In theory, mission hedging can always beat maximizing expected returns in terms of maximizing expected utility.
In practice, I think the main considerations here are a) whether you can find a suitable hedge in practice and b) whether you are sufficiently certain that a cause is important, because you give up the flexibility of being cause neutral and tie yourself financially to a particular cause. You can remain cause neutral by trying to maximize expected financial returns.
To me, the two most promising applications seem to be AI safety, where people are often quite certain that it is one of the most pressing causes (as per maxipok or preventing s-risk), and it seems as if investing in AI companies is plausible to me (but note Kit Harris objections in the comment section here). And then also using mission hedging for ones career might be good by either joining the military, the secret service, or an AI company for the reasons outlined above i.e. historically people in the military have sometimes had outsized impact.
Okay, but can you explain why it would beat maximise expected returns?
Here’s the thought: maximise expected returns gives me more money than mission hedging. That extra money is a pro tanto reason to think the former is better.
However, mission hedging seems to have advantages, such as in shareholder activism: if evil company X makes money, I will have more cash to undermine it, and other shareholders will know this, thus suppressing X’s value. This is a pro tanto reason to favour mission hedging.
How should I think about weighing these pro tanto reasons against one another to establish the best strategy? Apologies if I’ve missed something here, thinking this way is new to me.
Thanks for asking for clarification—I’m sorry I think I’ve been unclear about the mechanism. It’s not really about shareholder activism, this is just an extra.
I’ve now added a few graphs and a spreadsheet as a toy model of why mission hedging beats a strategy that maximizes financial returns in the introduction. Can you take a look and see whether it’s more clear now? Or maybe I’m missing your question.
Great question!
In theory, mission hedging can always beat maximizing expected returns in terms of maximizing expected utility.
In practice, I think the main considerations here are a) whether you can find a suitable hedge in practice and b) whether you are sufficiently certain that a cause is important, because you give up the flexibility of being cause neutral and tie yourself financially to a particular cause. You can remain cause neutral by trying to maximize expected financial returns.
To me, the two most promising applications seem to be AI safety, where people are often quite certain that it is one of the most pressing causes (as per maxipok or preventing s-risk), and it seems as if investing in AI companies is plausible to me (but note Kit Harris objections in the comment section here). And then also using mission hedging for ones career might be good by either joining the military, the secret service, or an AI company for the reasons outlined above i.e. historically people in the military have sometimes had outsized impact.
Okay, but can you explain why it would beat maximise expected returns?
Here’s the thought: maximise expected returns gives me more money than mission hedging. That extra money is a pro tanto reason to think the former is better.
However, mission hedging seems to have advantages, such as in shareholder activism: if evil company X makes money, I will have more cash to undermine it, and other shareholders will know this, thus suppressing X’s value. This is a pro tanto reason to favour mission hedging.
How should I think about weighing these pro tanto reasons against one another to establish the best strategy? Apologies if I’ve missed something here, thinking this way is new to me.
Thanks for asking for clarification—I’m sorry I think I’ve been unclear about the mechanism. It’s not really about shareholder activism, this is just an extra.
I’ve now added a few graphs and a spreadsheet as a toy model of why mission hedging beats a strategy that maximizes financial returns in the introduction. Can you take a look and see whether it’s more clear now? Or maybe I’m missing your question.