I had to use Wikipedia to get a concise definition of EMH, rather than rely on my memory:
The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to “beat the market” consistently on a risk-adjusted basis since market prices should only react to new information. [1]
This appears to me to apply exclusively to financial (securities) markets and I think we would be taking (too) far out of its original context in trying to use it to answer questions about whether great EA projects exist. In that sense, I completely agree with you that:
it’s a poor way to model the situation that will lead you to make systematically wrong judgments
In the real (non-financial) world, there are plenty of opportunities to make money, which is one reason entrepreneurs exist and are valuable. Are you aware of people using EMH to suggest we should not expect to find good philanthropic opportunities?
What I’m talking about tends to be more of an informal thing which I’m using “EMH” as a handle for. I’m talking about a mindset where, when you think of something that could be an impactful project, your next thought is “but why hasn’t EA done this already?” I think this is pretty common and it’s reasonably well-adapted to the larger world, but not very well-adapted to EA.
still seems like a fair question. I think the underlying problem you’re pointing to might be that people will then give up on their projects or ideas without having come up with a good answer. An “EMH-style” mindset seems to point to an analytical shortcut: if it hasn’t already been done, it probably isn’t worth doing. Which, I agree is wrong.
I still think EMH has no relevance in this context and that should be the main argument against applying it to EA projects.
I had to use Wikipedia to get a concise definition of EMH, rather than rely on my memory:
This appears to me to apply exclusively to financial (securities) markets and I think we would be taking (too) far out of its original context in trying to use it to answer questions about whether great EA projects exist. In that sense, I completely agree with you that:
In the real (non-financial) world, there are plenty of opportunities to make money, which is one reason entrepreneurs exist and are valuable. Are you aware of people using EMH to suggest we should not expect to find good philanthropic opportunities?
https://en.wikipedia.org/wiki/Efficient-market_hypothesis
What I’m talking about tends to be more of an informal thing which I’m using “EMH” as a handle for. I’m talking about a mindset where, when you think of something that could be an impactful project, your next thought is “but why hasn’t EA done this already?” I think this is pretty common and it’s reasonably well-adapted to the larger world, but not very well-adapted to EA.
still seems like a fair question. I think the underlying problem you’re pointing to might be that people will then give up on their projects or ideas without having come up with a good answer. An “EMH-style” mindset seems to point to an analytical shortcut: if it hasn’t already been done, it probably isn’t worth doing. Which, I agree is wrong.
I still think EMH has no relevance in this context and that should be the main argument against applying it to EA projects.