What does “optimizing” mean in this context? If I understand Michael’s model correctly, from a monetary perspective, if you’re trying to make as much expected money as possible, you should on average work at a top startup. (This is outside the scope of his model, but) if your utility function is fairly risk sensitive, you should on average work at bigtech. From a career capital perspective, it again depends on a lot of details (as I’m sure you know! :)).
If so, then do I understand correctly that the value of working for a startup is:
1.1. Diversifying the EA portfolio, and
1.2. The value of money is not logarithmic for EA as a whole
?
If so, 1.1. seems like a small consideration to me, given the importance of this life decision for the individual, and 1.2. seems like it’s maybe false, given EA currently has a ton of money
I think the diversification aspect was a relatively small fraction of the gains here (though Michael can feel free to disagree with me). I’m not sure what you mean by “The value of money is not logarithmic for EA as a whole” because there might be too many double negatives, but I think Michael is in fact assuming a logarithmic utility function of money for EA. (if it was linear, reducing correlation by diversifying the porfolio wouldn’t be useful). However, the value of money to EA of your donations is close to linear, for the simple reason that EA already has a lot of money and we assume utility functions are approximately differentiable (i.e. locally linear).
(It’s possible this is what you’re saying and we’re just aggressively agreeing!)
What does “optimizing” mean in this context? If I understand Michael’s model correctly, from a monetary perspective, if you’re trying to make as much expected money as possible, you should on average work at a top startup. (This is outside the scope of his model, but) if your utility function is fairly risk sensitive, you should on average work at bigtech. From a career capital perspective, it again depends on a lot of details (as I’m sure you know! :)).
I think the diversification aspect was a relatively small fraction of the gains here (though Michael can feel free to disagree with me). I’m not sure what you mean by “The value of money is not logarithmic for EA as a whole” because there might be too many double negatives, but I think Michael is in fact assuming a logarithmic utility function of money for EA. (if it was linear, reducing correlation by diversifying the porfolio wouldn’t be useful). However, the value of money to EA of your donations is close to linear, for the simple reason that EA already has a lot of money and we assume utility functions are approximately differentiable (i.e. locally linear).
(It’s possible this is what you’re saying and we’re just aggressively agreeing!)