[This is an excerpt from a longer post I’m writing]
Suppose someone’s utility function is
U = f(C) + D
Where U is what they’re optimizing, C is their personal consumption, f is their selfish welfare as a function of consumption (log is a classic choice for f), and D is their amount of donations.
Suppose that they have diminishing utility wrt (“with respect to”) consumption (that is, df(C)/dC is strictly monotonically decreasing). Their marginal utility wrt donations is a constant, and their marginal utility wrt consumption is a decreasing function. There has to be some level of consumption where they are indifferent between donating a marginal dollar and consuming it. Below this level of consumption, they’ll prefer consuming dollars to donating them, and so they will always consume them. And above it, they’ll prefer donating dollars to consuming them, and so will always donate them. And this is why the GWWC pledge asks you to input the C such that dF(C)/d(C) is 1, and you pledge to donate everything above it and nothing below it.
This is clearly not what happens. Why? I can think of a few reasons.
The above is what you get if the selfish and altruistic parts of you “negotiate” once, before you find out how high your salary is going to be. If instead, you negotiate every year to spend some fair share of your resources on altruistic and selfish resources, you get something like what we see.
People aren’t scope sensitive about donations, and so donations also have diminishing marginal returns (because small ones are disproportionately good at making people think you’re good).
When you’re already donating a lot, other EAs will be less likely to hold consumption against you (perhaps because they want to incentivize rich and altruistic people to hang out in EA without feeling judged for only donating 90% of their $10M annual expenditure or whatever).
When you’re high income, expensive time-money tradeoffs like business class flights start looking better. And it’s often pretty hard to tell which purchases are time-money tradeoffs vs selfish consumption, and if your time is valuable enough, it’s not worth very much time to try to distinguish between these two categories.
Early-career people want to donate in order to set themselves up for a habit of donating later (and in order to signal altruism to their peers, which might be rational on both a community and individual level).
As you get more successful, your peers will be wealthier, and this will push you towards higher consumption. (You can think of this as just an expense that happens as a result of being more successful.)
I think that it seems potentially pretty suboptimal to have different levels of consumption at different times in your life. Like, suppose you’re going to have a $60k salary one year and a $100k salary the next. It would be better from both an altruistic and selfish perspective to concentrate your donations in the year you’ll be wealthier; it seems kind of unfortunate if people are unable to make these internal trades.
EDIT: Maybe a clearer way of saying my main point here: Suppose you’re a person who likes being altruistic and likes consuming things. Suppose you don’t know how much money you’re going to make next year. You’ll be better off in expectation from both a selfish and altruistic perspective if you decide in advance how much you’re going to consume, and donate however much you have above that. Doing anything else than this is Pareto worse.
The GWWC pledge is akin to a flat tax, as opposed to a progressive tax—which gives you a higher tax rate when you earn more.
I agree that there are some arguments in favour of “progressive donations”.
One consideration is that extremely high “donation rates”—e.g. donating 100% of your income above a certain amount—may affect incentives to earn more adversely, depending on your motivations. But in a progressive donation rate system with a more moderate maximum donation rate that would probably not be as much of a problem.
Below this level of consumption, they’ll prefer consuming dollars to donating them, and so they will always consume them. And above it, they’ll prefer donating dollars to consuming them, and so will always donate them. And this is why the GWWC pledge asks you to input the C such that dF(C)/d(C) is 1, and you pledge to donate everything above it and nothing below it.
Wait the standard GWWC pledge is a 10% of your income, presumably based on cultural norms like tithing which in themselves might reflect an implicit understanding that (if we assume log utility) a constant fraction of consumption is equallycostly to any individual, so made for coordination rather than single-player reasons.
Yeah but this pledge is kind of weird for an altruist to actually follow, instead of donating more above the 10%. (Unless you think that almost everyone believes that most of the reason for them to do the GWWC pledge is to enforce the norm, and this causes them to donate 10%, which is more than they’d otherwise donate.)
[This is an excerpt from a longer post I’m writing]
Suppose someone’s utility function is
U = f(C) + D
Where U is what they’re optimizing, C is their personal consumption, f is their selfish welfare as a function of consumption (log is a classic choice for f), and D is their amount of donations.
Suppose that they have diminishing utility wrt (“with respect to”) consumption (that is, df(C)/dC is strictly monotonically decreasing). Their marginal utility wrt donations is a constant, and their marginal utility wrt consumption is a decreasing function. There has to be some level of consumption where they are indifferent between donating a marginal dollar and consuming it. Below this level of consumption, they’ll prefer consuming dollars to donating them, and so they will always consume them. And above it, they’ll prefer donating dollars to consuming them, and so will always donate them. And this is why the GWWC pledge asks you to input the C such that dF(C)/d(C) is 1, and you pledge to donate everything above it and nothing below it.
This is clearly not what happens. Why? I can think of a few reasons.
The above is what you get if the selfish and altruistic parts of you “negotiate” once, before you find out how high your salary is going to be. If instead, you negotiate every year to spend some fair share of your resources on altruistic and selfish resources, you get something like what we see.
People aren’t scope sensitive about donations, and so donations also have diminishing marginal returns (because small ones are disproportionately good at making people think you’re good).
When you’re already donating a lot, other EAs will be less likely to hold consumption against you (perhaps because they want to incentivize rich and altruistic people to hang out in EA without feeling judged for only donating 90% of their $10M annual expenditure or whatever).
When you’re high income, expensive time-money tradeoffs like business class flights start looking better. And it’s often pretty hard to tell which purchases are time-money tradeoffs vs selfish consumption, and if your time is valuable enough, it’s not worth very much time to try to distinguish between these two categories.
Early-career people want to donate in order to set themselves up for a habit of donating later (and in order to signal altruism to their peers, which might be rational on both a community and individual level).
As you get more successful, your peers will be wealthier, and this will push you towards higher consumption. (You can think of this as just an expense that happens as a result of being more successful.)
I think that it seems potentially pretty suboptimal to have different levels of consumption at different times in your life. Like, suppose you’re going to have a $60k salary one year and a $100k salary the next. It would be better from both an altruistic and selfish perspective to concentrate your donations in the year you’ll be wealthier; it seems kind of unfortunate if people are unable to make these internal trades.
EDIT: Maybe a clearer way of saying my main point here: Suppose you’re a person who likes being altruistic and likes consuming things. Suppose you don’t know how much money you’re going to make next year. You’ll be better off in expectation from both a selfish and altruistic perspective if you decide in advance how much you’re going to consume, and donate however much you have above that. Doing anything else than this is Pareto worse.
The GWWC pledge is akin to a flat tax, as opposed to a progressive tax—which gives you a higher tax rate when you earn more.
I agree that there are some arguments in favour of “progressive donations”.
One consideration is that extremely high “donation rates”—e.g. donating 100% of your income above a certain amount—may affect incentives to earn more adversely, depending on your motivations. But in a progressive donation rate system with a more moderate maximum donation rate that would probably not be as much of a problem.
Wait the standard GWWC pledge is a 10% of your income, presumably based on cultural norms like tithing which in themselves might reflect an implicit understanding that (if we assume log utility) a constant fraction of consumption is equally costly to any individual, so made for coordination rather than single-player reasons.
Yeah but this pledge is kind of weird for an altruist to actually follow, instead of donating more above the 10%. (Unless you think that almost everyone believes that most of the reason for them to do the GWWC pledge is to enforce the norm, and this causes them to donate 10%, which is more than they’d otherwise donate.)
I thought you were making an empirical claim with the quoted sentence, not a normative claim.
Ah, fair.