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.
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.