When designing a system, you give it certain goals to satisfy. A good example of this done well is voting theory. People come up with apparently desirable properties, such the Smith criterion, and then demonstrate mathematically that certain voting methods succeed or fail the criterion. Some desirable goals cannot be achieved simultaneously (an example of this is Arrow’s impossiblility theorem).
Lotteries give every ticket has an equal chance. And if each person has one ticket, this implies each person has an equal chance. But this goal is in conflict with more important goals. I would guess that lotteries are almost never the best mechanism. Where they improve situations is for already bad mechanisms. But in that case, I’d look further for even better systems.
I think the problem that it is really, really hard to come up with better systems. As mentioned above research grants have quite a few problems. Those problems are founded in human bias and a lack of knowledge. I cannot really evaluate the value of a grant if I have not seen all the other grants and I might be influenced by my biases so give it to a scientist I like or trust. In addition, if there would be an easy and obvious system people would probably already have implemented it.
So, lotteries solve this problem. There might be better approaches, but many of them probably need an allknowing and unbiased arbiter and I have the impression that we lack those.
Basically it boils down to the question: Am I better in evaluting this than chance? And I think people often are not due to their unconcious bias and knowledge gaps.
There are mechanisms that aggregate distributed knowledge, such as free-market pricing.
I cannot really evaluate the value of a grant if I have not seen all the other grants.
Not with 100 percent accuracy, but that’s not the right question. We want to know whether it can be done better than chance. Someone can lack knowledge and be biased and still reliably do better than random (try playing chess against a computer that plays uniformly random moves).
In addition, if there would be an easy and obvious system people would probably already have implemented it.
Wouldn’t the “efficient-policy hypothesis” imply that lotteries are worse than the existing systems? I don’t think you really believe this. Are our systems better than most hypothetical systems? Usually, but this doesn’t mean there’s no low-hanging fruit. There’s plenty of good policy ideas that are well-known and haven’t been implemented, such as 100 percent land-value taxes.
When designing a system, you give it certain goals to satisfy. A good example of this done well is voting theory. People come up with apparently desirable properties, such the Smith criterion, and then demonstrate mathematically that certain voting methods succeed or fail the criterion. Some desirable goals cannot be achieved simultaneously (an example of this is Arrow’s impossiblility theorem).
Lotteries give every ticket has an equal chance. And if each person has one ticket, this implies each person has an equal chance. But this goal is in conflict with more important goals. I would guess that lotteries are almost never the best mechanism. Where they improve situations is for already bad mechanisms. But in that case, I’d look further for even better systems.
I think the problem that it is really, really hard to come up with better systems. As mentioned above research grants have quite a few problems. Those problems are founded in human bias and a lack of knowledge. I cannot really evaluate the value of a grant if I have not seen all the other grants and I might be influenced by my biases so give it to a scientist I like or trust. In addition, if there would be an easy and obvious system people would probably already have implemented it.
So, lotteries solve this problem. There might be better approaches, but many of them probably need an allknowing and unbiased arbiter and I have the impression that we lack those.
Basically it boils down to the question: Am I better in evaluting this than chance? And I think people often are not due to their unconcious bias and knowledge gaps.
There are mechanisms that aggregate distributed knowledge, such as free-market pricing.
Not with 100 percent accuracy, but that’s not the right question. We want to know whether it can be done better than chance. Someone can lack knowledge and be biased and still reliably do better than random (try playing chess against a computer that plays uniformly random moves).
Wouldn’t the “efficient-policy hypothesis” imply that lotteries are worse than the existing systems? I don’t think you really believe this. Are our systems better than most hypothetical systems? Usually, but this doesn’t mean there’s no low-hanging fruit. There’s plenty of good policy ideas that are well-known and haven’t been implemented, such as 100 percent land-value taxes.
Let’s take a subset of the research funding problem: How can we decide what to fund for research about prisoner rehabilitation? I’ve suggested a mechanism that would do this.