost-effectiveness. It’s more important to make sure to make big investments when you have a lot of money, obviously.
Why not allocate your budget based on expected marginal utility per dollar? This automatically accounts for diminishing returns, since such interventions will have diminishing marginal utility per dollar, and won’t be allocated the next dollar if there’s a better intervention. With this decision rule, you don’t need to worry about how big or small your investments are.
One problem with this approach: if there are transaction costs to identifying, evaluating, and funding interventions, then you would optimally ignore interventions that are below some scale. (And we can think of scalability as lack of diminishing returns.)
What do you mean by “individually cost-effective”? Are you trying to make a point about synergies between interventions?